How to retain 75% of your cars value when it’s time to resell

Written by 
Bill Tsouvalas
Bill Tsouvalas is the managing director and a key company spokesperson at Savvy. As a personal finance expert, he often shares his insights on a range of topics, being featured on leading news outlets including News Corp publications such as the Daily Telegraph and Herald Sun, Fairfax Media publications such as the Australian Financial Review, the Seven Network and more. Bill has over 15 years of experience working in the finance industry and founded Savvy in 2010 with a vision to provide affordable and accessible finance options to all Australians. He has built Savvy from a small asset finance brokerage into a financial comparison website which now attracts close to 2 million Aussies per year and was included in the BRW’s Fast 100 in 2015 as one of the fastest-growing companies in the country. He’s passionate about helping Australians make financially savvy decisions and reviews content across the brand to ensure its accuracy. You can follow Bill on LinkedIn.
Our authors
, updated on November 25th, 2021       

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Any car owner knows that car depreciation is the grim reaper to your vehicle. If you are planning on selling your car after two to five years, it can have a huge effect on its resale value. Although it is hard to turn back the hands of time, there are a few things that you can do to maintain up to 75% of its value.

Wrapping your head around car depreciation

It is sadly true that the moment you drive off your newly purchased baby almost 20% of its value gets knocked off. Within a year your car will depreciate by 19% in the first year. You can already do the math that if you are planning to resell your baby within the same year, you are going to lose a couple of thousands of what you initially paid for.

However, if you are planning to hold onto it for long the process of depreciation slows down considerably. Aussies love holding onto their vehicles with the average age being 10.1 years. Once your vehicle has reached its sage years its value will be determined by its condition and desirability of the model.

Invest in a brand that lasts

The rule of thumb that you must keep in mind is that you get what you pay for. If you buy a car that is relatively cheap on the market with cheap parts, it is inevitable that it will depreciate quicker than your strong brands that come with quality parts. You can judge the quality of a vehicle by looking at its safety rating on the Australian New Car Assessment Programme site and its resale value on the car market.

Go with a brand that has parts that are easy to find

If your recently purchased car is something of a stepping block towards eventually owning your dream car, and you plan on selling it in the next three years then one way to make it sell like hot cakes is to get a brand that is popular. Although exclusive brands give a sense of driving something unique and strong, it will be hard to find affordable parts in abundance. Researching recent car sales will help reveal the top brands that you can invest in.

Smileage: Driving that will keep you and your mileage happy

One of the biggest things that will play a role in your car is the mileage. Age and mileage will determine the worth of your car. The more numbers it has on the odometer the less it is worth. One way to keep off the mileage monster from decreasing the value of your car is to make less use of it. This sound crazy when the sole purpose of a car is to drive you from point A to B. However, choosing to take public transport to work and not using your car to run small errands to the shop around the corner will decrease the rate of depreciation.

Nothing beats research

When buying a car that you are not planning to hold onto, you need to think of the long-term process. You will have to keep an eye out on the car market to see what is currently being bought and sold. It will also be useful to research the depreciation value of the car you are interested in buying. Finally, get your finances ready by applying for a car loan to help you seal the deal when the car you are interested in eventually comes around.

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