How Many Miles Until My Car Loses Value?

How Do I Know When Is The Right Time To Trade My Car?

Did you know that your car loses its value as soon as you purchase it and hit the road? Yes, that’s right. According to one estimate, a brand-new car loses its value by 9-11% as soon as you get behind the driver’s seat and take it home. The figures get more daunting. Research indicates that new cars lose their value and are worth only 20% less than their original price in the next year. So why is that the case and at what point should you wait until you trade off your older model to get a new one? Let’s take a look.

Car Depreciation

Before we dive into the semantics, let’s understand the concept of depreciation. In laymen’s terms, it’s simply the difference between the amount you spend when you purchase the car vs. the amount you get back when you trade it in. It’s one of those concepts that are pretty overlooked when people are buying a car, although that’s not how it should be. After your fuel cost, it’s probably the biggest hidden expenditure and will impact your car’s life significantly.

How Many Miles Until the Depreciation Begins

As we mentioned earlier, the depreciation begins the second you hit the road. Once you cross the 5-year mark, the new car’s value declines even more. After the first year has passed, your new car will face a deprecation of 15-25% every year up until 5 years. So you can expect the car to lose 60% of the original value in the next 5 years.  According to the United States Department of Transportation Federal Highway Administration, most Americans drive for around 13,500 miles per year. If you break that down, it comes down to 1000 miles every month, which means an average person uses their car a lot.

The Cut off Value

Most people believe that the threshold for cars is usually 10,000 miles. Once people cross that, they start wondering if it’s the moment to sell the car. However, this article will look at what happens to your car the more mileage it covers.

0-30,000 miles

Most experts agree that the warranty for your car usually expires as soon as you cross the 36,000 miles mark or third year of your car ownership, whichever you encounter first. If you have crossed the benchmark, you might want to consider trading in your car if you want a newer model or something more sophisticated. The thing is, the cost of selling your existing car for a newer model is a lot less than the cost of keeping the existing car and maintaining it over ten years or so. What’s worse is that you might not get a good return after waiting ten years to sell a car. In fact, you will probably be facing a loss.

But if you do sell your car at this mileage, there’s a good chance that you will earn a decent amount. You will also have an upper hand in negotiations. Moreover, if you have a newer model at your disposal, be sure to trade it for something better as you would get the most from this sale.

30,000-60,000 miles

Once you hit this bracket, you will have to go in for your first car service. Most likely, your mechanic or whoever is servicing your car will find some issues that need fixing. However, there’s no need to worry since they probably won’t be something major. Moreover, if you have bought it from a reputed manufacturer, you can be sure that nothing wrong here.

It’s a good idea to sell the car before crossing this mark. That’s because you won’t have to spend that much on replacement and repair. You will also get a good return because your car might not have crossed the five-year mark either.

60,000-100,000 miles

If you are looking to get the most from your motor vehicle, it’s a good idea to wait until you reach this benchmark. However, you can’t really expect to sell it for a really good price, although that’s not to say that you won’t make any money from it. Moreover, it is unlikely that your car will give up on you completely if you have had it serviced properly over the years. It is also crucial to remember that at this point, you will get your money’s worth because you would have utilized the car really well. However, it’s a good idea to trade it in for a better model.

100,000+

You might want to avoid taking your car to this point. That’s because this is the part where the car’s value drops and it won’t be as highly demanded by the consumers—even if it does run perfectly fine. When consumers are browsing online to look for used cars, they don’t go for cars that have 100,000 miles on them. That’s because they have a good reason to believe that such cars will require extensive repairs—thereby making it a very risky investment.

If you have a modern car, you should know that they only run for about 150,000 miles. After that, they aren’t good for anything and are sold for scrap parts. So if you want to get something out of your car, it’s best to sell it early to prevent a greater loss.

Minimizing Depreciation

If you want to get the most out of your car, you should protect it from depreciation. There are plenty of ways to do so. You can keep the car in a neat and good condition and keep the mileage down. In this way, it won’t be subjected to frequent wear and tear. You can also make sure that the servicing is done according to the requirement. You should also keep a service record and make sure you attend to any repairs and damages immediately.

Above all, be sure to buy your car from reliable manufacturers so that you don’t have to do worry about repairs, manufacturers, and excessive depreciation.

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Minimizing Depreciation

If you want to get the most out of your car, you should protect it from depreciation. There are plenty of ways to do so. You can keep the car in a neat and good condition and keep the mileage down. In this way, it won’t be subjected to frequent wear and tear. You can also make sure that the servicing is done according to the requirement. You should also keep a service record and make sure you attend to any repairs and damages immediately.

Above all, be sure to buy your car from reliable manufacturers so that you don’t have to do worry about repairs, manufacturers, and excessive depreciation.

What Future Buyers Will Look At

Every buyer is different and has a different concern, but these are the things commonly asked about and looked at by used car buyers, according to Kelly Blue Book:

Headlight condition: Cracked or foggy headlights are an immediate, obvious repair that seems to indicate that many parts of the car have been ignored.

Windshield cracks: If you’re trying to sell a car with a cracked windshield it will be difficult.

Brakes: People don’t want to immediately turn around and buy brake pads, so even though they’re a normal wear-and-tear part that will need to be replaced anyway, buyers will ask about how recent the brakes are.

Tires: It’s a very easy and visible test to check the tread wear of the tires.

Small dents, visible rust, and scratches in the paint: Blemishes are always a problem, and even though they’re not as indicative of major problems as one might think, they’re important to buyers.

The Most Preventable Damage to Your Car’s Value

An accident can really damage the value of your car, obviously, but that’s not something that’s preventable. These are the top preventable factors that lower your car’s value:

  • Spills and stains: Clean up messes immediately to prevent small spills from becoming stains, and put spillable items in a cup holder or on the floor.
  • Smells: Make a strong rule against having cigarettes and pets in your car.
  • Weather-related damage: Wax your car to prevent rust, and be careful of potholes.
  • Faded fabrics or sun-damaged dashboards: Park in the shade or a garage to prevent sun damage.

With these tips, maintaining a car will be easier than you think. Take the time to create good habits now and you may save hundreds of dollars down the road (literally)!

Murgado Automotive Group 25.76554, -80.20545.