The value of your car depreciates every year. In fact, it’s often said that a car depreciates in value the moment you drive it away from the dealership. If you drive your car a lot, or if it becomes damaged, you can expect it to depreciate in value pretty quickly.
What is Car Depreciation?
If you’re wondering how quickly cars depreciate, you first need to understand what depreciation is.
Car depreciation is when the value of your car goes down from the original price it was purchased at. Most cars lose value over time, resulting in a big difference between the price you paid for the car and the price you could sell the car for.
People usually consider depreciation by looking at the depreciation rate. This indicates how quickly the car is depreciating over time.
How Quickly Do Cars Depreciate?
According to Auto Express, you should generally expect a UK car to depreciate by around 15% each year over a period of 20 years. The rate of depreciation changes over time, with the first twelve months of car ownership usually showing the highest rate of depreciation.
However, even a new car will depreciate if you drive it a lot. You can always expect the value of your car to go down if it’s particularly worn or damaged.
Depreciation is usually most relevant when you are looking to sell your car. This is because a "used" or "second-hand" car is almost always sold at a lower price point than a brand new car. However, there are some situations where this won't be the case.
Some cars are in high-demand and won’t depreciate as quickly. Very rare cars may even go up in value over time! For most cars, though, the age is the biggest factor when it comes to how quickly the car will depreciate.
How Old is My Car?
If you bought your car second-hand, you might not know how old it is. The easiest way to check is by reading your car’s original number plate. With a current style UK number plate, the third and fourth characters of your registration will indicate the year that the car was first registered.
The second two characters on your registration will often be the last two numbers of the year it was registered. For example, if your registration says 18, then it was registered in 2018.
There are two ways these date indicators will appear on a current style plate, so if your registration doesn’t have an obvious year on it, use the following rules instead:
- A car registered in the 2000s will have a 5 as the third character
- A car registered in the 2010s will have 6 as the third character
- A car registered in the 2020s will have a 7 as the third character.
Put simply, find the number, and take away 50! Your plate may say 68 instead of 18 — but it was still registered in 2018.
With how quickly cars depreciate, many cars from 2018 have already depreciated in value by now. So, what can you do with them?
Can’t Sell? Scrap!
If your car has depreciated so much that it is no longer worth selling, you might want to consider scrapping it. This is particularly relevant if your car is damaged. Some old cars can’t be fixed because replacement parts are difficult or impossible to find.
You can get money for scrapping your car, without the hassle of trying to sell a car that has already greatly depreciated in value.
Get a free quote on the value of your car instantly! Click the button below to visit our homepage and use our checker tool.
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LEARN MORE: How Does Mileage Affect a Car?
