The resale value of a car goes down slightly with every mile it’s driven. The decline in value doesn’t follow a straight line, though. There are certain mileage milestones that have a bigger impact on the value of a car, causing the price to temporarily take a steeper dive.
After it’s driven off the dealer’s lot and officially goes from new to used, there are three mileage milestones that affect the value of a car:
- 30,000 to 40,000 miles – There are a couple of reasons why the value of a car drops around this milestone. First, many cars have a full warranty which expires after 36,000 miles. Though some parts may remain under warranty after that point, the lack of full coverage makes the vehicle less attractive to used car buyers. Second, most cars have a recommended major service scheduled around that time. If a car’s almost due for this checkup, the value of the car will go down by roughly the anticipated cost of the service.
- 60,000 to 70,000 miles – The second major service is often scheduled for the 60,000-70,000 mile threshold. And this service often covers more items than the first. It may include flushing the transmission or coolant, replacing the belts and getting new brake pads or tires.
- 100,000 miles – The third major service usually occurs around 100,000 miles, and whatever warranty is still in effect will usually expire at that point. However, the biggest reason for the drop in value at 100,000 miles may be psychological: It just sounds like a lot of miles, and the extra digit in the mileage makes it look like a considerably bigger number.
The decreasing, variable resale value of a car is one reason why leasing makes more sense than buying. The residual value of a lease vehicle is contractually set at the beginning of the lease, and you can transfer out of or take over a lease at any time without the car’s value affecting the transaction. To learn more about the benefits of leasing and lease swapping, please contact us at Swapalease.com.
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