03 Mar, 2024
What are the Factors that Affect the Car Depreciation Rate?
The value of the car starts the moment you own it. One must accept a sad reality, before buying a car. This has been, perhaps, one of the main reasons for people turning to used cars. Even then, the price of a second-hand car will depend on several factors. Therefore, two cars of the same car model, of the same manufacturing year, might be priced differently.
Many elements are taken into consideration while evaluating a car. The factors that affect the car depreciation rate are discussed in this article.
Important Factors that Affect the Car Depreciation Rate
1. Car’s Age and Kilometres Run
The price of the car would be significantly down if it is 10 or more years old. Having said that a well-maintained and highly demanded car can fetch a decent price. Even if it is this much old. The kilometers run is also checked by the car buyer before fixing the price. It is a fact that the efficiency of the vehicle will go down over a period due to wear and tear and aging of the components.
2. Condition of the Vehicle
Every buyer will inspect the vehicle, with the help of a mechanic. Rattling sounds, performance issues, etc. will lead to value depreciation. The best way to reduce the price reduction is to pursue meticulous servicing and maintenance procedures. Timely replacement of defective or underperforming components, periodic replenishments, and preventive maintenance practices can ensure the best condition for the vehicle.
3. Discontinued Models
Discontinued models may get a depreciated price only. The concerns about after-sales support and the availability of spares discourage people from opting for discontinued models. Car manufacturers like Maruti and Tata support even their stopped models, with spare support. Even in this scenario, the buyer may quote a reduced price only.
4. Car Manufacturer’s Withdrawal from the Business
The car’s price will tumble heavily if the car manufacturer withdraws from the business. Their absence will lead to a lack of spares, no after-sales support, and other issues. No one wants to get into trouble by buying a car from a discontinued car manufacturer.
5. Advanced Models at Affordable Prices
The automobile sector is witnessing a massive transformation. Global brands are available in India. The tight competition among the car manufacturers is reflected in the price of the cars as well as the features offered. Now, a feature-rich car with advanced technology integrated can be purchased at phenomenally low prices. This has a direct effect on the used car market as well. The price of second-hand cars is impacted due to this scenario.
6. End of Lifespan
One major factor that Affects the Car Depreciation Rate is the end of the lifespan. Every vehicle has an approved lifespan. After which, it has to be discarded or demolished as per the guidelines issued by the authority. You cannot expect a good price if the car has reached somewhat end of its lifespan.
Methods to Keep the Vehicle’s Value High
You cannot stop car value depreciation. The only thing that can be ensured is to keep the vehicle technically healthy to get a decent price in the second-hand car market. The car price offered by different car buyers and used car dealers also differs depending on the methodologies they use. Some of the means to get the right price for your car are:
1. Proper Maintenance – Proper periodic maintenance and servicing will help maintain the car technically healthy. Instead of just undertaking corrective maintenance or repairs as and when a defect occurs, get the car serviced at least once in six months.
2. Genuine Spares – Avoid installing duplicate spare parts or components just for saving some money. It would eventually damage the system and impact its performance.
3. Servicing Centre – Choose a trusted servicing center for periodic servicing and repairs of your car. You cannot rely on all the servicing centers in your area. As you cannot inspect every component for confirming the status of servicing, it is vital to pick a trustworthy servicing center.
4. Car Dealer – There are many second-hand car dealerships that purchase used cars. Select only a dealer who offers the right price for the car. There are no firm yardsticks for finalizing the price of a pre-owned car. Hence, the price will differ from dealer to dealer.
For more info regarding the factors that affect the car depreciation rate and other related aspects, call us now.
Read similar: How To Get The Best Resale Value For Your Car