For many of us, our motor vehicle is the second greatest purchase we’ll make in our lives… here’s how to ensure you maintain the value of your car.
THE INTERESTING THING, we expect most of those other big financial commitments to pay off. We expect our homes to appreciate in value, and our education to pay off in other ways.
Not so with cars. For the most part, we actually expect to lose money on our cars.
For most of us, the cost of public transport would be less, so we’re paying for the comfort and convenience.
And we just hope to get enough time and use out of our car, before we inevitably lose it via sale or write-off.
Of course, there are a few ways to minimise your losses and ease the impact on your hip pocket.
Rethink that shiny new car
It’s the cliché that most of us know – that you lose a huge chunk off the value of a new car the moment you drive it off the lot. And the facts aren’t too far from the myth; most experts calculate you lose around 20 per cent of your car’s value the moment it becomes ‘pre-loved’.
There’s no easy way to put it: a new car is not a good investment. Unless you choose your model very deliberately, and plan to hang on to it for a couple of decades, until its value begins to increase again, it’s not a great financial decision.
But I’ve written before about how valuable it can be to choose a car you love – so even a decision that don’t make the best financial sense, can still be the right choice to make you happy.
Look for a late-model used car is the obvious choice, particularly if it’s still under manufacturer’s warranty. Cars lose most of their value in their first three years on the road, so you can expect the drop to even-out after that.
If you really have your heart set on being the first to put kilometres on the clock, then look for end-of-year or model run out sales, and especially any drive-away deals that save you having to pay dealer delivery or registration costs.
Be brand aware
Unsurprisingly, some brands retain their value better than others.
If you’re hoping to sell your car in future, understand that customers will be considering their ability to access quality servicing, advice and parts as part of their purchase decision. And if your car is a quirky or unusual brand, it might be a deterrent.
Those brands you might pay a little more for up front tend to keep proportionately more of their value in the first three years and thereafter. Toyota, Subaru, Mazda and Volkswagen feature regularly in ‘best value’ lists.
In this area, personal preference can come into it a little as well, and it’s not always logical. Second-hand car buyers, like all of us, have loyalties or preconceptions about certain makes and models.
Even country of origin can be divisive, with drivers who love or loathe Japanese or European cars, for example.
Be conservative with your colour choice
Look, if you absolutely love that metallic pink or lime green, go for it. But just be aware you might pay for your choice again, for it when it comes to resale time.
Bolder colours can actually attract a good price, but you‘re aiming for a narrower market, and that might mean it takes a longer time to find your right buyer.
The benefit of choosing a more conservative colour is that fewer potential buyers are likely to be put-off by the colour.
To get an idea of what’s popular, look at the kinds of colours manufacturers include in their new car ranges almost every time. There’s almost always a white, a silver or grey, and a black.
Blue and red are also reliable choices, and darker colours are usually less off-putting than bright.
Easy on the accessories as well
The right accessories can actually add value to your vehicle.
Cruise control, tinted windows, improved entertainment or navigation systems, even performance suspension packages and custom wheels, are all fairly safe choices that will tick the boxes for many potential buyers.
But much like the radical colour choices, outlandish accessories are likely to limit your market. So before you install that giant wing on the back or gull-wing doors, you should be prepared to either accept the risk or remove them before sale.
Think about your potential customers, and the kinds of accessories they’re likely to expect. A sun roof on a luxury vehicle is almost a given; sports pack suspension and some rockin’ wheels on a family sedan, not so much.
Some accessories will also send a message about how hard the car might’ve been driven (turbo charging, anyone?); and whether accurate or not, that can be a red flag to buyers as well.
Factory options installed by the manufacturer (and covered by warranty) tend to hold their value well, but if you install good-quality after-market products, that can be just as good or better.
When choosing after-market add-ons, you might also want think about the brands people know and recognise – folks may be likely to pay more for these, though it’s unlikely to impact hugely on their decision.
Keep your paperwork in order
Accurate record of purchase, servicing and maintenance will add to your resale value, and are among the first things car buyers will look for.
This include purchase of tyres and battery, for example, as well as the vehicle itself.
Don’t forget purchase and warranty records plus any user manuals for after-market accessories you’ve installed.
Keep records of any repairs as well, so interested buyers can see the job was done right.
Wash and clean, but not too often
Keeping your interior and paintwork looking schmick will be important when it comes to resale time. But scrubbing your car inside and out every week isn’t necessarily the answer.
Leaving tree sap or bird poop on your exterior for too long will damage the finish, so a regular gentle clean will go a long way.
That said, swirled or scratched paint as well as stone chips, will be used by any potential buyer to push your price down. Don’t use dirty brushes or water – ever! – and you don’t need to clay-bar every time you polish your vehicle.
Also, as my colleague has previously pointed out, save the cut-and-polish for right before you sell, to avoid unnecessarily thinning out your clear coat.
(If your paintwork is looking a little rough, it might be worth paying for a paint correction job – they’re not too exxy and the results can be outstanding).
Do what you can to protect your interior without compromising your use of the car. For example, if you don’t already have them, invest in decent floor mats to protect your carpet.
Get someone honest to tell you if they can really smell the essence of your kids’ mess, pets or smoking, and if so, you might need to invest in a professional clean to address it.
Question: How about you? Any other tips on how to keep your vehicle’s value up? Or do you reckon you’re just fighting a losing battle?
