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Understanding Depreciation And How It Affects Ohio Car Title Loans
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Thinking about buying a new car? If so, don't forget to consider how fast the car will depreciate, or lose value, if you have ever taken out Ohio car title loans in the past, plan to in the future or plan to sell the car at some point. You may be surprised just how quickly some cars lose their value, with some models depreciating faster than others.
When you buy a new car, it loses value automatically as soon as it leaves the lot, even with just a single mile on the odometer. This is because the car is now considered used, not new, and most cars lose 11% of their value as soon as you drive them.
Now fast forward three years, after you've put an average of 15,000 miles on the car every year. At this point, the car will have lost 42% of its value, on average. Two years later and most cars have lost 63% of their value. This is definitely important to keep in mind if you plan to apply for Cincinnati car title loans at some point.
If you apply for Cincinnati car title loans once you pay off the car loan, you will only get to borrow a certain amount of money. If you bought your car for $20,000 new and it took you 5 years to pay off your loan, it's now worth just $7,400. Of course, Ohio car title loans will not be for this full value, but rather a percentage. This same is true with most secured loans as the lender must protect itself somehow. You'll need to be realistic about how much you expect to receive.
The speed at which your car depreciates also depends on its model, as demand and inventory will determine the value. According to Consumer Reports, more affordable cars retain their value better than higher-priced sports and luxury cars. Of the top 10 cars rated to hold their value the best, all were Japanese or European models, while the bottom 10 cars were domestic models.
If you want to apply for Columbus car title loans, you'll do better if you purchased an affordable car rather than something luxurious. This is because most people consider cost over luxury during these rough economic times, and vehicles that were never economical do not hold their value. Consumer Reports also found that baseline models retain value better over 3-5 years.
Did you know even the color of your car can affect its value? Silver, white and black cars are the best choice as they are more popular. While lenders who offer Columbus car title loans probably won't consider your car's color to determine your loan amount, this will affect you when you try to sell the car on your own down the line.
Finally, taking care of your car will help it retain its value. Follow the manufacturer's recommended maintenance schedule and keep receipts as proof, make sure the inside of your car is kept clean with no smoking inside and repair dents and dings. This will help you get the most money when you need to turn to title loans, or sell the car yourself at some point.
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