When you go to buy a car, you probably aren’t thinking about selling it! However, if you like to trade-in your cars regularly, or if you like to drive the latest or most efficient models, you will likely end up selling your used car eventually, and considering resale value before you buy is infinitely helpful.
What Is Resale Value and Why Should I Consider It?
Resale value is how much your car will be worth when you sell it. Resale value is affected by the depreciation of the vehicle as it loses value with time and use. Even if you get a great deal on a car initially, if you can’t make a profit when you go to resell it, you’re still losing money.
Tips for Buying a Car with a Good Resale Value:
- Do your research on similar vehicles to determine the selling price and the resale value
- Purchase a car from a reputable institution, whether a dealership or a private seller
- Choose a car that has a consistent market (i.e. a car that retains its value in that it is always selling on the market)
What Factors Impact Resale Value?
- Climate and Location: If you’re in a warm location, chances are that your convertible will have a high resale value. The same is true of 4-wheel drive cars in colder climates.
- Color: It may be shallow, but color affects resale value. Lime green and orange cars are harder to sell than red, white, black, or silver cars.
- Modifications and Special Features, such as:
- Heated or leather seats
- Automatic transmissions
- CD changers
Unfortunately, neither upgraded radios/stereos nor GPS systems will improve resale value!
- Supply and Demand: Cars known for being reliable and that are difficult to find on the market will have a higher resale value, and the opposite is true for brands that buyers don’t trust or can easily find.
- The Economy: When the economy is bad and gas prices soar, it may be that sleek and new but gas-inefficient cars are difficult to sell, and vice versa.
Can I Improve the Resale Value of My Car?
Absolutely. You can…
- Keep your car clean
- Keep your car well-maintained
- Minimize damage and vandalism by parking away from other cars in well-lit areas and obeying road signs and traffic laws to avoid accidents and fender benders
- Not smoke or eat in your car
How Do I Calculate the Resale Value of My Car?
First, you’ll need to gather information about your car and then research online the selling price of similar cars. Consider your car’s:
- Make, model, year
- Fuel efficiency
- Special features
- Engine size and transmission
Make a list of what cars with similar features to yours are selling for in your area. The average of these numbers is likely a good estimate of the car’s resale value. You can also take advantage of several websites that will estimate your car’s value, such as the Kelley Blue Book, or Autotrader.com.