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Put brakes on your car's depreciating value

By Steve Thompson, Contributing writer
Published On: Oct 26 2011 02:00:46 PM MDT
Updated On: Nov 11 2013 09:03:39 AM MST
man washing hood of SUV car

Bob Knight/SXC

Most people do not buy cars as investments, and for good reason. However, you can keep your car valuable by taking care of it, thinking of its resale value with every decision you make.

Depreciation often is the greatest expense incurred by drivers during the first five years of vehicle ownership, according to Kelley Blue Book. An average vehicle will only retain about 35 percent of its original value after a five-year ownership period, meaning that a $50,000 new car today will only be worth somewhere close to $17,500 after five years.

Cars begin to depreciate as soon as you drive away from the dealership, so try to maintain reasonable expectations.

You won't be able to keep your car as valuable as it was when you bought it, but the following tips will increase the money you receive from sale or trade-in ...

man doing oil change on car

No. 5: Keep maintenance records

If you want to keep your car valuable, purchase a 3-inch binder to store all your car's maintenance records. From oil changes to tire rotations to major repairs, keep the receipts and work descriptions in chronological order. This way, when someone wants to buy the car, you can show them how you have maintained it.

Also, make timely repairs so that problems do not escalate. If you notice a funny noise when you drive over 60 mph, or if fluid starts to leak from the undercarriage, take the vehicle to a trusted mechanic as soon as possible.

Some small problems can quickly escalate into much bigger problems if left alone long enough. If your car dies on the side of the road because of a maintenance issue you ignored, you can sure you've got more to worry about financially than just your resale value.

But even before you have to start worrying about maintenance, there are ways you can be saving yourself down the road ...

Cars at dealership

No. 4: Make smart buying choices

Sometimes the best way to ensure your car loses as little value as possible is to simply make smart choices when shopping.

"Choosing makes, models and options wisely now can help new-car shoppers keep additional money in their pocket down the road when they go to sell or trade in the vehicle used," said Kelley Blue Book's Jack R. Nerad.

That starts with choosing the right color. While you may love that exotic shade of purple, you might find it harder to move your car when it comes time to sell it. Instead, Nerad suggests choosing a popular exterior color such as silver, white, gray or black.

Car-buyers should also carefully choose the options on their new car to ensure they are customary for the vehicle type. For example, luxury sedans should have an automatic transmission instead of a manual transmission.

Popular equipment and options such as anti-lock brakes, alloy wheels, an audio system with MP3 compatibility, cruise control and remote locking also will help down the road, he said.

road trip, traveling in car, driving

No. 3: Remember: Aesthetics matter

The overall appearance of a vehicle will play a large part in keeping your car valuable. AutoTrader's Linda Payne recommends cleaning your vehicle regularly, making sure to vacuum the seats and upholstery and paying particular attention to the dashboard.

Run your vehicle through a car wash to keep it valuable, or clean it on your own driveway. Don't smoke in your car, because tobacco smoke will remain through many cleanings, and avoid transporting anything that might leak or stain.

"People want to buy a car that looks and smells like it's been taken care of properly," Payne said. "The thought process is that if you can't take the time to clean your car, then are you really going to take the time to have it serviced regularly as you should?"

But even though you want your car looking good, don't go too far in an attempt to make it stand out ...

closeup of red sports car

No. 2: Don't customize or go generic

One of the best ways to hurt your car's value is to customize. That stereo that requires rewiring and those funky rims might be expensive, but they will actually depreciate the value of your vehicle.

"Car-buyers should also recognize that the cost of some potentially expensive features like premium audio systems will be difficult to recover at trade-in or resale time," Nerad said. "The same holds true for 'custom' features and vibrant and/or less popular paint colors."

Furthermore, customizations will often void the warranty on a new car. The goal is to keep the car valuable in the same condition in which you bought it.

All-About-Car-Selection.com suggests that you can keep your car valuable by making repairs with brand name parts.

Not only does this adhere to the manufacturer's specifications, but also it will reduce the wear and tear on your car for resale. Although some generic parts might be just as good, pay a few extra dollars to keep your car valuable.

lineup of Ford pickup trucks on car dealership lot

No. 1: Park it

If you had your choice between two cars in comparable condition would you choose the one with 85,000 miles or the one with 45,000 miles? Chances are you would choose the one with lower mileage, even if it was a year older.

Keeping that in mind when using your car will help you recoup more money when you sell it or trade it in.

"The number of miles you drive you car contributes to the wear and tear on it -- inside and out," Payne said. "Not only is having low mileage a great selling point for a used car, your car will probably look a lot more attractive to buyers compared to other cars on the market made the same year."

Payne also recommends parking your car in a garage to protect its paint job from exterior wear and tear. If you don't have a garage, consider a car cover to protect your car from sunshine and inclement weather.

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