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Being in the vehicle business is a sensitive affair that requires the calculation of risks. As people buy new cars, they are concerned with the resale value ranging from a few years after the purchase to several years. Fleet management companies, especially those dealing with high-end services spend a lot of money to buy state-of-the-art vehicles but lose a lot of money when selling them or disposing of them.
Typically, the used vehicle market is unfair to car owners. For certain reasons, the rate of depreciation for vehicles has been expanding in recent years. If you are in a business that deals with vehicles, you should read this article to know the main reasons why the depreciation will rise even more in 2019.
More Vehicles Manufactured
In 2018, more people bought their first cars than in previous years. This number is expected to be on the rise this year. As a result of this, the manufacturers are now producing more vehicles than ever. This means that used cars are growing in number as well. Consequently, it is now easier to find someone who is willing to dispose of a used vehicle by selling it than in previous years. According to experts, this competition in used car sales has brought down the price of used cars and increased depreciation.
More Fleet Companies
Fleet owners are now spending more money to refresh their vehicles and add new ones. It is easy to find these vehicles being auctioned all over the internet at low prices. Fleet companies that are purchasing new vehicles want to sell their old vehicles as fast as possible to get money for other operations. Although these used vehicles have added features like GPS, dashcams and touchscreens that were bought and installed by reputable experts like like EyeRideOnline,the vehicles are expected to sell at lower prices than ever in 2019.
Recently, vehicle manufacturers have been making numerous changes to the vehicles. Surprisingly, the face-lifting of designs has everything to do with how vehicles depreciate. It is a no-brainer that people want to drive attractive vehicles that make them stand out on the road.
In 2020, over 60 percent of vehicle manufacturers are expected to change the designs of their popular models. Actually, most of them have offered a glimpse of how their next generation vehicles will look. According to analysts, many first-time car buyers would rather wait for one more year to buy these vehicles. This will cause more depreciation of used vehicles in 2019.
As manufacturers develop more sophisticated vehicle technology solutions, the previous models tend to depreciate at a high rate. According to the trend, there is always new technology that is being added to the newly released models. In this regard, no one wants to buy a used vehicle with few features to enjoy while the new ones have better options.
In 2019, the rate of depreciation of used vehicles will be on the rise as people chase the latest generation of vehicles. In fact, these latest vehicles are offering more and better features than ever.