If you’ve ever owned a car yourself, chances are you’re familiar with the term depreciation. Car depreciation is the rate that a car looses value over time, and it begins almost as soon as a vehicle is driven out of a dealership.
Purchasing a car is a big investment, and customers want to be sure they will have a car that is valuable both in the present and the future, especially if they plan on selling it later. It can be difficult to balance your selling points with the fact that the value of a new vehicle can drop by over 20% after the first year of ownership, something that any customer who’s done their research will know. Fortunately, however, depreciation isn’t all doom and gloom, and there are certain things you can let customers know if this is something they’re concerned about.
If you’re interested in a career in automotive sales, read on to find out what you should know about car depreciation.
Professionals in Automotive Sales Careers Know About These Common Depreciation Factors
There are many different factors that affect a car’s depreciation rate. Generally, five of the most significant influences on depreciation are:
- Mileage
- Condition
- Service history
- Reliability
- Features
Although depreciation rates can plateau after a certain amount of time, the more a vehicle is driven, the greater the depreciation rate can become. Older or high-mileage cars are often viewed as less valuable because their quality is then compared against every new model that is released afterwards. Similarly, a car bought in 1999, for example, has different technologies and features than the models on the lot today, and its features also influence its overall value based on how well they’ve aged.
Brand reputation and reliability can also affect depreciation. A car, as professionals in automotive sales careers surely know, is worth what the customer is willing to pay for it, and the quality—or perceived quality—of certain models also influences depreciation rates. Models that are low maintenance, for instance, may be attractive to customers and even second-hand buyers due to their reliability and need for less repairs.
You Can Help Customers Limit Their Vehicle’s Overall Depreciation
Your courses at an automotive training institute give you insight into the professional selling process, and you can use this knowledge to help make customers more confident about their car’s ability to maintain its value.
It seems self-defeating to recommend that customers limit the amount of kilometres they drive with their car, but it is a good idea to help them understand how mileage affects their car’s value, as routine wear and tear can depreciate it over time. A car that has been well-maintained with a strong service history can also keep its value a little better, so it’s important to highlight any low maintenance features.
Generally speaking, less is more when it comes to car features. Although they may seem cool or appealing, some car features such as power sunroofs, heated or cooled seats, and supercharged engines can have a short shelf life when it comes to depreciation, which means it can sometimes be best to focus on the classic features of the car you’re trying to sell rather than something that could be out of style by the next decade.
Are you interested in taking the next step into a rewarding career in automotive sales?
Contact Automotive Training Centres for more information about car sales training in Toronto.
