Depreciation Got You Depressed? Here’s How to Fight Back
Depreciation is the loss of an asset’s value over time. It is well known that brand new cars depreciate significantly as soon as they are driven off the dealer lot. We’ve put together this interesting infographic that illustrates how much value is lost, on average, during years one, three and five of ownership on a $25,000 car. Let’s just say it’s pretty shocking. And if that weren’t bad enough, Edmunds notes that after the 5-year mark, car values often “drop like a rock” due to wear and tear and anticipated maintenance and repairs.
Did you know that with biweekly payments on your auto loan you can build equity faster toward trade-in, save on interest payments and get out of debt a whole lot sooner? On a 5-year, $30,000 car loan at 3% with AutoPayPlus, you would have more than $1600 in improved equity position, you’d save almost $125 in interest and you’d be out of that 5-year loan 3 months early, which might help you trade in before your car value takes its second big depreciation hit.