One of the major costs of owning a car is depreciation - the decrease of its value over time.
By thinking ahead, planning your purchase and taking care of your vehicle, you can help to protect its resale value, and in turn save yourself money.The projected resale value of your vehicle is also an important factor in determining an appropriate balloon payment (residual value) for your car finance. This in turn affects your monthly repayments and can be used to help you avoid unexpected suprises when it comes time to sell your car.
Retaining resale value begins when you buy.
Buying demonstrator or used vehicles is a good way to reduce that first big value drop as you drive away. If you have your heart set on a brand new vehicle, consider timing your purchase with model run-outs or end of year sales. Although resale value may be affected by the arrival of a new model or the actual age of a zero kilometre vehicle, the potential to save thousands up front is an attractive option for many.
Shop around for the best deal on your next vehicle. Drive away deals are one way for you to save on the initial purchase price of your new car - less spent, less to lose.
Alternatively, save yourself the hassle and see what a vehicle procurement service - or your stratton consultant - can do for you.
Reputation is everything
Your vehicle will have a higher resale value if it is sought after by used car buyers.
One major reason that used car buyers seek certain models over others is reputation. Choose brands and models known for quality and reliability for maximum resale value. Of course, the popularity of vehicle types and models can be affected by, for example, a rise in fuel prices or a massive recall that affects public confidence.
Current trends in the Australian market point to less demand for large vehicles and the increasing popularity of diesel and LPG fuels.
Make your options appealing
You may love your bright yellow paintwork and custom bodywork, but it can substantially reduce buyer interest in your car and ultimately its resale value. The high fashion colours change regularly - neutral and more traditional colours tend to hold their value better.
Similarly, you may not see stability control or aside airbags as a necessity, but desirable options can make your vehicle a much more attractive second hand proposition.
Caring for your vehicle
Your vehicle type and driving patterns may not be negotiable if driving is essential to your work, but car care is something you can take charge of.
Having your car serviced regularly (and keeping all the records as proof) is an important factor in the resale value of your car. Garaging your car and keeping the interior and exterior clean also contributes to the general condition, impression and resale value of your car.
Before you sell or trade in
Assess any minor damage to your vehicle and weigh up the cost of repairs against the potential loss of value and the number of buyers you might discourage.
It’s generally accepted that a better sales price can be gained by private sale, but make sure you factor in the possible costs of your time spent selling the car, time without a car between the sale and your next purchase and the cost of having two vehicles (insurance, finance, etc.) if you purchase before you sell.