You’ve no doubt heard that a new car loses thousands of dollars in value the moment you drive it off the lot. In fact, it is rumored that the loss could be as much as a third of overall value. This may not be quite accurate, but once you sign on the dotted line and take ownership of the vehicle, there’s no denying that it automatically becomes worth a little less (because it can only be resold with the caveat that it’s had a previous owner). So before you go into debt to purchase a new car, you might want to consider that there are other options (certified pre-owned vehicles, for example). And knowing the facts about depreciation could just help you to make an informed decision. Here are a few tidbits you might not be aware of.
Accidents are a major cause of depreciation. When it comes to accidents, most people seem to be under the impression that as long as there is no frame damage and their vehicle is restored to original condition they won’t see any additional depreciation. Sadly, this is not true, especially with websites like Carfax that let anyone see your car’s history. The truth is that if all things are equal, a car that has a clean history is going to be worth more when it comes to resale.