Unfortunately, most things don’t age as well as a fine wine. This is especially true when it comes to your vehicle. While you can keep the odometer rolling with care and preventative maintenance, it doesn’t help much with its value. Unlike an investment such as your home, which grows in value and develops equity, your vehicle does the opposite, and at a much quicker rate. According to CarFax, a brand new car can lose over 10% of its initial value within the first month, and over 20% during the first year. This trend continues at a rate of 10% each year for the first four years.
What can I do to Decrease My Vehicle’s Depreciation?
While there is no way to turn your depreciating asset into an appreciating one, there are a few things you can do help it hold its value. The less you drive your vehicle, the better. Keeping its usage below 10,000 miles per year is ideal. You can also perform routine maintenance, and keep records of it. Do the manufacturer recommended services, change the oil regularly, and take care of the interior and exterior.
Why is it Important to Understand Depreciation?
Depreciation is an important concept because it dictates how much your vehicle is worth. This is especially helpful if you are ever in a collision. Your car’s age, mileage, and condition will all be considered by insurance companies as they assess whether to pay for a repair or declare it a total loss. However, the most important thing to understand if you are ever in a car accident is that selecting a repair shop is your decision. Your insurance company or the at-fault party’s insurance company may try and sway you to their preferred center, but it’s your right to choose where your vehicle is repaired.
The experts at Medines Collision Center have been helping drivers in the Baton Rouge area for decades. They take the confusion and frustration out of dealing with insurance companies and get you back on the road.