Complete guide to car depreciation

What is depreciation on a car?

Vehicle depreciation is the rate at which a car’s value declines over time. When it’s time to sell or trade in your vehicle, depreciation affects how much money you may be able to get in return. This is where leasing a car from Nifti makes things a little easier. We calculate the expected depreciation of the vehicle, and you pay accordingly over the agreed term — no surprises. 

What is the annual depreciation on a car?

Depreciation begins as soon as you leave the dealership, and a car can lose 20% or more of its original value within the first twelve months. By the end of its fifth year, a car could lose up to 60% of its original value, depending on the make and model. 

What is the average rate of depreciation for a car?

On average, a car will lose 40% of its initial value in the first three years. To estimate how much value your car has lost, simply subtract the car’s current fair market value from its purchase price. From here, you can calculate a percentage of depreciation. 

What affects depreciation of a car?

Since your car’s depreciation rate is linked to its overall condition, you can take diligent care of your car to help maintain its value. Keep the exterior and interior in good shape, and make sure you adhere to the service intervals. The less mileage, the more the car will be worth in the long run. 

Can depreciation of a car be minimised?

If you want to reduce deprecation of your vehicle, consider choosing a car that tends to hold its value better. You can find out which cars have the best resale value by doing a little online search. Take cars from the same year of manufacturing and cross-reference the resale value in a number of vehicle categories. Most brands listed on Nifti will experience similar losses in value during the course of your lease term. 

Because Nifti owns the vehicle, however, you don’t need to be personally concerned with the car’s resale value when leasing. With Nifti, you simply pay the fixed monthly fee for using the vehicle, and we’ll look after the rest.

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