Understanding Car Depreciation in Australia
Introduction
It might be hard to believe but the car’s value depreciates by a whopping 10-15% just when it steps out of the showroom. Thereafter, as time passes many other factors add to decrease its worth which is easily reflected in its value at the time of resale. Here in this blog, we’ve enlisted a variety of factors that are responsible for the car’s depreciating value. Let’s get started!
As your trusted car buyer, Brisy Cash For Cars has come up with this comprehensive guide to help you with questions such as “How do I find the market value of my car?”, “Where can I get my car evaluated?”, and more. So, let’s plunge in to find out the answers! Additionally, the car’s depreciation rate can be helpful in plenty of other ways like negotiating car deals or leasing the vehicle
Factors Affecting Car Depreciation Rate in Australia
Car’s Brand
Automotive depreciation depends highly on the company manufacturing them. Cars from luxury and renowned brands like BMW, Tata, Audi, Mercedes-Benz, and more are known for their exceptional build quality, comfort, and material, hence their depreciation rates are lower than other lesser-known or mediocre car brands.
Besides this, the lower depreciation on cars vis-à-vis esteemed brands is also due to the legacy they have maintained and the unparalleled technological advancements they’ve shown over the years.
Car’s Model
Car depreciation rates depend a lot on their model. SUVs
and MUVs depreciate slower than other compact car models and can retain their value for a long time. This is due to the fact they have higher fuel efficiency, low environmental impact, and more.
Car’s Age
Just when a new car is driven off the driver’s lot, its value can depreciate by 10-15%. In the first year, the car depreciation rate is slower than in the subsequent years. From the second year, the rate becomes steady. However, the right upkeep and minimal mileage can help counter the faster depreciation of a car.
But there are certain other vintage and classic cars whose value increases over time due to their outgrown enthusiasm among car lovers.
Car’s Condition
Certain car depreciation calculators in Australia evaluate the car’s value considering its condition as a key factor.
While it can be tough to comprehend the car’s condition by just gawking at it, things like car repair and maintenance receipts and relevant paperwork steer clear of the guesswork. Also, the well-maintained repair and maintenance record of the car develops a sense of certainty in a buyer that the car was maintained properly.
Market Demand
The current market demand determines the depreciation rate of the vehicle to a great extent. Generally, it is seen that when a car’s model is in high demand but low supply, it has lower depreciation, but at the same time, if it has abundant supply with low demand, it will result in faster depreciation.
Fuel Efficiency
Amidst the rising living costs and increasing fuel prices in Australia, cars that offer high fuel efficiency tend to retain a higher value than other cars.
Transmission
In this fast-paced technological landscape, people are more into buying cars geared with automatic transmissions than manual transmissions. These cars retain their value for longer. However, this is not true for all cars. There are some high-end sports cars with manual transmissions that can retain their value better due to their outgrown popularity among car buyers.
What to do to minimize a car’s depreciation rate?
Any car that’s off from the dealer’s lot is sure to depreciate but the rate at which it depreciates can be minimized by considering a few things: Ensure proper upkeep of the car and save all the records and paperwork to make the deal appealing to the buyer. Always buy a car from a reputed brand. Proper research and the right selection can help you get a high resale value for your car. Unless absolutely necessary avoid unnecessary car modifications.
CONCLUSION
Understanding car depreciation in Australia is crucial for making informed financial decisions whether you’re buying, selling, or trading in a vehicle. Knowledge of depreciation not only empowers you to choose vehicles that hold their value better but also aids in negotiating fair prices, ensuring you get the most out of your automotive decisions in the long run.
Want the right value for your car? Brisy Cash For Cars buy cars of all makes and models while offering competitive prices. Other than this, we offer Free Car Removal services, thereby making it easy to dispose of your vehicle. Last but not least, we responsibly dismantle and recycle cars, ensuring ecofriendly practices.
