Porsche gets best Trade-in value

Tweet

When buying a new car, many people tend to forget that the value of the car will fluctuate rapidly within the first two years of ownership. This loss in value is commonly known as car depreciation and very few cars, if any at all, are immune to it.

Most of the time it’s difficult to assess exactly how much a car will depreciate because the figures are never really readily available. The TransUnion Auto Dealers’ Guide is probably the best way to assess car depreciation and is used by dealers to determine trade-in values.

IOLmotoring compiled a survey of 100 cars using the 2012 Edition of the TransUnion Auto Dealers Guide to assess car depreciation over a two year ownership period.  According to their survey, the Porsche 911 Carrera 4S PDK came out on top, retaining up to 84.19% of its value after two years. The Porsche Cayman S PDK retained 82.25% of its value while the Porsche Panamera S PDK retained 80.48% of its value over a two year period.

The worst performer was the Chevrolet Optra which retains only 60.94% of its value over two years.

For the full report click here.  

Buying a car you can afford

Tweet

Buying a car is by no means an easy task. It takes commitment, both personally and financially and requires patience and perseverance to find a car that suits you to the tee. Taking the time to research and read up on different cars can go a long way when trying to decide what car is right for you. Ultimately, money will play a pivotal role in your decision to buy a car and should be considered seriously before forking out thousands for your next ride.

How much should you spend on a car? The answer to this question may be different from person to person but a simple rule should apply, buy a car you can afford. Affordability is something every car buyer should consider. The decision to buy a car should, in theory, be based on your income, how much you earn and how much money you are able to spend on a monthly basis towards car payments. Your disposable income will reveal how much you are able to spend but it must be remembered that the rabbit hole goes a bit further than that.

Many people think that once they have bought a car, the buck stops there. Wrong. There is much more to consider. Buying a car is one thing, but owning a car is another. Car ownership encompasses many additional costs that need to be factored into what car you can afford. Things such as down-payment, interest rates, financing, insurance, maintenance, fuel and depreciation all add to the cost of owning a car and cant be ignored.

If you are considering buying a car, be sure to consider all the costs of owning a car before buying a car, doing this will hopefully result in buying a car that suits you perfectly without risking your financial security.  

Are you buying a new car or a used car?

Tweet The time has come, your car is rusted and falling apart, refusing to take you any further. The time you spent together was great but it may be time to move on and start scouting for a new companion to join you on your next adventure on the road. What's the next move?

Whether you are a first time car buyer or simply looking to replace your car, at some point the question will arise, should you buy a new car or a used car? Every car buyer is faced with this decision and it's not always an easy decision to make. Some people for instance will always buy a new car and get great pleasure from driving the latest models. Driving the newest, latest model is often considered to be a status symbol, showing the world that you have money and have reached a certain level of success. Other people though might not have the finances to secure a new car and therefore dabble in the used car market. Now there’s no right and wrong, people are just different and choose to spend their money in different ways.

In my humble opinion, the single factor that most people fail to consider when buying a car is depreciation. Depreciation is by far the biggest expense a car owner will endure. Like it or not, if you buy a new car today, tomorrow you will have lost thousands of Rands due to depreciation and you will continue to lose many more over the next few years. Many people might argue then that buying a new car is a waste of money. This might be so, but a new car has its advantages such as warranties, low maintenance, latest features and so on, but does this warrant buying a new car?

It may be in your best interest to find a two-year-old used car that’s in good condition with low mileage. The advantage is that as a car gets older it depreciates slower making a good used car more worthwhile in terms of depreciation, as the previous owner would have taken the biggest knock of the depreciation. It must also be remembered that used cars are also usually cheaper than new cars and are therefore a more affordable option for many people.

Ultimately, the decision lies with you and your financial situation.

Let’s debate this. What’s the better choice, a new car or a used car?  Drop your opinion in the comment box below. 

   

The Pain of Car Depreciation

Tweet At some point in most people’s lives comes a time to decide whether or not to buy a car. Buying your first car can be an exciting and rewarding experience and many people around the world derive great pleasure from buying and driving cars. For some, cars are an obsession and for others it’s simply a means of transport. Look a bit closer though, or at least from a financial perspective and the car of your dreams can quickly mutate into your worst financial nightmare.

If there's one word that makes any car buyer cringe, it’s depreciation, the devil thorn in every car buyer’s side. Now we know cars aren’t cheap to begin with, so when you fork out every last cent you have and drive your new car off the showroom floor, it’s worth a big chunk less than what you just paid for it. It’s true, depreciation can make you cry.

However, there is nothing you can do about it and your car will lose value over time, this is a fact. Cars are not an investment, they are more like parasites feeding off you as long as you choose to drive them.

The best you can do is to wipe your tears away and enjoy your car for what it's worth. It’s also a good idea to do some reading and find out more about how car depreciation affects the value of a car. The more knowledge you have the better equipped you will be when buying your next car.

Share your thoughts on car depreciation in the comment box below.