Vehicle depreciation: what it is and what it means for your vehicle

Have you ever purchased something only to sell it back several months or years later and you don’t get back quite what you paid for it? This is due to one word: depreciation. It’s a word that strikes fear into anyone who has ever traded their Clermont Toyota in or attempted to sell something and, unfortunately, it’s unavoidable. Vehicle depreciation is an integral part of the car buying process and can really affect your vehicle’s trade-in value when it comes time to getting into your next vehicle. If you’ve heard this term tossed around in and out of sales floors and finance offices but don’t really know what it is, today’s your lucky day. Toyota of Clermont is here to help make sense of all the confusing terminology with a guide on vehicle depreciation.

The ins and outs of vehicle depreciation

At most Clermont Toyota car dealerships, vehicle depreciation plays a big role in the return value you can expect to see when trading in your vehicle. While it applies to many different transaction types today, the history behind this term is very interesting. It all started in the 19^th century and with rail road companies, believe it or not. Essentially, depreciation was created to increase profit on paper for rail road companies. By decreasing the value of an asset (say, a rail car or engine) over time and matching that against the income and value of the company, one would see profit on paper.

Naturally, when it comes to your Clermont Toyota vehicle, vehicle depreciation was used to assess the overall use and consequential condition/quality of a car and what that does to the trade-in value. Typically, this is a negative value that decreases the overall worth of your used car when it’s being traded in. There are some exceptions to this rule, some Clermont Toyota vehicle owners may own a car that actually gains value over time, like a classic car, and experiences an appreciation value (think Toyota FJ Cruiser).

While a higher odometer reading and general wear and tear can contribute to the overall return value of your, vehicle depreciation can be affected by other factors like:

• Updating tech and new model year vehicles: the arrival of new model year vehicles is always great for drivers looking for a something new to get behind the wheel of, but that can spell trouble for drivers with older Clermont Toyota vehicles. Older vehicles become less desirable and lose value. The same happens when new technology is developed for vehicles.
• The vehicles perception to drivers: unfortunately, it’s always a popularity contest, even when it comes to your Clermont Toyota vehicle. If you’re driving a car that isn’t particularly desirable to other drivers, it’s likely to be more affected by vehicle depreciation.
• From the time you drive off the lot, your vehicle’s value goes down: while a particular Clermont Toyota car may have an affordable price tag, the truth is that you start out upside down when you sign on the dotted line. Once your vehicle gains an owner, vehicle depreciation brings the value down. Plus, when purchasing a vehicle, you have to pay for the tax, tag, title, and dealership fees in addition to the overall price. That’s money that you likely won’t get back from a trade in unless you wind up a vehicle that appreciates over time.

How to combat vehicle depreciation

Unfortunately, experiencing depreciation is inevitable. But you can lessen its affects by taking steps for your Clermont Toyota vehicle like:

• Drive your vehicle less than 10,000 miles per year.
• Stay up to date on routine maintenance.
• If your budget allows, purchase a vehicle with improved convenience and safety technology.

If you’re looking to trade in your vehicle, come to Toyota of Clermont! We’ll give you top dollar for your trade and get you behind the wheel of brand-new vehicle at a price you can afford. Give us a call at (352) 404 – 7000 for more details.