Aside from your house, the cars you buy are the most valuable investments made during your lifetime. In fact, transport is one of the most expensive spending obligations facing UK families. With the high cost of motoring weighing on your budget, it’s important to consider ownership expenses and other concerns, before buying your next car.
Making a good investment isn’t always the first thing on car buyers’ minds. Naturally, appearance and performance have most of your attention when you’re test driving cars, but it’s also a good time to think about the financial aspects of a new car purchase.
Depreciation represents the value your car loses, from the day you buy it, until you ultimately part with the car. What many buyers don’t realise is that a large share of total depreciation occurs during the first few years of ownership. That means new car buyers see their vehicles value slashed dramatically, despite taking good care of their cars.
The rate of depreciation varies across makes and models, but Money Advice Service suggests most new cars depreciate by 15 to 35 per cent during the first year of ownership. Staggeringly, most cars continue to lose value, until they’ve depreciated by 50 per cent, or more, within 3 years of leaving the new car dealership.
While you can’t bring depreciation to a halt, you can choose to buy a pre-owned vehicle, which has already substantially depreciated, and won’t continue losing value at the same brisk pace. Or you can take these steps to slow depreciation on your new car purchase.
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- Keep mileage as low as possible/li>
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- Choose desirable options
If you’re fortunate enough to buy a new car, you needn’t concern yourself with the vehicle’s history. Instead, do research in advance, comparing cars and reading consumer reviews. Several reliable resources are available, providing feedback about various makes and models. Although your personal preferences weigh heavily on car buying decisions, input from other sources can help you make informed decisions at the dealership.
In addition to firsthand stories from actual owners, you can also get information about specific car models from consumer ratings sites and publications. Car magazines regularly conduct tests and review vehicle features, putting cars up against the standard in areas such as overall value, performance, durability, and other points of comparison. The data from these evaluations highlights cars that last longest and perform well under a variety of conditions – ultimately providing better value than cars prone to breakdowns and expensive repairs.
Vehicle History Records
The information age may have downsides, but instant access to vehicle history reports gives used car buyers a big advantage. Technology linking repair shops, vehicle registration, and sales records creates an electronic trail, tracking service and ownership records for pre-owned vehicles. With a few mouse clicks, prospective buyers can see exactly what a car has been through, including accidents, repairs, routine maintenance, sales, and owner registration.
Taking the time to review these comprehensive reports provides a glimpse into vehicle histories that past generations of buyers did without. Fortunately, you can use the data to steer clear of problem cars and to stretch your motoring budget.
The price you pay for a car and the cost of financing the purchase both have a prominent impact on your overall motoring costs. These expenses should be measured carefully before buying a car; you don’t want to make financial commitments beyond your means. As important as it is to anticipate how car payments will impact your finances, you must also consider additional motoring costs.
Among the spending required to keep you on the road, insurance payments can add a sizable sum to your motoring budget. For rates you can afford, without sacrificing the protection you need, compare car insurance online, using web resources to land the best policy pricing.
Car buyers have access to more helpful resources than ever before. Not only can shoppers search for cars online, but UK consumers can also compare finance and insurance options, before making costly commitments. If you’re in the market for personal transportation, use consumer reviews and vehicle history reports to select a reliable car, and don’t forget to account for costs such as insurance and depreciation when working out the price of your new car.