The moment you drive a new car off the dealer’s forecourt, it's a used car – and it's lost a significant proportion of its value. Unlike houses, which accrue in value, cars depreciate – most rapidly in the first three years of their lives. Car product manufacturer GardX says a car can lose 30 per cent of its value in its first year, and 60 per cent over three years.
From that point of view, a used car is a much better financial investment than a new car. But whether your car is new, nearly new or a good few years old when you step behind the wheel, here are our tips to ensure it’s a financially sound investment.
Let's start all this by saying that, if you're making a personal purchase, we generally advise buying the car you want, in the colour you want, with the features that you want – and driving it as much as you need to. Cars are there to be enjoyed, and the amount of money that you may or may not get when you sell it in the future is hardly a reason not to get the most out of the car in the present. So while some dealers may advise you to install a particular feature or go for a particular colour because it's likely to sell better, we believe you should get what you like.
However, if you're buying with future resale in the back of your mind, research how much the different models you're considering are likely to be worth when you're ready to sell them. Car depreciation will be affected not only by the make and model, but the mileage: cars which have done lots of miles can be worth thousands of pounds less than the same model with below-average miles on the clock. Running costs will also affect vehicle depreciation because, obviously, people like cars that are economical to run.
Maintain your car properly, repair any damage as soon as possible and service it when it should be serviced to maximise resale value too. Make sure you can show its full service history, with receipts, invoices and details of work done. Get any problems fixed before you put the car on sale.
A car that’s been discontinued by the time you come to sell it may not sell as well; likewise, if the manufacturer is about to release an updated version of your car, you're likely to get more money if you can sell it while it's still the latest version.
Cars that are known for quality, and luxury brands, will often show lower-than-average depreciation values. There is an obvious benefit to buying a car which will still be under warranty when you sell it – Toyota, Mitsubishi, Hyundai and Subaru all offer five-year warranties, Kia leads the way with seven.
At Carwise Group, we have a huge range of used cars of a variety of makes and models for sale. If you'd like to test drive one of them, call us at whichever of our dealerships is most convenient for you – you'll find us in Harlow and Maidstone.