What I the best strategy for buying and selling cars regards depreciation

Looking for anyone in the trade really to answer this.

In my position I'm buying and selling cars with cash.

Last car I bought (very low mileage ) was last year and it was 5 years old then, thinking of keeping it for the next 3 years until the new model is 3 years old and then buying the new model but don't know should I sell before then (at what year does the depreciation take a massive hit? Even though most of it will have been in her first 3 years)

Car is a 5 series so the assumption is based on buying the same car over and over

If someone does low mileage should they actually be buying a high mileage 3 year old car as it will average out instead of a low mileage car..

Just wondering what is the best strategy for buying cars re depreciation and is cash even the best option, is PCP a better option?

I just always like the option of offloading the car for cash if something went tits up and not having outstanding finance on it

Thanks

User1998

Well the only way to avoid depreciation is to buy private, negotiate hard, change cars as often as possible, and avoid dealers. I have been doing this for 5 years and have paid pretty much €0 in depreciation. I’ve profited or broke even on almost every car I’ve owned, but I never keep a car for more than 12 months.

But if your buying cars that are 3 to 5 years old and changing them every few years its going to cost you a lot. A general rule of thumb is 50% depreciation every 3 years. So if you trade in every 3 years you will probably loose 50% each time. Assuming you buy from a dealer and trade in every time.

A lot of people got lucky during Covid when the value of their car had increased but that has well and truly ended now.

To answer the mileage question, I usually buy higher mileage cars because its easier on the wallet, and I’m a low mileage driver so I only add a few thousand kilometres to the clock.

MrMusician18

The rule of thumb is 50% every three years, so to limit depreciation, you buy older. The bumps and hiccups are when manufacturers refresh or change models, supply is constrained and pricing, as secondhand price expectation is benchmarked from new, generally.

If you generally do low mileage, you are probably better off initially with a slightly above average mileage when you buy. Mileage, like options, do not tend to impact pricing that much apart from when you cross the two particular thresholds of 100k kms and 160k kms, unless they are carrying multiple average annual kms over the expected for that year. A 2yo with 30k would only carry a small price premium over a 2yo with 50k for example.

The last thing is that there are unknowns out there. No one knows how the market is going to react to the low carbon transition which is expected to be well underway by the time you'll be changing.