How to reduce your car’s depreciation

Check out these eight top tips to beat car depreciation and help your car hold its value.

Most people know that as soon as you drive your new car off the dealer’s showroom floor, it loses a big chunk of its value straight away. It then continues to steadily lose value each year it’s on the road, and it’s not uncommon for cars to halve in value after just three years.

Depreciation is one of the biggest costs of car ownership and can even have a more significant impact on your wallet than your fuel, rego and maintenance costs. But while depreciation is an unavoidable part of owning a car, there’s still plenty you can do to limit its effect. Here are eight great tips on how to beat car depreciation.

1. Choose the right make and model

If you want your car to maintain its value as much as possible, it’s crucial to choose a popular make and model. If a dealer knows they won’t have any trouble selling your car to another buyer, they’ll be happy to offer you a better price when you trade it in.

This means you should try to select a vehicle that has good fuel economy, low running costs and a reputation for reliability. For example, brands that regularly top reliability surveys, such as Toyota, will tend to have higher resale values than others that can’t boast the same track record for quality.

It’s also worth remembering that if the model you want to buy is about to be replaced in the manufacturer’s line-up, this can drive its resale value down substantially.

2. Research resale values

Want to know how much your car will be worth in three or five years’ time? Start researching resale values through a car valuation service such as RedBook, which offers a “Future Valuation” option to help you work out how much your vehicle will be worth in one, two, three, four and five years.

Many motoring organisations around Australia, such as the NRMA, include depreciation in their car operating costs or car running costs surveys. Use this data to find the makes and models most likely to hold their value in the future.

3. Choose the right colour

Believe it or not, the colour of your new car can have a huge impact on how much its value will depreciate in the coming years. White, black, silver and grey cars are always popular and therefore better at maintaining value, while you might find it harder to find a buyer for your fluoro orange pride and joy. Keep this in mind if you’re ever toying with the idea of a bold new paint job for your vehicle.


4. Stay on top of maintenance

Used car buyers want to purchase a vehicle that has been looked after and treated right over the years, not one that has been neglected or thrashed almost to the breaking point. With this in mind, it’s a good idea to get your car serviced at the manufacturer’s recommended service intervals. Make sure you enter each service in the logbook and that you keep your receipts. This could be crucial if you want to fetch a higher price when you decide to sell your car.

The same goes for any repairs to carpark dings and scratches. Dents, scuffs and scratches can make any car look like a questionable purchase, regardless of how mechanically sound it may be, so get these patched up before you sell.

5. Keep the mileage down

The more a car is driven, the more chance there is for something to go wrong or some sort of mechanical issue to develop. By keeping your kilometres as low as possible, you can go a long way to minimising the effects of depreciation. Of course, keeping the mileage down may not always be possible in your circumstances, but it’s worth remembering that a maxed-out odometer can have a big impact on resale value.

6. Avoid non-standard modifications

Got a great idea regarding how you can improve your car, such as turbocharging the engine or taking up all your boot space with the most elaborate sound system known to man? Think twice before you make any non-standard modifications to your vehicle; while they might make the vehicle just right for you, that doesn’t mean they’ll make it an attractive purchase for prospective buyers in the future.

7. Keep it clean

Have you ever hopped into someone else’s car and been overpowered by the smell of stale cigarette smoke? Is the inside of your vehicle infused with the essence of “wet dog” after all those beach trips with Fido? If your car is home to strong and unpleasant odours, don’t expect it to fetch a high price when the time comes to sell.

From regular vacuuming to the liberal use of odour removers, keeping your car clean and fresh is essential. You will help your resale value if you avoid smoking, eating and drinking in your car as well.

Frequent trips to the car wash can also pay off, as can parking your set of wheels somewhere it’s protected from the elements. This will ensure that your vehicle looks clean and as good as new, plus it creates the impression of a well-maintained vehicle, which will help you fetch a higher price from buyers.

8. Get the best deal when you buy

When you’re shopping for a new car, chances are you’re not thinking about depreciation or how much you’ll get when you sell it in a few years, but you should be. The effect of depreciation can see your car’s value quickly drop by thousands of even tens of thousands of dollars, which can be pretty hard to swallow if you paid top dollar for your vehicle.

The best way to beat depreciation is to get the best possible deal when you buy your new car in the first place. Drive a hard bargain, haggle on the price and take advantage of drive-away deals to ensure value for money. If you save thousands on your new car, the rate of depreciation will be much easier to live with in the coming years.

