Saturday, June 22, 2024

How Much Does A Car Depreciate Per 1000 Miles

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Age Is A Lot More Than A Number

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Doug has a point. Nonetheless, well side with those claiming that age is more important still.

Probably the single most important reason is the incredible durability of most cars these days. As Consumer Reports state:

Not long ago, to keep a car running beyond the 200,000-mile mark would have seemed about as likely as driving it to the moon. But big improvements in powertrain technology, rust prevention, lubricants, and more have led to game-changing improvements in reliability and durability. Now, almost any car can make it well into six-figure territory with proper care.

Average Car Depreciation Rates After One Year

How much does a car depreciate when you drive it off the lot? You hear everybody talk about that and you assume that it must be so to some degree. But does anybody really know on average just how much? Well, yes, Edmunds research pegs the average car depreciation the minute you drive it off the lot reduces the True Market Value to 91%. Wow! That is a very expensive one minute ride.

Why is that? How can a vehicle depreciate so much, so quickly? It has to do with perception. Once the vehicle has been driven off the lot, others no longer perceive it as a new vehicle and it instantly loses 9% of its true market value on average. We are human beings and not everything we do is rational, and this is one of them. Feelings are feelings. But some feelings are more expensive than others.

So you would think that the immediate 9% average depreciation rate of cars right off the lot should just about do it for that first year, right? Wrong! The average True Market Value continues to plummet in the first year to 81% at the end of it. Of course, mileage is a factor and the less there are the better. And different makes and models can have decidedly varying results. We are addressing the average vehicle in this report.

Depreciation And Cost Of Ownership

The sneaky part about depreciation is that it isnt like making a monthly payment. You dont see the money going out the door the bill comes due when its time to trade in or sell your car. Any calculation of the cost of owning a vehicle should include depreciation, because thats likely to be the biggest chunk.

The total of what you pay for fuel, maintenance, repairs, your loan, insurance, and state registration fees is your operating cost. Adding in depreciation gives you your real long-term cost of ownership.

For example, if that SUV you paid $40,000 for five years ago is now worth only $16,000 as a trade-in, youd need to add that $24,000 difference to your operating costs over the past five years to discover the actual cost of ownership.

Sample Carfax Vehicle History Report

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What Cars Are Best For Depreciation And Depreciate The Least

Overall market trends are worth watching to see which manufacturers and models maintain high demand. For example, SUV and 4×4 models are in demand in the UK, and thats unlikely to radically change in the near future. And petrol-electric hybrids have strong residual values as car owners want the benefits of electric vehicles without range anxiety.

Combine that with a strong, desirable brand and its no surprise that some of the best-performing cars for depreciation include models from Porsche, Range Rover, and Mercedes.

On data alone, the likes of Ferrari and Bentley also make an appearance, but probably wont be in the budget of the typical UK car buyer.

If you do have enough to spend on a Porsche 911 GT3 or Range Rover Sport, then youd typically retain around 70% of the purchase price after 2-3 years. And a Porsche Cayenne, Macan or Panamera would be worth between 63-65% of what youd paid.

For those with a lower slightly more realistic budget, then the best brands to minimise depreciation would include MINI, Audi and VW.

Take for example the luxury Audi SQ7, it ticks both the brand and SUV boxes, and won various awards in 2018. Or you could try the sporty Audi RS3 quattro S tronic. For a different alternative, theres also the Jaguar E-Pace 2.0 2WD.

From VW, the enduring strong brand and performance of the Golf range means its hard to pick a bad one. And something similar is true with the MINI.

What Are Good Miles For A Used Car

Car Depreciation Calculator

What determines a high-mileage car? Theres no hard and fast rule. However, according to the United States Department of Transportations Federal Highway Administration 2019 data, the average car owner puts about 14,300 miles annually on their vehicle.

So for a car thats four years old, you might reasonably expect it to have around 57,200 miles. But its essential to consider how an owner drove the car, whether city, highway, or a mix of miles, and how well the driver cared for the car.

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Keep Your Cars Mileage Down

According to the United States Department of Transportation Federal Highway Administration, Americans drive around 13,500 miles per year.6 That breaks down to more than 1,000 miles every month!

Now, we dont expect everyone to bike to work every day . But there are definitely things you can do to cut down on the miles you drive. Try to knock out all your errands in one weekly trip or carpool to work a couple times a week with a coworker. If you frequently take long, cross-country road trips, consider putting those miles on a rental car instead. All those miles saved add up!

