Car depreciation can be defined as,
Different car brands will have different rates of depreciation.
*Tip: Reliable and well-established car brands will generally have a lower rate of depreciation (Think Toyota, VW, BMW, Merc).
If you buy a new car, the moment you drive it, it will be worth a lot less than what you just paid for it. Here are some facts,
*Tip: To avoid the brunt of depreciation considers buying a used car with low mileage.
BMW is considered to be a luxury brand and holds a strong position in the market. The depreciation on a BMW is therefore generally considerably less when compared to other brands.
|BMW 3 Series (2022): (R731624)||Year 1||Year 2||Year 3||Year 4||Year 5|
|Value:||N$731 624||N$621 880||N$541 035||N$486 932||N$443 108|
|Total Loss:||N$109 743||N$80 844||N$54 103||N$43 823||N$35 448|
This table clearly demonstrates how a car loses value over time. Over 5 years, the total loss due to depreciation adds up to a staggering N$288 516. Let’s look at the factors that affect the rate of deprecation.
Many factors influence the rate of depreciation for any given car. Here are some factors to take note of, especially if you plan on selling the car,
You can’t avoid car depreciation but you can minimize its effects. When buying a new car or used car consider the following,
Depreciation is inevitable. The most you can do is to buy a car that has a good reputation in the current market and maintain it to the best of your ability, that way you will get a better return when you decide to sell the car.