In a previous article we had a deep look at depreciation and how cars lose value over time. That raises the question of when is the best time to buy and sell to get the best benefits? We want to have a look at that today. Then, if you want to try your hand as a car broker, you can learn from us.
Consider the three year rule
To give a quick recap, vehicles depreciate and lose value as they age. It happens for a number of reasons, including wear and tear. If you are planning to buy a new car, it is a good idea to consider how much the depreciation will affect the value in the future if you decide to sell. On the other hand, if you buy a used car, you will want to see how much you can potentially save.
There is an important thing to keep in mind here; the three year rule. Basically, it reminds you that vehicles depreciate the most within the first three years of ownership. On average it is around 25% of the value in two years. Then it can be 15% in year three to year six.
So, when it comes to buying, target vehicles that are over three years old. If you do, it means someone else has taken the loss of the fastest period of depreciation. You can save a nice amount of money and protect yourself from the loss.
When to sell?
The depreciation causes a bit more trouble when it comes to selling. On average people in the UK own vehicles for four years. Therefore, if you buy new, you’ll incur the worst of the depreciation.
Sometimes the only option is to hold on to the vehicle for longer, ideally more than five years. You will benefit here because depreciation will start to slow significantly.
While you use your vehicle, make sure you maintain it carefully to keep it in good condition. Keep a full record of all services, repairs, etc. If you can, manage the mileage too. This can all help you to boost the value and offset the depreciation.
Think you could be a car broker?
Buying and selling cars can be quite a stressful process. Luckily, there is help out there if you need it. It can be easier to go to a dealer or speak with a broker. The latter focuses on finding cars for dealers and individual buyers. So, they can help to arrange deals.
Many people have what it takes to become a successful car broker; they just need the right tools to help them get started and support along the way. We can offer both. You can learn more on our website and have a look at the fantastic products that are available. In addition, you can reach out and speak to us for more details.
