What to Know About Resale Values

Depreciation: the one thing that nearly all vehicles have in common. By the time that you reach the first intersection when you leave the dealership, you lose thousands of dollars worth of resale value on just about any new car that you drive.

If you only plan on keeping a new car for a few years before buying another one, you want to be sure that you get as much for it when you sell. If you plan on driving it for decades, it’s resale value is less relevant.

Before buying or leasing a new car or truck, it’s important to know what the resale value might be in a few years. Different vehicles lose value at different rates, for a number of reasons. On leased vehicles, if the residual value exceeds the manufacturer’s expectations when you leased it, you can actually earn money by keeping or selling it at the end of the term.

Buying Well

You’re probably thinking, "Certainly someone has researched pricing data and has come up with a list of which vehicles retain the most value", and you’d be right. Edmunds’ best vehicle lists can be an invaluable tool if you are in the market for a new car and are worried about resale value.

If you get an incredible deal on a vehicle, you probably think that you will do well when it comes time to sell. This isn’t always the case. The factors that allowed the discounts that you receive at purchase may also affect the price when you sell.

If a dealer is offering huge discount or rebates on a particular model, that may mean that they are having a hard time selling them. If no one wants to buy them when they are new, they probably won’t want to buy them used either. Many analysts say that you might as well subtract any rebate amount that you enjoyed when you first bought the car from what you’ll be able to sell it for later.

Factors Affecting a Vehicle’s Value

The National Automobile Dealers Association and Kelley Blue Book calculate values of used cars on the current market. These sites review a car's performance on the used market. The resale history of a particular model can be a valuable tool when making a new car purchase.

Some cars, like Toyotas and Hondas, are very reliable and pretty cheap to buy and fix. This reputation keeps their value up, making them easier to re-sell. More popular options. Like air conditioning and automatic transmissions also help resale values.

Even when you buy a used car, and then want to re-sell later, considerations should be made. Midrange, mainstream models are usually the safest bet. The very expensive, or exotic cars are harder to re-sell to the general public, and the cheaper, lightweight cars shake loose and wear out too soon. BMWs are solidly built and tend to retain their value very well. Make sure to check out market prices of any used car that you are interested in to be sure that you are getting it at a good price.

How to Preserve Value

If you do get a great deal on a great car, it’s up to you to keep the value up. The following tips can help you keep that resale value where it needs to be.

Don’ts:

  • Unusual paint colors - Neutral colors are better for resale. Trendy colors may not be as popular in a few years.
  • Eat in the car - Food and drink stains on the interior are ugly, and nobody wants that.
  • Extreme customizations - A better stereo will be okay, but not if you have to cut up the dash and door panels to install it.
  • Put off maintenance - Regular oil changes, for example, greatly increase the longevity of the engine. A new buyer doesn’t just want it to look good, it has to run well, too.
  • Smoking - Burns and nicotine stains are ugly, and the smoke stinks. Many potential buyers will refuse a car that was smoked in, no matter the cost.

Do’s:

  • Good records - A big stack of maintenance records, even for routine oil changes, impress a potential buyer. It eases their mind that it is a sound car.
  • Park in the shade - This will protect your plastics and fabrics from fading and oxidation over the years.
  • Park away from other cars, when possible - This will help prevent unwanted scratches and door dings. Fix any door dings quickly to prevent rusting.
  • Regular washes, inside and out - Dirt is very abrasive. It causes scratching of paint and plastics, as well as fraying fabrics.
  • Use protective products  - Protecting cloth with Scotchguard and paint with waxes can significantly increase their longevity.