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What Affects How Fast A Car Will Depreciate

We listed many of the general factors for car depreciation above. But some factors are only apparent at a model or even specific trim level. For example, a widespread fault or manufacturer recall can have an effect on depreciation, even if the problem has been rectified correctly.

Other external factors can also have an impact on depreciation. The concern over diesel pollution and emissions scandals has led many to ask whether they should buy or sell a diesel car. The related concerns over anti-pollution taxes becoming more common in capital cities has changed demand for cars which minimise your commuting costs.

When you look at an individual car, then there are other factors to consider. Everything from the overall condition, to failed MOTs, known faults, or any modification and changes made to it can affect the cars depreciate rate.

Depreciation can vary on details including whether youve picked a car in a popular or unusual colour. Shades such as black, grey, and white are usually safe bets, but other choices can vary with current trends and fashion.

Picking the right trim level and options can also help. Investing in metallic paint, leather seats, and other options can help to maintain the value of a luxury executive car, but wont appeal to small, economy car buyers.

How Much Do You Charge Per Mile

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The standard mileage will be changed regularly to support the pace increase. Mileage rate for 2019 is 58 cents per mile For business purposes, philanthropy was 14 cents per mile when compared to 2018, the same as 2018, and 20 cents per mile for medical and mobile goals, compared with 18 cents in 2018.

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Cars That Depreciate The Least

The cars with lowest depreciation rates might really surprise you. Were actually very proud to say that according to, the best two vehicles that depreciate the least in 2018 are the Jeep Wrangler Unlimited and Jeep Wrangler, tied at only 27% after five years! The Jeep Wrangler rocks! The only other vehicle that approaches the Jeep Wrangler is the Toyota Tacoma at an impressive 29.5%.

Rounding out the list of best ten vehicles with lowest depreciation are in order:Toyota Tundra 37.1%Ram Ram Pickup Truck 1500 42.7%

If The Car Is Less Than 8 Months Old:

  • First, calculate a fair profit offer the same way I taught you for a regular car
  • Next see how many miles are on it and multiply by $0.20 to get the “Mileage Adjustment Factor”
  • Now multiply the number of months it has been on the lot by 0.015 and then by MSRP to get the “Age Adjustment Factor”
  • Take the price you got in Step 1 and subtract the amounts from Step’s 2 and 3 and this will be your offer – don’t pay a penny more
  • Here is an example of a car with a $20,000 MSRP that has 4,000 miles and has been on the lot for 4 months:

    • Fair Profit Offer – $16,800
    • Mileage Adjustment Factor – 4,000 x $0.20 = $800.00
    • Age Adjustment Factor – 4 x .015 x $20,000 = $1,200.00
    • Offer = $16,800 – $800 – $1,200 = $14,800

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    Is A Road Trip Worth The Wear And Tear On My Car

    Unless your car is very new, very poor on gas mileage or nearing the end of its life, than you will likely save money by driving your own car on a road trip. The wear and tear on your car will not decrease the value significantly if you keep up with regular maintenance. There are times when the risk outweighs the cost savings, and you need to know where to draw the line.

    If your road trip involves lots of night driving, or holiday driving when accidents are more common, you may end up with damage to your vehicle.

    If your trip involves lots of off road adventures, you may end up needing a tow and some repairs.

    These situations might warrant a rental.

    If your car gets poor gas mileage, a rental could save you hundreds. Also, creating the table above showed me that some cars cost quite a bit per mile!

    Whatever you choose, enjoy your trip guys!

    How To Keep Depreciation Low

    Why Do New Cars Depreciate So Fast?

    Were almost reached the end of our article. The information weve given you should help you arrive at a great choice when buying a car. When it comes to selling, meanwhile, it can be useful to keep a few things in mind.

    Firstly, there is nothing you can do to improve the age of your car. This means that youre going to get stung by deflation whatever you do. Also, trying to artificially limit your mileage defeats the purpose of owning a car in the first place.

    More realistically, what you can do is:

    • Buy a safe, reliable model. These tend to offer the best ratio of a decent purchase price and a reasonable depreciation.
    • Stick to the maintenance schedule: As mentioned, regular inspections can prevent bigger repairs from becoming necessary. If you document all scheduled inspections, this can significantly contribute to a better selling price.
    • Drive carefully and avoid accidents at all costs these are especially hard on the value of a second hand car.

