Measuring depreciation on a pre-owned vehicle
While buying a brand-new car can seem like an investment, you begin losing value the second you drive off of the dealership lot. Within the first year of ownership, a new vehicle will lose an average of 20% of its value. For many drivers, the best way to escape the initial depreciation hit is to instead choose to purchase a pre-owned vehicle.
While the rate of depreciation slows after the first year, it doesn’t completely stop. With new car depreciation, you can depend on the fact that your new vehicle will lose about 20% of its value after the first year, but depreciation for used cars can vary based on different factors. One of the biggest variables that contribute to used vehicle depreciation is the demand for the style of vehicle. For example, there’s demand for crossovers and SUVs now, so drivers who are buying a pre-owned crossover will be paying higher prices and may have a harder time finding the vehicle that they want. However, their used crossover will hold value until the next big thing comes along. For contrast, a sedan is more likely to be available at a lower price point because it doesn’t have to same desire attached.
[Related: Choosing a pre-owned family vehicle]
To protect your pre-owned vehicle from depreciation, you should try to make sure that you’re buying a vehicle that is essentially timeless. There’s something to be said for fun colors and funky designs, but it can hurt your vehicle’s value in the long run if you choose something too outlandish. It is also beneficial to search for a used vehicle that comes equipped with a variety of technology and safety features, which make your vehicle more valuable even as the technology ages. To find a variety of popular used models that have all of the features that you need, visit one of the five OkCarz locations and view the online inventory.