A car is a depreciating asset, and the rate is of depreciation is higher in a new car than a used car. A new car depreciates by almost 15 per cent the moment you purchase it and drive it out the showroom. The year on year depreciation for a new car is between 10 -15 per cent depending on the make and model.
A new car depreciates almost 60 per cent in the first five years of ownership, the rate of depreciation can be higher in case of premium and luxury cars.
Factors influencing a used car’s resale value
· Year of registration.
· Popularity of make and models.
· Kilometers clocked (ODO meter reading).
· Overall condition.
When someone is looking to a buy or sell a used car, it doesn’t matter if the car was purchased in the first month of the calendar year or the last month of the calendar year. The resale value in terms of car’s age remains the same irrespective of the month it was registered.
Every passing year can add to depreciation, for example, let’s consider Maruti Swift registered in 2020 June. The car will be regarded as 1 year old on 1st January 2021. That adds up to almost 10% more deprecation to its resale value along with the initial depreciation. Hence it’s wise to sell a used before year-end as you can avoid on extra depreciation.
Most car models in India have got significant upgrades in terms of features and safety in comparison to cars that were sold two to three years ago. Evolving consumer preference towards a technology-led driving experience, most cars today come with better safety ratings, touchscreen infotainment system, connected car tech, Android Auto and Apple car play, panoramic sunroof, alloy wheels, heated seats, and so much more. These were limited to only premium cars in the good old days, but thanks to ever-growing technology, most of them have found their way to vehicles priced between Rs.6 to Rs.15 Lakhs (ex-showroom).
The entry of newer automakers like Kia, MG have taken the masses by storm, the Kia Sonet broke the record for all-time car sales in India in its first month. Also, the introduction of newer models of famous cars like i20, Thar, Brezza etc., has led to people selling their old ones to upgrade to a new car.
Car manufacturers have already announced plenty of exciting cars that are hitting the market in 2021. This means more choice to the new car buyer, and more pre-owned cars are likely to be sold in the used car market, which will impact the resale value of your old car.
According to market trends in India, there has been an increase of almost 25% in the pre-owned car sales of popular models like the Maruti Swift, Baleno, Hyundai i10 and Honda City. As 2020 comes to an end, many more used cars are expected to go on sale that might reduce your car’s resale value in 2021.
There is plenty of time left for 2021! You can sell any car in a single visit at CARS24 and get an assured best resale value. It can’t get any simpler than this, book an appointment to sell your car on cars24.com, you can choose to sell it at your nearest CARS24 branch or right at your doorstep in about an hour!