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    Adjusting Prices According To Mileage

    Tue 17 May 2005 10:59 tamginelli
    What is the rule of thumb for adjusting a cars value if it is over the accepted average miles?Should a full history negate the need to do this?Cheers,TG–
    Tue 17 May 2005 11:29 blue_haddock
    There is no rule of thumb for this sort of thing – some cars are easier to sell with big mileages than other and even with a few miles under their belt they hold their value better.Someone recently posted on here about buying a 3 year old volvo with 80 odd thousand on the clock, a big car like that will cope with that sort of mileage but a 3 year old fiesta with that sort of mileage will be nowhere near as easy to sell or hold onto as much of it’s initial value.
    Tue 17 May 2005 12:52 Mapmaker
    blue_haddock wrote:…Isn’t it more that a big Volvo which is 3 years old has had a huge depreciation hit already, so a few extra miles makes little odds.On the other hand, a little Fiesta has a better resale value – people prefer running smaller cars. So the difference is more marked. A low mileage MINI might be worth almost as much as you paid for it…

    Car Depreciation Is A Phrase That Should Be Familiar To Anyone Whos Ever Tried To Buy Or Sell A Car

    Its the rate at which a vehicle loses its value over time, explains Ron Montoya, senior consumer advice editor for

    Ever hear the familiar expression that the minute you drive a new car off the lot, it drops in value? No lie. A car can lose 20% or more of its original value within the first year.

    The good news? After the first year, the depreciation rate typically levels out, Montoya says.

    Even so, fast-forward five years down the line and youre still looking at an average loss in value of about 60% from the original sticker price.

    We say average because the exact rate of your cars depreciation depends on the make, model and other factors. Lets look at the major factors that affect car depreciation and see if theres anything you can do to help your car retain its value.

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    How Much Does A Car Lose Per Kilometer

    Method #2: Amortization based Cost Per Mile According to the AAA report, medium cost The cost to own the car for the year 2018 was $8,849, of which 40% was attributed. to it is cheap. This research is based on over 15,000 kilometers of ward per This will be average depreciation year cost per mile US dollars .

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    • Using the standard mileage Rate pricing is a simple method
    • Here are the differences between a car allowance vs.

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    Age Of A Car: What You Need To Know

    When buying a used car, the age of the vehicle under consideration merits serious consideration, too. Used cars that are newer with low mileage might be well-positioned to provide long-lasting, reliable service.

    Its also interesting to note that according to IHS Markit, the average age of a car on U.S. roads hit 12.1 years old in 2020. Thats a new high as people hold on to their cars during the pandemic.

    When you review a vehicles service history and get a clear picture of how the car got used in its past, it will help you understand how well it will perform as it ages.

    A vehicle used for short- to medium-length commutes in stop-and-go traffic is bound to have taken on more wear than one that accumulated most of its miles on long highway trips. A vehicle with detailed service records showing that the used car seller routinely maintained it offers an advantage over those that dont deliver such care.

    When Is A Used Car Smarter Than A New Car

    When is a used car smarter than a new car? Lots of people have pondered this questionwith some good attempts at an answer. The total cost plot that weve established today makes it quite easy to answer. Thankfully, used cars are more trustworthy than they used to be.

    To keep variables consistent, Im going to look at a Subaru Outback. With a couple non-basic features, a new Outback sells for $30,000. Thats the average price tag we used earlier. But now we want to see if buying used is a better than buying new.

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    calculate cost Convince you electric Easy Car: 1. Find your current electricity bill as your electricity bill cost per Kilowatt hour. average price is $ per kWh that is cost We use the map below. * 2. Find your name electric The vehicle or vehicle manufacturer’s website is under the table for combat capability.

    The Following Steps Will Help You

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  • Make an appointment with your salespersonThese men and women work hard and many work on commission. If you liked the person who waited on you during your first visit, go back.
  • Put these pieces of information on a summary sheet or take your Vehicle Buyers Fact Sheet with you.
  • The wholesale value of your trade-in if youre trading.
  • Your available cash figure.
  • Your maximum offer on the one car you like.
  • Your maximum difference figure, if youre trading.
  • When you arrive at the dealership, ask to go to the salespersons office.You take the initiative you take control of the situation. Tell the salesperson you are definitely going to buy a car, but not necessarily from that dealership. Say there are other cars you like as well as this one. Why say this? To increase your bargaining power.
  • If you have a trade, ask to have it appraised.Do this before you discuss the new car at all. Keep the transactions separate. But beware: many dealerships will at first refuse to give you the true wholesale value of your car at any time. Theyll want to talk about allowance, a meaningless figure, or worse, may refuse to have your car appraised at all right then. If you run into a dealership that refuses to deal straight with you, find another dealership.
  • Agree on the amount the dealer will give you for your trade.
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