Used Car Values

By Hanna Nilson
 

Calculating your used car values can be tricky. For example, did you know that the very moment you drive a brand new car off the lot; it already begins loosing hundreds or even thousands of dollars in value? This is because car depreciation is one of the greatest factors in determining used car values. In any case, buying a car is a financial drain. So if you spend smart, you may find yourself saving lots of money over time.

Used vehicles are often some of the best values you'll find because you avoid the biggest expense associated with used car values - depreciation. For example, a brand new Lexus ES 300 is a safe and reliable vehicle that typically costs $40,000. However, a 2002 - 2006 make of this same used car values from anything between $9,000 to $20,000. Obviously, there is no absolute way to assume across-the-board savings, because every used car is different. Depending on the mileage, maintenance and/or any vehicle damage, your used car values may be significantly higher or lower. In fact, it’s been proven that the average used car loses 65% of its value after the first 5 years. In addition to maintenance, repairs, interest on the loan and insurance expenses, you can see used car values quickly deplete and turn into an enormous disbursement.

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Although used car values do eventually depreciate over time, they don't suffer the same huge drop in value that most new vehicles do when they drive off the car dealership lot. SafeCarGuide.com says, “A stabilized rate of depreciation (7% - 12% per year) makes used cars a better value than new ones. New vehicles lose an average of 20% of their value the instant they are driven away from the dealership. When coupled to the average yearly depreciation of 7% to 12%, your first year’s loss is anywhere from 25% to 35%. That translates to a first year $6,000 to $8,000 loss on a $22,500 new vehicle, or a $10,000 to $15,000 loss on a $40,000 one. And that’s for a vehicle only driven the average 13,500 miles. If you drive more than that, your depreciation will be greater (35% to 50% for the first year).” These numbers are quite significant because they can either make or break your overall automotive vehicle investment. If manipulated correctly these rates could be utilized as an advantage for the value of your used car.

Some initial information to consider when trying to verify used car values are the used car year, make, model and style or trim. Also, it helps to be realistic about the condition of the car. If there has been any damage or accidents, this might considerable reduce your used car value.  Researching your used car values by using sites such as CarFax.com or KBB.com may also help establish a more accurate estimate. These are only a couple of suggested sites to check out, but there are literally thousands of options for determining your used car values. Using such resources for calculating your used car values will help compare pricing for your vehicle of interest.

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