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Protecting a vehicle's value can be worthwhile if you hope to eventually sell it or trade it in for a new vehicle. Even if the sale or trade-in is way down the road, actions you take now can steer your car toward a potentially generous payoff. Follow these tips to get the most money for your vehicle when you hand over the keys.
How Depreciation Affects Your Car's Value
Unfortunately, you can't simply put the brakes on your car losing value over time. Even if you keep your car in pristine condition, depreciation happens because of normal wear and tear, along with factors such as the mileage put on the odometer. Dents, interior wear or major structural damage caused by an accident can accelerate depreciation.
A study published in 2020 by automotive research firm and vehicle marketplace iSeeCars.com showed the average depreciation rate for a new car was 49% following five years of ownership. That means a five-year-old car is now worth roughly half of what was paid for it, on average. But not every car depreciates at the same rate. The rate depends on the make, model, popularity, maintenance costs and other factors.
It's also worth noting that the value of a new car falls faster than that of a used car. New cars typically decline in value by more than 20% in their first year, and keep depreciating by roughly 10% each subsequent year. By the time the five-year mark rolls around, your car could be valued at about 50% of what you originally paid for it; depreciation tends to slow down at that point.
If you pamper your car, though, you might be able to stem how depreciation affects its value. That, in turn, can mean more money in your pocket when you're ready to sell or trade in your car.
How to Protect the Value of Your Vehicle
It's impossible to halt the aging of your car, but you can take steps to essentially reduce the speed of the aging from 80 mph down to a relaxed 55 mph. Here are some of those steps.
Maintain Your Car and Keep Records
Regular maintenance—such as oil changes, transmission fluid replacement, tire rotations and brake work—can help your car run better and retain more of its value. For newer cars, oil changes are typically recommended every 5,000 to 10,000 miles, and certain parts should be inspected or replaced at certain mileage intervals. Consult your vehicle's owner's manual to see how often certain maintenance should be performed. Some parts have service requirement cycles of 30,000 miles, 60,000 miles or 90,000 miles, for instance. If you're unsure, you could always bring your car to a trusted mechanic for a once-over.
Saving receipts from car washes, oil changes, tune-ups, tire rotations and other services demonstrates you've taken care of your car, according to vehicle valuation and automotive research company Kelley Blue Book. This kind of paper trail can help preserve the value of your car.
Drive Less
Keeping your yearly mileage below 10,000 miles puts less strain on your car, which reduces maintenance needs and could lessen the likelihood that your car will be damaged. The most recent data from the Federal Highway Administration indicates the average motorist drives 13,476 miles a year.
Take Care of the Interior and Exterior
When it comes to the value of your car, looks matter. Regularly cleaning the dashboard, seats carpet and other interior elements might help stall how much your car depreciates. As for the exterior, parking it in a garage can protect it from hail storms, sun damage and other outdoor elements. Regularly washing and waxing your car further protects the vehicle's paint from unsightly damage.
Drive Safely
Being careful on the road can help you avoid auto accidents, and prevent them from putting a big dent in the value of your car. A fender-bender, for instance, might cause the retail value of your car to drop by $500. More serious damage in a wreck may bump that figure to more than $2,000.
Say No to Smoking in Your Car
Cigarette smoke is difficult to remove or mask and can affect the overall value of a car, according to Kelley Blue Book. Therefore, it might be wise to ban smoking inside your car.
Don't Treat Your Car Like a Restaurant
Many of us chow down on fast-food burgers or gulp down coffee when we're driving or riding in a car. You might want to put a stop to in-the-car eating and drinking, though. Why? Because this activity can do long-term damage to your car in the form of hard-to-get-out stains and odors, which then can further lower the value of your vehicle.
The Bottom Line
Protecting the value of your car makes financial sense. By properly taking care of your car, you can drive up the chances of gaining more money for it when you're ready to sell or trade in your ride. If you're buying a new car, be sure to check your free Experian credit score before you shop for an auto loan.