Let’s face it: buying a car can be a complicated and sometimes stressful decision. There are endless decisions to make and costs to consider. As a result, we often overlook an important factor — depreciation. Check out these 4 tips to help you avoid buying a car that’ll lose its value faster than a brick falls.
1. Buy used
Imagine this. You just signed the check for your brand-new car. The salesperson hands you the keys and you fire it up. You feel cool, confident, and excited having made the biggest purchase of your life. You roll down the window and the fresh breeze rushes in. You reach into the backseat and grab a stack of hundreds. You throw it out the window and watch it blow away.
This may seem far-fetched, but it’s closer to reality than you think. On average, a new car loses 11 percent of its value the second it’s driven off the lot. That’s a tough pill to swallow when every dollar matters.
Though there are many benefits to buying new — fewer coffee stains on the seats, for example — it’s tough to argue with 11 percent. Buying used, even if it’s only been used a month, is a great way to avoid that initial depreciation.
Check out these tips for getting the best deal on a used car.
2. Choose your car wisely
Cars that depreciate the least are worth nearly 70 percent of their original price after 5 years. The ones that depreciate the most? They’re closer to 37 percent. That’s a huge difference! Buying a car that’s “depreciation resistant” can put more money back in your pocket if you decide to sell. Do your research — find out which kinds of cars hold their value best.
Here are a few tips to get you started:
- Buy a reliable car with great safety ratings (it could also be cheaper to insure).
- Try a bright color like yellow or orange. On average, cars in bright colors depreciate 7 to 8 percent less than black or gray cars.
3. Treat your car as you’d like to be treated
If you treat you car well throughout its life, it’ll be worth more down the line.
Here are some easy things you can do to keep your car in tip-top shape:
- Wash it frequently: this not only makes you look better (research pending), but it might even prolong the life of the paint
- Clean your windshield often to help it stay crystal clear longer and improve visibility
- Vacuum your carpets once every month to keep dust bunnies and mold away
4. Stay up-to-date with maintenance
Who wants to buy something that hasn’t been looked after? Having a good maintenance pedigree can preserve your car’s value. We recommend these pointers to keep your 4-wheeled companion running great:
- Change the oil and check fluids as instructed in your car’s manual
- Monitor your tires: regularly check air pressure and rotate every 6,000 to 8,000 miles
- Replace old windshield wipers
- Schedule regular checkups
So when you’re buying a car, don’t forget to take depreciation into account. Using some or all of these tips can mean more money in your wallet (and less out the window) if you sell your car.
We all know the best way to protect your car is with a car insurance plan from Esurance. And worry not — great insurance never depreciates. Get a free quote today.