Compare the new car finance options below

Updated August 23rd, 2019
Name Product Interest Rate (p.a.) Comparison Rate (p.a.) Min Loan Amount Loan Term Application Fee Monthly Service Fee Monthly Repayment
5.49% (fixed)
1 to 7 years
Borrow as little as $2,000 at a competitive fixed rate
Finance a new car up to two years old. Competitive 5.99% p.a. rate available to all approved applicants.
6.99% (fixed)
1 to 7 years
Finance a range of vehicles including cars, motorbikes, boats and caravans.
Apply online to finance a new or used motor vehicle and receive a response in 90 seconds. You will receive a competitive tailored rate of between 6.99% p.a. to p.a.
From 4.99% (fixed)
3 to 5 years
Optional balloon payment available to reduce your repayments.
A competitive rate car loan suitable for a new cor used car.
From 5.34% (fixed)
1 to 7 years
$459.20 (for private seller vehicles this fee is $608)
Fixed or variable rates starting from 5.34% p.a.
Apply for up to $150,000 and have up to 7 year(s) to repay. You can use cash or trade in a vehicle to use as a deposit.
From 5.69% (fixed)
1 to 7 years
Benefit from 5-hour pre-approval.
A competitive rate car loan from RACV with no monthly fees.
5.69% (fixed)
1 to 7 years
Offset your interest with a Car Budget Account.
Take advantage of a competitive rate, pre-approval and no early repayment fees when you finance a car under two years old.
8.49% (fixed)
1 to 7 years
Use a new or used car as security.
A flexible loan thats lets you benefit from a car search tool as well as the option to borrow extra for on-road costs.
From 8.49% (fixed)
1 to 5 years
You'll receive a fixed rate from 8.49% p.a. based on the value of your car
Get a competitive rate and apply for a larger loan up to $80,000 when you attach a new or used car as security to the loan.
From 5.71% (fixed)
1 to 7 years
$100 (from $100 to $500)
You'll receive a fixed rate between 5.71% p.a. and 8.66% p.a. based on your personal credit history
A flexible loan to help you finance a car, motorbike or boat up to five years old.
6.79% (fixed)
1 to 7 years
$265 ($175 Establishment Fee + $90 Security Administration Fee)
Finance a new or used vehicle up to 7 years old.
Benefit from additional repayments, no ongoing fees and access to a redraw facility with this competitive loan from CUA.
From 7.99% (variable)
1 to 10 years
Your choice between secured or unsecured.
Apply for a loan up to $75,000 and benefit from loan terms up to 10 years.
6.45% (variable)
1 to 7 years
Apply for a loan up to $100,000.
Benefit from a flexible, variable rate to finance a car up to 3 years old with SCU.
From 5.69% (fixed)
1 to 7 years
You'll receive a fixed rate from 5.69% p. a.
Purchase a new car with this loan and benefit from a fixed rate and no monthly fees. Pre-approval available within 5 business hours.
6.69% (fixed)
1 to 5 years
Secure this loan with a car and use the funds for any purpose.
Competitive 6.89% p.a. rate available to all approved applicants. Loan amounts up to $60,000 available.
From 6.99% (fixed)
1 to 7 years
You'll receive a fixed rate from 6.99% p.a.
Finance a used car with NRMA and benefit from a fixed rate term and no monthly fees. Pre-approval available within 5 business hours.
From 4.79% (fixed)
1 to 7 years
You'll receive a fixed rate of 4.79% p.a. with a comparison rate of 5.34% p.a.
Get access to over 20 providers to fund a new or used car.

Compare up to 4 providers

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Logo for IMB New Car Loan
IMB New Car Loan

You'll receive a fixed rate of 5.49% p.a.
A low minimum borrowing amount of $2,000 that you can use to purchase a new car or one up to two years old.

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Latitude New and Used Car Loan

You'll receive a fixed rate of 6.99% p.a.
Apply for a loan from $5,000 to finance a new or used car. Flexible repayments and options to finance a classic car.

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RACV New Car Loans

You'll receive a fixed rate from 5.69% p.a.
A larger loan of $5,000 or more to help you buy a new or used car. 5-hour pre approval available and no ongoing fees. Note: Product only available to residents of Victoria.

Logo for Stratton Finance New Car Loan
Stratton Finance New Car Loan

You'll receive a fixed or variable rate depending on the lender you are approved with
Apply for up to $150,000 and use cash or trade in a vehicle to use as a deposit. Optional balloon payment available.

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