It is important to look after your vehicle by servicing it regularly and in accordance with the manufacturer’s stipulated service intervals.
Everyone says that the value of any vehicle depreciates the moment you drive if off the dealership floor. This applies to both new and pre-owned vehicles; and while this is true in part, there are ways to protect and help maintain the value of your vehicle for future resale.
However, before we unpack some of the key factors that could affect the resale value of the vehicle, it is important to understand common terminology used by the motor industry when selling your vehicle.
- Retail price: This is the recommended selling price, excluding any optional extras. Dealerships incur costs such as marketing, insurance, vehicle reconditioning and repairs, facility overheads and staff remuneration. As such, the dealership needs to factor some profit into the vehicle price, so the retail value is normally at the higher end of the scale.
- Trade or market price: This is usually lower than the retail value, but may vary in line with vehicle demand. The trade or market price is the value which should be considered when trading in or selling your vehicle.
- Depreciation: This refers to the reduction in the value of a vehicle over time, due to varying factors such as mileage, wear and tear damage etc.
If the vehicle also requires ongoing maintenance, it may be worth far less than you expected when the time comes to sell it.
Kutlwano Mogatusi, WesBank’s Communication Specialist
Photo Cred: Erick Mclean on Unsplash
The optimal time to trade in your vehicle
Used vehicle websites can be extremely valuable for researching which vehicles are the most popular, the fastest selling and have held their resale value over time. The optimal time to trade in one’s vehicle is when the trade value of the vehicle is more or less in line with the settlement amount owed to the bank.
“Variables such as mileage and the overall condition of the vehicle will also affect the resale value. It can be tempting to consider a bargain deal on a particular vehicle because it has a high mileage, but this could prove to be costly down the line. If the vehicle also requires ongoing maintenance, it may be worth far less than you expected when the time comes to sell it,” explains Kutlwano Mogatusi, WesBank’s Communication Specialist.
Photo Cred: Liam Briese on unsplash
Another useful tip is to resist over-embellishing your car with aftermarket accessories
Kutlwano Mogatusi, WesBank’s Communication Specialist
Simple tips to get the best resale value for your car
To ensure that you get the best price for your car, here are a few simple ways to maintain your car’s resale value:
- When buying your vehicle, choose the make and model carefully. This includes the colour with white or silver being considered your best bet. Also consider that some brands are expensive to maintain or require more after-sales support than others.
- Keep a detailed service record. Be diligent, stick to the maintenance schedule and keep a record of all work that has been done on your vehicle. A clean maintenance record will benefit you when it comes to negotiating the resell price of your vehicle.
- Use it, don’t abuse it. This is self-explanatory and refers to all aspects of the car, from the brakes and transmission to paint chips, dented rims or a few dents – all these elements will be checked by a potential buyer.
- Keep your vehicle’s papers in order. These include the original vehicle registration form and proof of payment of the annual vehicle licence fee; you should also ensure there are no outstanding fines or e-Toll costs owing on the vehicle.
- Deal with the small issues:If you notice something wrong with your vehicle – anything from an unusual sound in the engine to a few scratches – have it dealt with it immediately. Not only will this help preserve it’s resale value, but it is always better to be safe than sorry.
- Use a reliable mechanic. It is recommended that you service and maintain your car at a workshop with a good track record and trusted mechanics; remember that franchise dealerships have expert vehicle knowledge and qualified technicians who are specially trained to work on your specific brand.
- Where you park your car can also impact its resale value. A closed garage is ideal, but this may not always be possible. Try not to leave your car parked under a tree or exposed in the sun for long periods at a time to maintain the exterior paint; also consider using a sun visor and even car seat covers to preserve the car’s interior.
Photo Cred: Chad Kirchoff
“Another useful tip is to resist over-embellishing your car with aftermarket accessories. While part of the joy of owning a car is making it your own, these personal style additions could impact negatively on its resale value. You might think oversized rims, outrageous body paint or a booming sound system are improvements but be aware that the next owner or the dealership where you plan to trade in your car, may not!” cautioned Mogatusi.
“Keeping your car clean and in as excellent condition as possible is probably the best way of ensuring it retains its value over time. A small scratch or dent might not seem like a big deal but accumulating dents or scratches over time will detract from the car’s overall appeal,” says Mogatusi.
