Factors that Impact the Resale Value of Used Cars

Understanding Factors Impacting the Resale Value of a Car

Thousands or perhaps lakhs of used cars are sold every year. There are several factors that you need to consider while buying or selling pre-owned cars. These are the factors anyone who is looking to purchase or sell used cars need to know in order to close a good or at least a fair deal.

Several factors will affect the value of your car including the condition of the car, mileage, colour of the car and your location.

Customizations and personalizing your car can affect the value of the same. Not everyone has the same taste/likes in modifications and trends change with time.

Additional Factors that Affect the Value of a Car

Economic Condition

The value of a used car greatly depends on the economic condition of the region you are staying in. The economy of your country and your state, inflation, deflation, laws in the region you reside in and so on affect the resale value of the car when you are trying to sell it. This not only affects the value of your used car alone, but also the overall state of the used car market.

The Make of Your Car

Yes, the make and brand of your used car will have an effect on the resale value of the car. Cars with the best resale value in India are from Maruti Suzuki. Some brands and makes have better reputation for durability. However, they do not necessarily have to give you good resale value. For instance, Audi and BMW are well known for their durability and quality, but are simultaneously criticized for their poor resale value.

Vehicle Body Style and Class

Simply put, you should know what kind of car works where. Convertibles and sports cars sell best in regions with warm climates whereas rugged SUVs sell best in places with rough terrains. You will find a significant difference in the resale value of a car based on its body type – whether it is a hatchback, a sedan, an SUV, or a coupe.

Fuel Efficiency

This is another key factor that is considered while purchasing a vehicle especially in a country like India. Cars with better fuel efficiency sell faster and at a better price than cars with less efficiency. People do not want to buy expensive cars and burn their pockets fueling the same – especially when it comes to second-hand cars.

Mileage

One of the major elements you will consider as you buy or sell a used car is how much it is driven and used. The more the number of kilometers driven, the lesser the resale value. One of the many ways to maintain the value of your car is to drive it less!

Transmission

This is again one key factor that affects the resale value of your used car. Despite manual cars with gears are more fuel efficient than automatic cars, they are usually detrimental to resale value. Since a lot many people are opting for automatic transmission while buying cars because of sheer convenience, manual cars lose out on their resale value.

The Exteriors

In simple terms, any dents, scratches, chips, crumples, and visible rust reduces the overall appeal of the car to potential buyers. These exterior conditions affect the resale value of the car. Anyone would want a spotless car, even if it is used!

The Interiors

Of course! Apart from the exteriors, the interiors play a significant role in the resale value too. It is advisable to thoroughly vacuum the car, arrest any odour, clean the dash board, the interior panel and the vents of the AC, and invest in new floor mats before listing the car for sale. The inside of a car is crucial for the convenience in driving and riding in the car. The seats and the seat-covers also must be taken into account while selling used car.

Mechanical Wear and Tear

The logic is that if your car has any mechanical wear and tear that needs to be addressed, it must be done so by you or must be told to the potential buyer beforehand. If the cost of repairing the fault costs you Rs 2000, then Rs 2000 must be deducted from the overall cost of the car. This is how it works. Poorly maintained cars depreciate faster than neatly maintained cars. It is therefore important to regularly service and maintain the upkeep of the car.

History of Accidents

Simply put, any car that has been involved in any accident will lose out on its resale value. This is where a car history report comes to play. Even if you completely repair the car after an accident, a car that has been involved in an accident will lose at least 10% of its resale value when compared to cars that have never been involved in an accident.

Modifications

Another factor that affects the resale value of your used car is modifications made to the car. Not everyone will have similar likes when it comes to how their car must look. Making upgrades and visible modifications to the car, unless you are targeting gearheads who would appreciate your work, can significantly drop the resale value of the car.

Technology

Car technology is improving significantly year by year. Cars with better car technology will sell faster and with better resale value. Cars that come with backup cameras, hands-free parking assist, highway autopilot modes, in-cabin entertainment, and computer navigation systems tend to be more expensive when compared to their old-school peers, usually thousands or even tens of thousands of rupees more expensive!

Colour

When buying a car, it is wise to opt for a subdued appearance: muted colours, minimal chrome, and zero paint patterns or streaks. Although some used-car buyers look for loud or offbeat colour schemes, most prefer whites, grays, blacks, or subtle blues, greens, and reds.

The Final Word

Many elements figure into the resale value of a second-hand car. However, the mileage and overall condition of the car are the most crucial. Understanding and fixing a used car's price is not an easy task, but it is essential to get the specifics right. Whether buying or selling a pre-owned car, make sure that you have all the credentials necessary to reach an accurate price.