Category Archives: Used Car Depreciation

Why Buy A Used Car

Why Buy a Used Car?

Purchasing a used car can be just as rewarding as buying a new one, and less expensive, too. If your trusty, paid-off car starts having major mechanical problems – and it will – it might be time to replace it. Before you sign on the dotted line to finance that brand-new vehicle, though, consider buying a used car from Auction Direct USA in Rochester NY, Raleigh NC, and Jacksonville FL.

Avoid the New-Car Expenses

Now that it’s time to consider replacing your vehicle, where do you start? New cars are certainly nice and usually come with the promise of low payments, low interest rates, warranties and more.

The problem, though, is that when you sign to finance a vehicle, it can depreciate as much as 9 percent as soon as you leave the car lot, according to Edmunds. You just agreed to pay $20,000 for that car, and one minute after you start it up, its value becomes $18,200. A year later, you are still paying $20,000 (plus interest), but that car is worth $16,200. After two years, the value is $13,800.

A new car also incurs more costs than a used car when it comes to registering it and paying sales tax, which is usually calculated based on the value of the car. Then there’s the cost of insuring that nice new ride. A new vehicle often costs more to insure than a similar used one because the manufacturer’s suggested retail price often is considered when determining the insurance premium.

If you are looking for a great deal – and who isn’t? – consider purchasing a used car that was worth $20,000 two years ago for considerably less now. Sure, it has a few miles on it, but if you find a reliable pre-owned car with good service records and low miles, you still might drive home with that new-car smell. And after you get it registered and insured, your neighbor with the new ride will certainly be jealous of all the money you now have.

Take a look at Auction Direct USA’s inventory and find used cars that will fit any budget!
Located in Rochester NY, Raleigh NC or Jacksonville FL.

Used Car Depreciation

Used Car Depreciation – Is Your Vehicle Holding its Value?

 Consider that you are now a proud owner of a brand new vehicle for which you have spent a large amount of money. How much would it be worth in a year? Even if you do maintain it well, take it for regular repairs and keep it in great condition, the value of your car would reduce considerably as time goes by. This effect is called depreciation, and according to a research conducted by CAP Automotive; you may end up paying almost three times as much as your fuel expenditure for the depreciation in the value of your car.

Used car depreciation contributing factors

 The value of each car reduces at different rates, but it is typically observed to be between 15 and 35 percent in the first year after purchase and can cross 50% in three years. To check if your vehicle is holding its value, you need to know what contributes to the increase in its rate of depreciation. The following factors contribute to your car’s faster depreciation:

  • A number of owners: The more the number of users of a single car, the higher its rate of depreciation. The number of previous owners can be checked on the V5C registration.
  • Service history: The more the number of services you complete, the higher will be the selling value of your car.
  • General Condition: Any damages to the bodywork or the interior parts of your car will reduce the selling value.
  • Mileage: The more you use the car, the lesser will be its selling value. Check the number of miles that your car has run.
  • Fuel Economy: The more miles your car can run per gallon of fuel, the higher would be its value in the market.
  • Size: Larger, more luxurious cars cost more money to run and maintain, which is why they depreciate faster than smaller cars.
  • Desirability: Some models of cars are re-released with improvements in technology, exterior design, and some additions. The more recent the model, the slower your car will depreciate.

How do you minimize depreciation?

 The knowledge of all the contributing factors is sometimes not enough to reduce the depreciation of your vehicle. There is no substitute for market research, where you can get an accurate idea about the value of your car. By keeping in touch with current events, you will know when your vehicle’s replacement model arrives, and you will also realize that popular colors sell at a higher price. With some knowledge and eye for an opportunity, you will be able to get the best value for your car.

Let Auction Direct USA help you in choosing just the right used car for you and your family with your budget in mind.  Whether you’re looking for used cars in Raleigh NC, Jacksonville FL, or Rochester NY, we have many used cars to choose from!  Visit our used car dealership near you today!