Loss of car value: how to minimise losses

The joy of buying a car often gets in the way of realizing the fact that the cost of your purchase begins to decline steadily immediately after you leave the car dealership. If you bought a non-rarity and not a one-off car, then investing in a new car can hardly be called a good investment. Loss of car value is inevitable. Moreover, each car owner must imagine how much lower the price will be after a certain amount of time – for example, three years. To answer this question, it is necessary to consider the secondary passenger car market – sales statistics and analysis.

Loss of car value over the years

Studies show that after three years of operation, a car becomes cheaper by 28-49% on average. These numbers are abstract values. The real percentage of loss of value of a car depends to the greatest extent on its class:

  • The prices for golf cars, mid-range cars, and compact cars, including crossovers, are getting cheaper by 28-35% during the first three years of use. These machines are among the slowest depreciating models.
  • 37-42% – loss of value of mid-size SUVs worth up to $55,000 dollars after they have been intensively exploited for three years.
  • Luxury SUVs and sedans, the cost of which starts from $55,000 dollars, are getting cheaper by almost half, by 43-49%.

There are two main time points of loss of vehicle value: the day the vehicle was purchased and the first 12 months of operation. In the second year, the price of cars remains almost unchanged, decreasing by about 5-10%. The first half of the third year is characterized by almost the same loss. The end of the warranty period is the sales liquidity period.

What is the loss in market value of the vehicle immediately after purchase? When leaving the car dealership, mass models immediately fall in price by about 10%. The reason is that you can hardly find a buyer willing to buy a car from his hands at the dealer’s price.

car value

As soon as a new vehicle has been tested by another driver, it becomes a used one. A sharp loss in the value of the car occurs due to the disappearance of the factory freshness. Therefore, trying to sell new is a bad idea. Buyer’s demand for such a product is in question, while the seller, in turn, will incur significant losses.

What determines the price in the secondary car market? It is influenced by a huge number of factors, including even the color of the car body. For example, the intense yellow tone in the budget car segment evokes a strong association with taxis among buyers.

Loss of car value by brand

Of course, the most profitable thing is to buy and then sell cars of popular models. Due to their relevance, the loss of car value is slower. If you lose only 10-20% of your investment in three years, it will be a success due to the right choice or a favorable coincidence, which happens much less often.

Sell Your Car Profitably

If you have a car that you believe has depreciated so much that you can’t find any buyers, you can sell it at Trade Cars For Cash. Call us today for a quote and be on track for your new car.