{"id":22173,"date":"2021-04-01T19:11:59","date_gmt":"2021-04-01T11:11:59","guid":{"rendered":"https:\/\/www.carsome.my\/news\/?p=22173"},"modified":"2024-04-23T11:06:35","modified_gmt":"2024-04-23T03:06:35","slug":"car-market-value-and-depreciation-rate","status":"publish","type":"post","link":"https:\/\/www.carsome.my\/news\/item\/car-market-value-and-depreciation-rate","title":{"rendered":"What is Your Car Market Value & its Depreciation Rate in Malaysia?"},"content":{"rendered":"

There are many factors to consider before deciding to buy a car besides the obvious purpose of driving from point A to point B safely. While you may also review the price, overall design, safety features, or its fuel consumption rate, there is one key factor that many overlook –\u00a0 the car\u2019s depreciation value, also known as the future car market value.\u00a0<\/span><\/p>\n

\"\"<\/p>\n

Knowing the depreciation rate of your soon-to-be car is important because it helps you estimate its value within the next five years. So, here is what you need to know about the depreciation rate, including factors that affect the car market value, how the estimate of your car\u2019s depreciation rate, as well as the estimated buyout price of popular cars that are sold to Carsome.<\/span><\/p>\n

What does the Depreciation Rate of a Car Mean?<\/b><\/h2>\n

The depreciation rate of a car refers to the difference between the original value of a car at the time of purchase and the final value at the time of sale of that car.\u00a0<\/span><\/p>\n

Usually, the declining market value of a car depends on its daily use (wear and tear). In other words, if a car is used regularly, the depreciation rate is higher and that lowers down the current market value of a car.\u00a0<\/span><\/p>\n

However, the depreciation rate of a car also varies depending on the car model, brand, and the year it was manufactured – typically, the average depreciation rate is around 15 to 35 percent in the first year, while it can hike up to 50 percent when it reaches its fifth year and above.<\/span><\/p>\n

For example: If you buy a Perodua Myvi for RM55,300 today, you will probably lose between 40 to 50 percent of its original value if you sell it in the next five years – this means you can sell it off for a price range between RM27,000 and RM33,000. This, of course, could fluctuate depending on your car\u2019s condition as well.\u00a0<\/span><\/p>\n

Meanwhile, according to automotive experts, selecting a car with a higher resale value is better (and more profitable) than selecting a fuel-efficient car. A medium-sized family car purchased three years ago may depreciate or lose an estimated RM12,559 off its original value today. Yet, the cost of petrol may cost more than this depreciation rate, based on a calculation of 12,000 miles per year, over a period of three years.\u00a0<\/span><\/p>\n

\"car<\/p>\n

10 Factors that Affect the Car Market Value<\/b><\/h3>\n

Here are some factors that can affect the depreciation of cars in the market:\u00a0<\/span><\/p>\n

    \n
  1. Mileage<\/b> \u2013 If a car is used regularly or if the mileage reading of a car is high, the higher the depreciation of the car.\u00a0 On average, the estimated mileage for a year is around 10,000 \u2013 12,000 km.<\/span><\/li>\n
  2. Reputation and Reliability<\/b> – Some models or brands have a certain reputation that makes them popular among buyers. Therefore, the reliability rate of a particular brand or model can affect the depreciation rate of a car. Cars with a bad reputation (eg: model recalls) have a potential of depreciating even faster.<\/span><\/li>\n
  3. Consumer\u2019s Choice<\/b> – Just like fashion trends, consumers\u2019 choice of cars also changes according to situation and circumstances. As seen from the current automotive trend, it focuses more on the usage of SUV-like vehicles such as Proton X70 and X50. Popular car models usually have a lower depreciation rate.<\/span><\/li>\n
  4. Number of Owners<\/b> \u2013 If a car has been sold or changed owners several times, this tends to affect the depreciation rate of that car.<\/span><\/li>\n
  5. Car Condition<\/b> – Certain damages to the vehicle\u2019s body, interior, and exterior features will also reduce the car market value.<\/span><\/li>\n
  6. Service History<\/b> \u2013 Maintenance or services<\/a><\/span> that are done regularly, or according to schedule ensures that the car is in good condition. This, in turn, slows down the depreciation rate of your car because it is maintained well. It is advised to keep records of the servicing schedule or receipts of expenses in the maintenance manual to show proof of proper maintenance.<\/span><\/li>\n
  7. Warranty Period<\/b> – Some car manufacturers offer a warranty period between five and seven years. A longer warranty period can indirectly be a bonus when selling your car.<\/span><\/li>\n
  8. Desirability <\/b>– Some car models offer a facelift version or an upgraded design every few years. So, if you purchase a recently upgraded car, the resale value of that car would be high as well.<\/span><\/li>\n
  9. Size<\/b> – Larger-sized cars tend to depreciate more compared to smaller-sized cars because they usually require larger maintenance costs (car servicing, spare parts) and expenses (fuel costs).<\/span><\/li>\n
  10. Fuel Efficiency <\/b>– Typically, cars with fuel-saving technology are offered at a higher price as they are more popular among used car buyers.<\/span><\/li>\n<\/ol>\n

    What is the Average Depreciation Rate of a Car?<\/b><\/h3>\n

    Although there are many factors that affect the depreciation rate, new cars generally depreciate faster than used cars regardless of the model or brand.\u00a0<\/span><\/p>\n

    Here is a generic car depreciation timeline:\u00a0<\/b><\/p>\n