When it comes to car finance no one wants to end up with an upside down loan, the dreaded situation where you owe more on your car loan than the vehicle is worth. Savvy consumers will do their research and look for vehicles that best retain their value.
Generally, depreciation is based on market demand for a vehicle Ferrari, for instance, is known for carefully selecting its buyers and then producing a limited number of its models to keep demand in the marketplace high. Popular extras will often help boost a car’s resale value while positive press (such as good safety ratings) and endorsements can also have an impact. Outside of these influences, there are a few overarching tips to consider so you can actually “get what you pay for”.
When it comes to vehicles, which cars tend to depreciate the quickest?
New vs used
The saying is true, a new car depreciate the second it is driven off the lot. Generally, new cars depreciate the most in their first year losing about 20 percent of its value in those first 12 months. Thus, many buyers will purchase “near new” vehicles and last year’s model as they tend to have hit the brunt of their first year’s devaluation.
Fuel Economy
These days, fuel economy is one of the most desired traits and many petrol guzzlers will find the values of their cars plummeting faster than they can refill their thirsty tanks. Recently, diesel cars have been in higher demand for their fuel economy and small efficient vehicles have also retained much of their value.
Bargain Basement Prices
Wonder why certain models seem like such a great value at the end of the year? Many dealers do their best to push through less popular stock at the end of the year to help clear out their inventory. If a model is nearing the end of its production line with many unsold vehicles on the lots, chances are they’ll experience some falling price figures in the next year.
Top Depreciating Cars
Meanwhile, Australia’s CarsGuide has released its list of fastest depreciating vehicles, with the Ford Falcon topping this list retaining just 47.9 percent of its value after two years. As noted above, large cars have been hit the hardest in the resale due to higher petrol consumption. Meanwhile, the Honda Civic Hybrid performed the best when it comes to depreciation, losing just over 12 percent of its value after two years. For more information on vehicle financing for a used or new vehicle, visit GetApproved.com.au for expert advice and competitive financing options.
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