How Does Mileage Affect Car Value?

There are many things to take into consideration when calculating the value of your car. From the number of previous owners, physical condition of the car, the service history an owner has as well as how many miles the car has been driven. Understanding these factors will help to calculate how much your car has depreciated.

One of the biggest factors that affects the resale value of your car is mileage. If you were to value two identical cars with the same service history, condition, number of previous owners and requisite paperwork, but one has considerably higher mileage, the car with higher mileage will have a lower resale value.

This is due to ‘wear and tear’, and indicates there is a higher likelihood that the car will have technical issues in the future, as the gradual impact of those extra miles will inevitably take its toll on the vehicle.

Basic rule for calculating mileage-based depreciation.

Rather than looking at the exact mileage, you instead group vehicles into bands of 20,000 miles.

This works as follows:

Cars with less than 20,000 miles are the first category.
Cars with less than 40,000 miles make up the second.
The third group consists of cars with less than 60,000 miles etc

As soon as a car enters the next mileage band, it loses about 20% of its value.

An Example:

The UK's average annual car mileage can fluctuate year-on-year, but if your car exceeds this figure, it can lose value even quicker. Car mileage can be grouped into bands of 20,000 miles.

This is a convenient model for calculating car mileage depreciation, as each time a car passes through each band, it will lose on average around 20% of its current value.

A loose example would be a new car purchased for £20,000 and then sold a few years later with 40,000 miles on the mile counter. Based on mileage alone, the car would be worth around £12,800 at resale, its value having decreased from £20,000 to £16,000, then £16,000 to £12,800 (each a decrease of 20%).

However, it’s important to remember that car mileage is not the only thing that affects value, and during this period the car will have aged, plate changes will have occurred (at which point older models tend to lose resale value), cosmetic or functional damage may have occurred, as well as other possible factors that impact resale value.

You can get a free and accurate car valuation with us by simply entering the registration number and mileage of your vehicle on our site, which is a much quicker and simpler solution to calculating the value of your car yourself! Click here to value your car.

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