Car Depreciation: 5 Important Points

Car depreciation is a factor you need to consider when buying a car. Oftentimes, people looking for a new car find themselves wondering if the average car is a good investment or not. It may surprise you to learn that most experts believe cars are not — since, with few exceptions, new car depreciation is staggering. But there are some simple ways to protect your investment and retain as much of the value as possible as you move forward.

Buy Smart
Probably the easiest way to get value out of your car as an investment is to stick with makes and models that hold onto their value over time. Research the cars you're interested in and see which ones tend to keep more of their value over time. It wasn't long ago that most people turned to foreign cars exclusively for long-term value, although today more people are finding good value in European and American brands also.

Take Care of Your Investment
Car depreciation can be mitigated by how well you maintain your car. Take good care of your car, keep your documentation whenever you have service done, keep the mileage as low as possible, maintain it carefully and you should expect to get the most for a trade-in when it comes time to buy a new car.

Buy at the Right Time
If you time it right, it's often beneficial to buy a new car right when it's about to be replaced by the newer models. Dealers are motivated to get the previous models sold, and this can help your bottom line. Of course one of the surest ways to avoid any car's plummeting value is by getting a used car. Although used cars also depreciate over time, they don't suffer the same huge drop in value upon leaving the lot that most new vehicles do. Auto dealers who are hip to this fact tend to price their offerings accordingly, giving you some outstanding opportunities for a good price.

Consider Leasing
Another consideration when looking at car depreciation is whether you should lease or buy. Depreciation isn't a factor when it comes to leasing since you're essentially renting the car and you return it to the dealership at the end of the lease period.

Comparison Shop
Often a little research is all that's required to get the best return on the car you buy. Comparison-shopping and checking online message boards are good ways to do some comparisons and protect yourself from predatory tactics. You can often nail down a great price simply by understanding how repairs and warranties work. Stick with auto dealers who communicate such details effectively, since knowing the facts could literally save you thousands of dollars.

Finding good car dealerships that offer good cars at fair prices is one of the great pleasures of buying a car. If you want to save money on that initial purchase and get a little extra back on your next trip to the auto dealers, do yourself a favor and conduct some depreciation research before you sign on the dotted line.