What Is Car Depreciation?

If you purchase a brand-new vehicle, one of the factors you’ll want to consider is depreciation. While new vehicles come with a new vehicle warranty and feature the latest technology, some Mesa shoppers find that the trade-off isn’t worth the large amount of depreciation. So, what is car depreciation? Vehicle depreciation is the rate at which a vehicle loses its value over a certain period of time.

 

 

In many cases, new vehicles depreciate much quicker than pre-owned vehicles. But, before you opt for one of our pre-owned models, how does car depreciation work and when is the best time to take advantage of depreciation? Our experts at Cactus Jack's Auto will help you find out below! Be sure to check out our other car-buying tips to ensure you’re ready to find the right vehicle for your Surprise lifestyle.

How Does Car Depreciation Work?

There are several factors that could affect a vehicle’s depreciation rate. Some vehicles will depreciate more than others but the best way to ensure your vehicle’s value is maintained is by keeping it properly maintained. Whether it’s ensuring that your vehicle is mechanically sound or cosmetically in pristine shape, keeping your vehicle in good condition can help reduce depreciation. Here are several factors that could affect a vehicle’s depreciation rate:

  • Make & model
  • Age
  • Mileage
  • Ownership history
  • Color
  • Maintenance history
  • Overall condition

When’s the Right Time To Buy a Used Car?

With rates of depreciation varying across various makes and models, you may be wondering when it’s a good idea to purchase a pre-owned vehicle. One thing to remember is that as vehicles age and depreciate, you may get them at a good price but they may require more maintenance and repairs which could offset the savings you enjoyed on depreciation. With that in mind, when is the right time to buy a used car? Take a look at some things to consider with depreciation depending on the age of the vehicle:

  • 1 – 3 Years Old: Around the one to three-year mark, a vehicle can lose up to a third of its value in depreciation on average. While it’s not the most amount of depreciation, it’s a smart option if you want a like-new pre-owned vehicle at a smarter price.
  • 3 – 4 Years Old: Most vehicles lost over half their value by year four and can be a great option if you want to take advantage of depreciation on a pre-owned vehicle. This is usually what most shoppers will consider the “sweet spot” when it comes to buying a pre-owned vehicle.
  • Up to 10 Years Old: Anything around or older than 10 years old typically has experienced the bulk of depreciation but you may run into issues with finding one that has been well maintained.

While age is a factor to consider with depreciation, our recommendation is to find the most well-maintained pre-owned vehicle you can find that fits for budget and needs.

Find the Right Pre-Owned Vehicle for Your Needs With Cactus Jack's Auto!

Whatever you’re looking for from your next pre-owned vehicle, our team of professionals has you covered. We’ve assisted shoppers from Phoenix and beyond and we look forward to assisting you. Visit one of our many locations today to learn about the next steps!

 

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