For just about any car or van buyer, the cost of depreciation is actually likely to be the biggest expense of them all. It can easily run into the thousands over just a few years, so anything you can do to limit it is a real bonus indeed. In the case of business vehicles, it can be even more important because you might be buying several of them, and you can’t often make the obvious choice of buying an old vehicle that has depreciated almost all the way already. Here are a few ways that you can limit that hit.
Buy Used
Yes, the most obvious one is to let someone else take those first few years of depreciation for you, so that you don’t lost too much when it comes to selling your vehicles on. There’s a certain art to this though, because there’s a reason cars depreciate. If you can purchase something that’s already depreciated a fair bit, but is still with a few years’ warranty, then this is the ideal sweet-spot. If you go too far you could end up with a car or van that costs you in repairs and maintenance. Time off the road can also cost you income too.
Leasing vs Buying
If you’re not selling the car when you get rid of it, then you’re not actually having to worry about depreciation, and this is the benefit of leasing. You pay a set monthly amount to have the use of your vehicles, and then give them back when the agreement is up. As you’re not actually paying for the car itself, the costs are generally lower, so this is a good, manageable and predictable way of avoiding the worry of depreciation entirely.
Know Your Cars
This is the hardest method of beating depreciation, but one of the most effective. Knowing which vehicles are most likely to lose the most value and when will mean you can make an informed choice. It can be a major difference between vehicles, so doing your research can really pay off. Car4Leasing have a good guide to the facts. Depreciation isn’t always linear either – there can be significant drop-offs after a certain number of years so again, it’s all about finding that sweet spot. Looking at previous generations of the cars you’re considering is a good way of working things out.
