A brand new renault peugeot

How car depreciation works

Once a new car hits the road, it instantly begins to lose value. This depreciation continues until the car reaches the end of its life, but the actual change in value will vary depending on the car’s make and model.

If you understand car depreciation and know the ins and outs, you can save yourself some money when purchasing a vehicle and ensure it holds its value as much as possible.

What is car depreciation?

Car depreciation is simply the difference between the value of the vehicle when you bought it, and its value when you sell it. Every vehicle is subject to this, but the rate at which the value depreciates varies between models. In general, a brand-new vehicle will lose around 20% – 30% of its value in just one year. This is because the newer your car is, the faster its value reduces.

To save money in the long run, experts say that choosing a car which holds its value will deliver bigger savings than fuel efficiency in many cases.

New car depreciation

Brand new cars will depreciate at a drastic rate in the first year and by the fifth year, they have generally lost 60% of their value.

Used car depreciation

By purchasing a car that is just one year old, you could save on average 20% – 30%. After the first year, used cars generally depreciate by 15% on average, so if you’re willing to buy an older car again, you could save even more.

Why do cars lose value?

Cars lose their value for many reasons. These include:

  • Mileage
  • Number of owners
  • Service history
  • Warranty
  • Fuel economy
  • Reliability
  • Overall condition of the car
  • Size
  • Accident history
  • Supply and demand

Can I minimise car depreciation?

There are some steps you can take to reduce the rate your car depreciates, however, every car will depreciate no matter how well you take care of it. Some ways to minimise car depreciation are:

  • Buying a used car rather than a new one, to avoid drastic depreciation
  • Keeping mileage low
  • Taking care of your car with regular services
  • Repairing any damage as soon as possible
  • Choosing popular colours
  • Keeping a full-service history
  • Avoiding modifications to bodywork

Of course, selling your car at peak value is only one way to make money from it once you no longer need it or you’re looking to upgrade. Here at Scrap Car Comparison, we can scrap your car for cash and you can find instant offers with our car scrap value calculator.

The value of your car is dependent on a number of factors such as the make, model and weight of your vehicle. For example, some collectors will be willing to pay a higher price for certain vehicles that is more than the scrap metal value per tonne. Some cars will also have parts that can be recycled – it’s not all about crushing!

As the only scrap price comparison site in the UK, we are committed to finding you the best possible price for your vehicle in just a few minutes. We compare scrap merchants, salvage yards and other buyers in your area – get your quote today.


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