Did you know that your car’s value can immediately drop by 15-20% the minute you take it out of the lot? Many buyers are shocked by the sudden drop in their car’s value. All cars depreciate, but some cars depreciate faster. While there is no way to stop depreciation completely, you can certainly slow it down by understanding how depreciation works in the UAE. By following some simple tried and tested tips put together by the experts at CarSwitch - the UAE’s first online platform for buying and selling certified used cars - you can tame the depreciation animal and save thousands of dirhams.
Depreciation is a big deal in the UAE
As a car owner in the UAE, you should be more concerned about depreciation than the cost of fuel, insurance and maintenance. People in the UAE only hang on to their cars for around three years. To put this into perspective, motorists in the USA keep their cars for more than 11 years. Owners in the UK, Australia, Asia and Africa also use their cars for much longer. Wondering why the age at which a car is sold matters? Cars lose most of their value in the first few years, which means that the longer you keep your car, the smaller your losses.
5 top tips to beat depreciation
Buying or selling is a car is a big financial decision. You will only be in a position to make a smart investment if you consider and understand the factors that drive down your car’s resale value. Remembering these 5 simple rules will get your there.
1. Brands really matter: In a short period of three years, your car’s depreciation can be as low as 30-40% or has high as 50-60%, depending on the make and model of your car. To help you in making a smart decision, CarSwitch gathered data from over 2,500 sellers and shortlisted makes that retain most of their value. Spoiler alert! Buying a Japanese car is the easiest and surest way to ensure good resale value.
2. Old is gold: Your car’s age plays a big role in determining your car’s resale value. Cars lose around 20-25% of their value in the first year and only 15 to 20% in the subsequent years. So, buy a slightly used car or keep your car for at least 3-5 years before considering an upgrade.
3. Service history is key: Here’s your chance to prove that you’ve kept your car in an excellent condition. Most buyers will ask you to share the car’s service history. Don’t forget to keep receipts for all service appointments.
4. Visual condition matters: Dubai’s hot weather and sand can wreak havoc on your car’s paint and dash. Park your car in a garage or keeping it covered. You should also get your car polished regularly to maintain its luster.