The Depreciation Factor In Cars
||By Anna Finger
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Car depreciation can occur in two ways: through a set of known factors, and through some economic factors, which can vary widely. As the old saying goes, "a new car depreciates
as soon as it is driven off the lot." This is a known factor of depreciation. Depreciation also applies to a car after it has been given repairs to the conclusion an
accident. A car that was involved in a major accident is always worth less than the exact same car that which was not damaged.
How much a car depreciates when it is driven off a lot depends on the car's demand-which is the economic factor. Hondas and Volvos are very popular due to its solid reputation
for its long lasting abilities, involving little to no repairs. Due to the fact there is a high demand for used Hondas and Volvos, their value does not fall too far or too.
However, it is not enough anymore to have a car which is valued for its reliability when there are other economic forces standing in its way. The Ford F150 is the most
popular truck in the United States, and has been for a couple of decades. However, the recent surge in gas prices has made even the F150 much less popular and its normally
solid resale value has plummeted. Three years ago, when the SUV market was at its peak, SUVs across the board depreciated very little. But as gas prices have gone up, their prices
have gone down, where now a used SUV can be had quite cheaply. However, small, fuel-efficient cars are having a surge of popularity, with some Hondas, several years old, selling
for nearly what it costs to buy one new. Some people may even find that their older, fuel-efficient car is selling for more now than it would have two or three years ago.
Another economic factor that affects a used cars' price is the demand for used cars in general. After 9/11, car manufacturers offered 0% interest on many new cars and there was a
great upswing in the purchase of a new car. In many cases, people who would have bought a used car bought a new car instead. The value of almost all used cars subsequently went
down. In general, when the economy is doing well, used cars have less value; when the economy is not doing well, used cars have more value. Most people in the United States cannot
function without a car, so it is the strength of the economy which determines whether people will splurge on a new car when their old one needs replacing, or whether they will be