Why there’s 10-year rule in buying a new car?

Credit: Pixabay

By: MJ Gonzales | Executive Chronicles

House and lot or car? Second hand or brand new?  These are the few mind-boggling questions if you’re contemplating to get new one or urgently need of a decent vehicle.  To trim down your concerns, one popular tip to consider is the 10-year rule in buying a car.

Car can be either an asset or liability depending on how you use it. Aside from the huge mistakes such as not checking safety features and giving value to promos than the car itself, car should be something you use for good purpose. You don’t need one, if you only go in far places once a month or don’t have a parking lot.  In buying a vehicle, visualizing how you able to maximize it longer is vital.

If your concern is whether to purchase new or second-hand, your car should be very useful for you for at least ten years. This is a motivational rule so you analyze how and where you going to utilize your vehicle so every cent of it is worthy.  Apart from this, the 10-year rule it has something to do with depreciation. Remember that the value of a car decreases by 11 percent as soon as you drive it away from the dealer’s place going to your home.

According to Trusted Choice, the newer car depreciates aggressively compare to pre-owned.  If you use it for a year its depreciation value goes up to 19 to 25 percent, 46 percent in three years, and 63 percent in five years.  However if you’re able to use for ten years, then depreciation doesn’t matter anymore as you maximize already your vehicle’s full potential.

Credit: Pixabay
Credit: Pixabay

“In general, popular cars are easier to sell as used vehicles. In this case, depreciation rates will be slower than cars that are difficult to sell. Some vehicles just never seem to catch on, though they maybe great cars with fantastic features. A fast depreciation rate does not necessarily reflect on the reliability or performance of the car,” Trusted Choice’s tip.