Minimizing Car Depreciation

There a any number of car book publications and automobile websites that review and research all the different types of makes and models.

Most of this information will give you an idea of the resale track record of any vehicle you might be considering purchasing.

This is all good information to help you minimize your automobile’s depreciation expense you will have to shoulder.

And although depreciation is inevitable on any vehicle, there are certain tactics you can take to help minimize the effects of this expensive creature.

• Try to pick out a car that has a low depreciation high resale value track record.
• Be cognizant as to when the automaker is about to make a body style change. If it is on the radar you may want to wait for the newer body style.
• Select a larger engine if offered
• Select appropriate features for the area. For example cars in warmer climates are expected to have air conditioning when resold.
• Also a quick check of the any of the trade books will give you an idea of what features or add on’s will enhance the resale value.
• Avoid fads when deciding on the color of your car. What may attract you at first glance might wear you out over a short period of time.
• Don’t rule out finding a high quality used car or ‘pre-owned’ car. The biggest depreciation hit on a car occurs within the first two years of ownership.
• You can save yourself thousands of dollars by waiting and doing your car shopping for a car that’s a few years old.
• After you have purchased your car, resolve yourself to keep your car for a longer period of time.
• After about five years your car will have weathered the lion’s share of the depreciation and you can begin to realize a bit of upside value.
• When it come time to purchase a new car, consider selling your car yourself. As with any retail business, there is a wholesale side and a retail cost side.
• The dealer will want to give you the wholesale cash value (ACV is actual cash value. An important concept that I will discuss later with you) so they can in turn sell your trade at a retail value. If you sell the car yourself you then become the retailer instead of the wholesaler.
• Needless to say keeping the maintenance up and even having a maintenance record will help bring in a bit more resale value of your car when the time comes.
• Remember whether you are trading your car in with a dealer or selling you car yourself, the key is you are selling your product and the better condition your car is in at sales or trade-in time the high dollar you can command.

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