The market for used cars in India is booming as the preference for personal mobility has grown exponentially since the COVID-19 began last year. In some places, markets are facing a crunch due to the huge demand. According to the latest reports, India’s pre-owned car market is estimated to reach USD 50 billion by 2026, with a CAGR of 15% in the period between 2021-2026.
While the buyers are opting for second-hand cars to avoid public transport, the latest trends show that more people are going for luxury cars with no budget constraints. If you are one of those who wish to buy a pre-owned luxury car, a comprehensive understanding of car depreciation is critical to make the best decision.
Understanding Car Depreciation
In general, depreciation can be defined as the decrease in the value of an asset. In the case of a four-wheeler, car depreciation begins the moment you drive your car out of the showroom, irrespective of whether you buy a brand new car or a pre-owned one. Also known as used car valuation, car depreciation is the difference in the car value when you purchase it and when you are ready to sell it. This is the reason many people opt for used cars as the depreciation rate goes slow for older cars when compared to new cars which lose value at a higher rate.
Factors That Affect Car Depreciation
Several factors affect car depreciation which ranges from the brand, model, year of manufacture etc. Here is a list of things which are considered for car valuation.
Car Condition - As mentioned, the older the car gets, the less value it has in the market. Plus, the physical car condition such as exterior, interior, physical appearance and damages etc., impacts the car valuation.
Mileage - One of the major factors that affect car depreciation is mileage which is directly connected to the distance travelled by car. A higher reading on the odometer would mean higher depreciation. Also, the mileage of a car is often affected by different factors such as road conditions, driving patterns etc.
Service History - A simple look at the service history of the car reveals important details on whether servicing schedules were kept or not. Also, one can assess vehicle performance, quality and maintenance issues with the vehicle.
Fuel Efficiency - Cars with higher fuel efficiency are always in demand as they are cost-effective. Thus, it has slow car depreciation and long-term resale value.
Desirability and Drivability - Some car models are more desirable than others. Those cars with more desirability factor among customers will always have demand in the market. Also, drivability which encompasses factors like performance, features and style play an important role in car depreciation.
How to Minimize Car Depreciation
Now that you know about car depreciation, find out a few ways you can minimize car depreciation.
Smart Car Buying Decision - It is essential that you buy cars that have a good reputation in the market. Moreover, you should choose cars which others would be interested in buying in the future. It will be a smart car-buying decision that will negate the effect of car depreciation.
Routine Service and Cleaning - Following the routine service schedules is the first major step you can take to keep up the performance of different car parts. Also, regular cleaning can keep the car attractive and help to minimize car depreciation.
Paperwork - Maintaining and keeping the paperwork and service history records also helps.
Auto Hangar is one of the leading and trusted pre-owned luxury car dealers in India, with more than two decades of experience in the field. Find an amazing range of used cars from Mercedes-Benz and other brands at our place. Also, you can contact our experts for other details such as Mercedes second-hand price, car valuation, financing options and much more.
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