When you buy a car, one big worry you’ll have is how fast it will lose value. In South Africa, new cars can drop by a whopping 15-20% in just the first year! Buying a new ride can hit your wallet hard. That’s why maintaining your car’s value is so important.
What’s the deal with car depreciation?
Car depreciation is the rate at which your vehicle’s value decreases as it gets older. The drop in your car’s value depends on things like mileage, how well you take care of it, market trends, and the type of vehicle you drive. For example, luxury cars often lose value more quickly than economy cars, because they come with higher maintenance costs and there is less demand for them across the used car market.
In South Africa, where new cars can be pricey, getting a grip on depreciation is important. If you don’t manage your car well, your car could lose value faster than you think, leaving you with a lot less cash when it’s time to sell or trade it in.
Common factors that affect depreciation
No matter how much you love your car, it’s going to lose value over time. Some things do, however, speed up that depreciation. Here’s a breakdown of what influences your car’s depreciation in value:
Mileage
One of the biggest culprits behind depreciation is mileage. The more kilometres you rack up, the quicker your car’s value takes a hit. Lower mileage usually means less wear and tear, making your car more attractive to buyers.
Accident history
If your car has been in an accident, it’s likely to lose value faster, even if it’s been repaired. Buyers generally prefer vehicles with no accident history, as past damage raises concerns about long-term reliability.
Age of the vehicle
New cars lose value fast! Often between 15-20% in the first year alone. After that, depreciation slows down a bit, but your car will still lose value each year. The older your vehicle, the less drastic the drop in value.
Condition of your vehicle
The condition of your car plays a huge role in its resale value. Any visible damage like scratches or dents can lead to a sharper decline in value. That’s when having a Scratch and Dent Insurance policy from Bidvest Insurance can save you big bucks.
Modifications
While customising your ride might seem fun, it can actually hurt the resale value of your car. Modifications like body kits or flashy paint jobs may limit your pool of potential buyers and make selling your car difficult.
Service and maintenance history
A well-documented service history can boost your car’s value. Buyers are more likely to pay extra for a vehicle that’s been consistently maintained according to manufacturer guidelines.
How to preserve your car’s value
Want to make sure your car holds its value? It takes a bit of TLC and making smart choices along the way. Here are some easy tips to keep your ride in top shape and reduce its depreciation:
- Stick to the service schedule: Make sure you follow the manufacturer’s service schedule. Regular check-ups keep your car running smoothly. Plus, having a full service history from trusted service centres makes your car more appealing to future buyers.
- Go for genuine parts: When it’s time to replace parts, always opt for genuine or manufacturer-approved ones. They keep your car in tip-top shape and avoid problems that cheap parts might cause. Going for aftermarket parts can hurt your resale value.
- Keep it clean: Regular washing, waxing, and tidying up the interior are important. A clean car looks awesome, and is protected against long-term damage from dirt and grime.
- Avoid over-the-top modifications: As tempting as it is to customise your ride, too many modifications can turn off potential buyers. Stick to simple upgrades that enhance functionality, without changing your car too much.
- Drive with care: Aggressive driving can wear out important parts, speeding up depreciation. Smooth driving helps keep your car in great condition and extends its life.
- Protect the showroom shine: Consider investing in a Scratch and Dent Insurance policy from Bidvest Insurance. Our Scratch and Dent Insurance is designed to keep your vehicle looking as good as new by covering minor dents, scratches, and chips that damage your car’s value.
Car buying strategies to minimise depreciation
To protect your investment and minimise depreciation, consider these key buying strategies:
Buy used, not new
One of the best ways to dodge steep depreciation is to find a good deal on a used vehicle from the current or previous model year. New cars can lose a ton of their value in the first year of ownership. When you choose to buy a used car, you skip that initial depreciation hit, while still enjoying a relatively new ride.
Opt for popular models
Choosing a popular car can make a big difference when it’s time to sell. Widely recognised models tend to have higher demand, which helps them retain their resale value. Plus, cars that are easier to find parts for are usually more appealing to buyers.
Prioritise fuel efficiency
With rising fuel prices, fuel-efficient cars are more desirable. Buyers may be willing to pay slightly more for vehicles that save at the pump.
How a Motor Warranty helps retain your car’s value
A Motor Warranty is more than just your financial safety net for unexpected mechanical or electrical failures – it’s also a key factor in preserving your car’s value over time. Here’s how:
Cost-effective repairs
A Motor Warranty ensures that if your vehicle suffers a mechanical or electrical breakdown, the repair costs are covered. This helps to prevent a strain on your finances, as you won’t need to cover expensive repair bills out of pocket. Whether it’s an engine issue or a faulty gearbox, your Warranty will cover the important components that keep your car running smoothly.
Well-maintained cars retain value
A vehicle with a Motor Warranty is typically better maintained. When you know that repairs are covered, you’re more likely to address mechanical problems immediately, keeping your car in good condition. Well-maintained cars, with fewer issues, tend to hold their value much better, making them more attractive to buyers. Having a Car Warranty ensures that even as your car ages, it remains covered for major repairs, helping preserve its value and reducing depreciation.
When you stick to some (or all!) of the strategies mentioned in our article, you can significantly reduce depreciation and maintain your car’s resale value.
Ready to protect your investment? Explore a Motor Warranty or Scratch and Dent Insurance from Bidvest Insurance today. Keep your vehicle looking great and functioning well, while preserving its value. Complete the form below, and we’ll have a consultant call you.
