Considering Resale Value

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Whether you like to trade in your car every few years or just want a better return on investment when you decide to sell, considering its resale value and depreciation should be at the top of your priority list.

Use this guide to learn more about the factors impacting resale value and how you can minimize the effects of depreciation.

Consider the Vehicle

Resale value is the amount of money your car will be worth when you decide to sell it. One factor most buyers fail to consider when buying a new vehicle is how much it will depreciate from the time you buy it to the time you decide to sell it.

While it might seem like you're getting a good price initially, if the vehicle you're purchasing doesn't have a good resale value, you will lose a good percentage of your investment.

A few resale value errors buyers commonly make when buying a car include:

  • Not doing enough research on similar vehicles.
  • Not determining resale value before the purchase.
  • Buying from a dealer with a poor reputation.
  • Choosing a car with a bad reputation among buyers.

Factors Impacting Resale Value

Other than choosing the right car, several other factors can affect your vehicle's resale value.

Some factors to consider include:

  • Geography—Certain body styles will be more popular in certain areas.
    • For example, the resale value of a convertible will be much lower in Wisconsin than Southern California.
  • Climate—Trucks and 4-wheel-drive vehicles have a higher resale value in colder parts of the country.
  • Color—Trendy colors such as yellow or neon green are harder to sell later on.
    • Stick to standard colors to improve the resale value of the vehicle.
  • Upgrades and options.
    • Some of the extra features that can increase your vehicle's resale value include:
      • Automatic transmissions.
      • Sunroofs.
      • CD changers.
      • Leather seats.
    • A few of the extra options that don't improve resale value include:
      • Upgraded stereos.
      • Navigation systems.
  • The current economy—Timing plays a factor in resale value. If the economy is down and gas prices are high, the resale value on an SUV will not be as high as when gas prices are low.
  • Supply and demand—Vehicles with low production numbers or brands that are widely recognized as being reliable will have a higher demand among used car buyers.
    • On the other hand, vehicles that had high production numbers and didn't sell well or that are known from breaking down will have a lower demand and be harder to sell, even if the vehicle is in good shape.

How to Improve Resale Value

While there are plenty of factors affecting resale value that you don't have any control over, there are several things you can do that will improve your vehicle's resale value.

These include:

  • Cleaning the interior and exterior of the vehicle regularly.
  • Parking in the shade when possible to protect the paint and interior.
  • Minimizing dings and scratches by parking away from other vehicles.
  • Completing routine maintenance such as oil changes and tune-ups.
  • Not smoking or eating in the car.

How to Calculate Resale Value

To determine the resale value of a vehicle you're preparing to buy or sell, here's what you'll need to do:

  • Gather all necessary information about your vehicle, including:
    • Make and model.
    • Mileage.
    • Overall condition.
    • List of any special features.
    • Engine size, transmission, and modifications.
  • Research online.
    • Look for similar vehicles online that are a comparable in:
      • Make and model.
      • Mileage.
      • Location of the country.
    • Once you find several vehicles for sale that are similar to yours and write down the price listings for each.
  • Add the prices of all the similar vehicles you found online and divide by the number of cars.
    • This will give you a basic resale value.
    • Compare this price to market value listings from Kelley Blue Book or other similar sites.