Cars, depreciation, and the market
Deciding to sell your car is never easy, and there are numerous factors that can and should influence your decision. When it comes to value and wanting to remain in the car market without losing money, then the best time to sell your vehicle is by calculating what you’ve paid in against what you can get out. This will leave you in a break-even situation, and you might even be able to put some cash in your pocket. But let’s face it, when it comes to your car, it is not a dispassionate cash-transaction because you should be passionate about what you drive.
So, let’s delve into it. Depreciation is a factor of external market conditions, and there is little that you can do to lessen its effects. Numerous factors can influence depreciation. From the initial value of the vehicle to the make and model, age, kilometre reading, etc. Car makers like Ford, and to be more specific; the Ford Kuga, have of late had a run of bad luck and recalls, this means that the reputation of the car model has taken a dip. As a result, the Ford Kuga has lost some monetary value, because people no longer trust the model in both the new car market and second-hand car market. Unfortunately, there is little recourse for the consumer in these instances. The best advice for a Ford Kuga owner (or if you ever find yourself in a similar situation) is to hold on to the vehicle until the dust has settled and the press has died down.
But, car depreciation is not the only reason you might need to sell your car because as it so often does, life happens, and your circumstances change. Selling your car to suit your lifestyle, whether an upgrade or downgrade is sometimes a necessity, and despite the current value of your vehicle, you can remain in the car market. Financially, staying in the golden middle of the market is a good place to be, here you can buy, trade and sell without losing money.
However, if your vehicle has been racking up kilometres, and you’ve been relying on ol’ faithful for the past ten years, you can still sell your car if it’s too expensive to maintain. Consider that the average hourly rate for vehicle maintenance and repair is around R600, without the parts needed to fix what’s broken. So, it might become more costly to maintain, and it’s losing market value.
The Trans Union Auto Dealer’s Guide is used by most as the holy grail to determine the resale value of any vehicle, but here too there are a lot of factors that you can use to determine the value of your car. You have the power to negotiate what you are willing to sell your car for, and extras on your vehicle and market demand will give you an edge. When you are considering selling your car, you might find more success in your dealings from a bigger independent dealer who is not hampered by cash-flow issues. Whereas a smaller dealership’s cash flow might necessitate selling to trade, which could lessen the value of the exchange to you.
Admittedly, depreciation is not necessarily the best measure to check financial viability and best choice. Fundamentally, it comes down to what you can afford, what works best for you and what best serves your needs and wants.