Technology advancements have led to many advances in all industries, especially when it comes to cars; from the way they are manufactured to the quality of parts that are being put into them. Increase and development did have positive effects on this industry, but it seems that there is a trend of decreasing the values as the time passes by. Why is this so?
What has led to this?
This is a very crucial question and it seems that the answer is simple, yet complex at the same time. This means that when it comes to increasing in the loss of value that the thing to blame is the growth and development of technology and the amount of it that is being put into the cars. As the speed of technological advance increases and increases in the automobile industry follows we will have fast development of the new and improved cars with more and more features. This is from one side very good since the industry is keeping up with the advancements, but on the other hand, many new cars each year and increase in the number in the new models may lead to a faster decrease in the price if the last year model. This is a potential trap that many manufacturers are willingly falling into.
The increase in the production will lead to an increase in the supply and selling, and this is important for companies. Even if there is a loss in values and that loss is pretty fast, it seems like this trend is appreciated by the manufacturers.
What are the consequences?
There is a trend that smartphones are losing on their values very fast, right? And after one year, there is up to fifty percent loss in value on the market. It seems like cars might follow similar trends. It may not be as severe as in phones but the fear is real.
The older generations remember that, for example, radio in the car could be changed manually, so as there was a better version of it you could just get it out and replace the old one with the newest edition. Manufacturers nowadays do not allow this, since all those systems are integrated into the vehicle itself. This thing is exactly what people are assuming will be a consequence, and lead to an even faster decrease in values in the years to come.
Many will try to sell their vehicles faster and sooner leading to further increase in the market of new ones, and an increase in the speed depreciation in the old ones. The whole point behind it is to get some sort of a golden point between selling and buying as well as making sure that the car is still usable, and that we are not changing it just because there are few minor upgrades that are not essential for the driving of the car as well for its overall function.
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Can we fight it?
This is a very hard question, since many factors need to be involved in this, as well as the ones producing cars and their parts.
The car makers are giving a guarantee for the car and the technology in it, but in order to prevent depreciation, it is essential to make these parts changeable or upgradable. This can be the hardware of software patches or both, but it needs to be able to add a few more years of usage for the car.
In this manner we all need to cooperate and decrease depreciation of the technology in cars since it can be very costly on all parties to just invest in more and more vehicles without seeing the true potential of the ones already possessed. This will not only lead to exhaustion of the materials and funds on all parties, but it will as well lead to increasing in the junk we produce, leading to the increase in the pollution of the planet.
What does the future hold?
Some have speculated that we are approaching the time when the ownership of the car will be a thing of the past and that we will have an opportunity to rent cars at monthly rates instead of just owning one. Again the idea is in theory very applicable, and some of the well-known manufacturers of cars are testing this by letting their customers rent specific models and use them for a while. Of course, something like this is possible in the long run, but it will be hard to change the mentality of people and reassure them that this is a better option when compared to owning the vehicle. In addition, this will need to lead to a change in the way people behave towards cars and appreciate their true values.
As stated there are companies that are trying to include this as an option, and for now, this little experiment has proven to be successful. As this is being reconsidered, it is good to mention that something like this could have a very positive impact on the economy, as well as on the environment; especially if the vehicles that overtake the market will be the ones that are not using gas or any oil derivate, but clean energy.
As stated there are a few things that have led to the very fast depreciation of the cars. The predictions are that if there are no changes in the way we are handling this, the decrease in the values may be even steeper. The market is seeing the technological advances as both a good and the bad thing, and as the time pass by many manufacturers are seeing into what to do and how to improve the quality and decrease the possibility of parts getting old in a short period of time. This can be achieved by making parts removable or providing users with software updates, as well as changing the policy and keeping it all in renting rather than owning.