Like any other possession, the time will come when a car outgrows its practicality. And like it or not, it will have to be replaced. While offloading the car is the right decision to make, many are often unsure of the right time to do so.
Unlike wine that tastes better with age, especially anywhere between 15 to 50 years, a car is typically scrapped when it is about 10 to 15 years old. And the rate at which it loses value is close to worthless by the time it reaches 10. This roughly means that by the third year, a car typically loses around 50% of its value. And this decrease is called depreciation.
Depreciation is the single greatest cost involved in owning a new car. It is also undoubtedly one of the reasons you should offload your car. A car depreciates immediately the moment you drive it off the forecourt. Some cars depreciate faster than others. But what impacts depreciation?
A car’s fuel efficiency and performance will decrease over time. And this greatly impacts depreciation. The constant rise in fuel prices can be blamed for the extra amount you have been paying for the fuel. However, do note that if the difference is significant, something is not right.
Mileage can have a major impact on depreciation as well. When buying a used car, low mileage can be seductive. Thus, by selling your car while it has plenty of service years left, chances of selling it quickly at the price you want will be greater.
A car passed its warranty will greatly decrease its value. If your car reaches or exceeds its warranty period, your manufacturer will no longer be obliged to fix it. While it is still in its warranty period, sell it off.
As the car gets older, mechanical problems will begin to develop. And the continuous repair bills can dramatically impact your budget. When this happens, offload your car.
It is advised not to wait too long to sell off your car, especially if it no longer serves its purpose. Note that even cars that are well maintained and kept in good condition decrease in value over time. Ideally, for the optimum price, it is best to offload your car when it has reached its third year or when the odometer hits 50,000.
However, buying a used car can save you a significant amount of money in depreciation costs. This is because the previous owner has covered a significant portion of its total depreciation. For a used car that is between 3 and 5 years of age, there is a big possibility that nearly more than half of its total possible depreciation have been paid off.
62% of the cars at MUV are between the age of 4 and 9. Drop by to have a chat with us if you are looking to buy or sell used cars. And to appraise your car, call us to make an appointment. To check out the available cars, feel free to try our MUV Buyer App. To sell us your car, the MUV Seller App would be of great help.