The Depreciation Of A Vehicle Over The Years

The depreciation of a vehicle is inevitable. Just leave the dealership and the newly acquired model loses at least 10% of its value.

But neither should this depreciation in value be taken as a tragedy. It is a completely ‘natural’ phenomenon, on which some forecasts can be taken into account to slow down, at least partially, its effects.

Residual value

This is a concept that worries many car owners . The value that your property will have after a certain number of years of use and a certain mileage.

How the depreciation of a vehicle is calculated

There are some mathematical formulas to calculate the progressive depreciation of a vehicle. However, it is not a totally exact science; Some factors beyond the direct control of the owners, such as market trends, may influence the equation; all this is usually taken into account by insurance companies.

In summary, it is estimated that after a year on the road, a standard car, from a recognized brand, has already lost at least 10% of its initial value. This figure is added to the first 10 percentage points that he had already lost when going from kilometer ‘0’ to ‘1’.

If it is a brand with a bad reputation, the drop is up to 35%. In the most dramatic cases , the depreciation of a vehicle, after 365 days of purchase, can represent a decrease of 50 percentage points.

From 100 to 40 in 5 years

All of the above reflects that, generally speaking, most cars depreciate by at least 60 percentage points, after five years out of the dealership.

As an example : a Renault or Peugeot crossover that cost 20,000 euros five years ago, today has a value, within the second-hand car market, of 8,000 euros.

Other factors that condition the depreciation of a vehicle

Time is not the only element that plays against the resale price. Other factors, some of which depend almost exclusively on how the vehicle is treated by its owners, also remain.

In many cases, we see damaged bodies, with obvious bumps or scratches to the naked eye or after a thorough inspection. To maintain the value of a vehicle, corrosion must be prevented from settling on the metal. Once this has happened, reversing the negative effects requires large expenses.

Reckless and careless drivers wear out their vehicle excessively, and this can easily be seen in the condition of the vehicles.

Other details that remain

The mileage achieved is perhaps, after years of life, the factor that most affects the depreciation of a vehicle. Although these machines are developed to run perfectly, at least 100,000 kilometers in five years, this is a figure that can be important for the proliferation of mechanical failures.

The number of owners within the vehicle’s history is another factor to consider for its appraisal. The greater the number of ‘hands’ the vehicle has passed through, the lower its value.

 It also has a detail that can be disregarded by some people: if the car sleeps safely in a garage or does it on the street.

When color matters

It may seem difficult to understand. However, it is a perfectly measurable fact that, when it comes to the body of a car, there are shades that devalue more and faster than others.

Smoker or non-smoker

Tobacco addiction, in addition to being harmful to health, is also a factor that accelerates the loss of points from a car in the second-hand market.

Only the stench that remains in a smoker’s cabin is a widely rejected detail. And removing this trace is often a mission impossible.