Car depreciation is a term used in the automotive industry. It refers to how quickly your vehicle loses its value over time. Time plays a big part in this because every year after your purchase, new cars get released with better technology and more modern features that will eventually send the demand for your car plummeting. This is often called "car flipping" and usually happens within the first couple of years of owning a car. Car rental companies frequently take advantage of leasing cars for two years before returning them back into circulation, which essentially turns someone else's $20,000 brand new car into another company's $10,000 rental car. This problem has been going on for a while. Still, it is especially prevalent today, with leasing being many Americans' preferred method of buying a new car.
So how can you avoid or slow down this process? You definitely won't be able to stop depreciation entirely. Still, there are a few things that will help stretch out the value of your car for as long as possible:
1) Buy used
Every new model year brings an all-new design which means massive changes from previous models. In addition to exterior and interior updates, these changes also affect performance and quality, among other things. Although most cars don't drastically change from one model year to every year, small improvements add up over the years. Since each car loses a percentage of its value every year, buying a new car means you will lose more money in the long run because you're sinking a larger sum into something worthless and less as time goes on.
2) Buy quality
Buying a well-made vehicle will give you significantly fewer issues in the long run, which will end up saving you time and money down the road. This is especially true for things like engines and transmissions, where problems can be very expensive to repair or replace, not to mention time-consuming, which could mean missing out on work or losing out on making money while your car is being repaired. Getting one with a reliable engine and drivetrain will save you far more money in the long run.
3) Keep it clean
When you keep your car clean, not only will it look nice, but it also helps protect the exterior from rust and corrosion, which can lead to expensive repairs in the future. Keeping up with simple maintenance like waxing regularly is another easy way to make sure your paint job stays shiny while preventing rust from doing damage underneath the surface of the metal. Finally, storing items in your trunk or back seat instead of leaving them loose inside may help prevent dents that could eventually rust out the floorboard if left alone for too long.
4) Drive responsibly
Excessive speeding or harsh acceleration/braking is bad for gas mileage, which means burning more fuel over time since gas is constantly being burned on the road. Not only does this speed up gas consumption, but it also puts extra wear and tears on your car, which means even more maintenance on your schedule to keep everything in good condition for as long as possible.
5) Buy from a reputable dealer or individual
Car auctions are great if you want to get a steal of a deal, but buying someone else's problem is never worth it in the long run; if something breaks soon after purchase, that can't be fixed easily like an overheated engine due to bad thermostat/coolant levels. Make sure any pre-owned vehicles you look at have been cared for properly throughout their life, including regularly scheduled maintenance and repairs done by professionals. You should also feel free to bring your own mechanic or car dealer with you when looking at a car so they can inspect it for you. Although most dealerships are reputable, not every dealership is the same. Some tend to cut corners when doing repairs, leading to future issues down the road.
6) Get the best warranty available
If buying new, getting an extended warranty on your bumper-to-bumper parts ensures that costly repair bills will never come in the mail if anything breaks soon after purchase. Even if buying pre-owned, many places offer warranties on their used inventory which lets you know that people have had good experiences with their cars without having any outstanding problems once sold. Warranties are especially important on high-end luxury vehicles where even minor things like electrical or electronic parts can be very expensive when given out for whatever reason.
7) Buy a car that matches your lifestyle.
If you're the type of person who likes to drive their car into the ground and replace it every few years (or even months), then buying a high-end sports car is not going to be worth it down the road since they require regular maintenance and repairs like oil/filter changes, transmission work, new spark plugs, etc... if driven hard or put through strenuous activity such as racing. On the other hand, cars designed for high performance can handle high speeds and racing, so people who enjoy this tend to get more value from them than someone who just drives them back and forth from home to work without any special care required. The point is to think about what you plan on using the vehicle for and how often. Don't buy a high-tech luxury car if you're driving it offroad, don't race your minivan, etc...