Keeping Resale Value in Mind When Buying a Car
If you’re in the market for a new car, you may be thinking about comfort, features and price. One thing you may also want to consider is the vehicle’s potential resale value. Here are a few things to keep in mind about your next car and its resale value.
Why Resale Value Matters
If you eventually plan to sell your car or trade it in when you buy a new vehicle, its resale value will be a big factor in how much money you can get for it, says AutoGuide.com.
Also, if your car is totaled, your auto insurance provider would pay you the actual cash value of the car at the time of the accident (depending on your coverage). Actual cash value is determined using factors such as the typical resale value of the car at the time of the accident, previous damage and depreciation. So even if you don’t think you’ll be selling your car, you may want to consider how well it retains its value over time.
Consider What’s Popular
AutoGuide.com states simple supply and demand come into play with resale value. Sometimes certain vehicles are more popular than others. For instance, you may like a smaller coupe or a family sedan, but maybe SUVs and trucks have been in higher demand for a few years. If you get a car that’s too niche or simply not in high demand, it may be harder to sell it in the future.
Go for a Standard Color
Simply put, neutral colors are more likely to help boost your car’s resale value. Sticking to colors such as silver, white, gray and black tend to be a safe bet, according to KBB. If you buy a car that’s an unusual, such as green or purple, fewer people might be interested when you go to sell it in a few years.
Choose Automatic Transmission
Roughly 2 percent of new cars sold have a manual transmission, says CARFAX. Most drivers are looking for a car with an automatic transmission, so you may want to avoid purchasing a new car with a stick shift.
Maintaining the Resale Value of Your Car
A car’s value drops about 20 percent in the first year of ownership, according to CARFAX. Here are a few things you can do to help maintain its resale value.
Mind the Mileage
If a car has either higher or lower mileage, it can affect its value, according to Cars.com. (CARFAX says around 10,000 miles per year is typical.) If a car has high mileage, it may not have as much life left as a similar car with lower mileage. However, Cars.com notes that a car with very low mileage may have problems from not being driven regularly or indicate it wasn’t driven much due to problems. You may want to limit the miles you add to your vehicle so the resale value doesn’t drop, but also make sure you use it regularly to help avoid mechanical issues.
Keep Up with Maintenance
Routine maintenance and making repairs when necessary go a long way toward keeping a car in good shape. CARFAX states that routine oil changes and replacing worn out parts can help keep a car from depreciating in value. Similarly, Cars.com says it’s also important to keep the car looking good — so make sure it’s fixed properly after an accident and that you keep the interior clean and fresh.
Keep the Warranty
Warranties often transfer over to the new buyer, says Auto Trader. If your vehicle still has a warranty, you may want to sell the car before the contract runs out. That’s something buyers may find appealing, and you may be able to get a little more money for a car with a warranty. Check with the warranty provider to be sure it will transfer, but it could be a good selling point if it does.
If you’re looking for a new car, you may want to consider its future resale value as you shop. Choosing a car that will appeal to buyers down the road and keeping it in good shape may help you get the most for it when you’re ready to sell or trade it in.
Originally published on August 25, 2015.