WHEN you buy your first car, whether it’s brand new or a good used model, the value of your prized possession will mostly drop from the moment you drive it off the dealership’s floor.
The longer you own it and the more you drive it, there are ways to protect and maintain the value of your car for resale.
The following tips can help you in getting a better return on your car when the time comes to trade it in, sell it privately or upgrade it to a newer model.
WesBank highlights some of the key factors that could affect the resale value of the car.
It is important to understand some of the common terminology used by the motor industry when selling your car.
The first one is the 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 car price, so the retail value is normally at the higher end of the scale.
The trade or market price is usually lower than the retail value. While this value may vary in line with vehicle demand, this is the value that should be considered when trading in or selling your car.
The term depreciation refers to the reduction in the value of an asset over time, due to varying factors such as mileage and wear and tear.
Some tips from WesBank in this regard are:
Consider the historic market demand of a particular make and model of car.
Is the two-door or four-door model more popular?
Is automatic preferred to manual?
Does the car run on diesel or petrol?
Used car websites can be extremely valuable for researching which cars are the most popular, are the fastest selling and which have held their resale value over time. The optimal time to trade in one’s car is when the trade value for the car is more or less in line with the settlement amount owed to the bank.
“Variables such as mileage and the overall condition of the car 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,” said Kutlwano Mogatusi, WesBank’s communication specialist.
It is important to look after your car by servicing it regularly according to the manufacturer’s stipulated service intervals. This will reassure the dealership that the car has been well maintained with less likelihood of finding a fault with the mechanics of the car.
To ensure that you get the best price for your car, here are a few ways to maintain your car’s resale value:
Choose your car make and model carefully – this includes the colour (white or silver are considered your best bet), and some brands are expensive to maintain or require more after-sales support.
Keep a detailed service record – be diligent, stick to the maintenance schedule and keep a record of everything that has been worked on in your vehicle: a clean record will benefit you when it comes to the price negotiation.
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 car’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 car.
Deal with the small issues – if you notice something wrong with your car, anything from an unusual sound in the engine to a few scratches, check it and deal with it: to preserve the resale value, 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 – while a closed garage is ideal, this may not always be possible; if not, 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.
“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 the best condition possible is probably the best way of ensuring it retains its value over time. A small scratch or dent might not seem a big deal now but accumulating many such dents or scratches over time will detract from the car’s overall appeal.”
