Protect your car’s resale value

Buying a car is a significant cost for most of us. It’s daunting to think your new car will immediately lose a big chunk of its value as soon as you drive it out of the dealership’s show room. 

But by planning ahead and taking care of your car, you can reduce the effects of depreciation and preserve its resale value when you decide to sell. Here’s a few simple steps to make sure you get no ugly shocks.

Step 1 – get the finance right
Car dealership financing can sometimes drive up the cost of the car, so it pays to ask us to shop around for the best loan deal that suits your plans and personal financial circumstances before you go to the dealership. Getting your financing in place first will give you bargaining power, which can help save money on the initial costs.

Additionally, when structuring your loan, you need to select an appropriate residual value on your car finance (if any). This means you should  make sure  you don’t owe more than your car’s worth when you decide to sell. If you plan to keep your car for five years, make sure it’s paid out in that time period, or at least paid out to be in line with its likely resale value.

Step 2 – pay less
The less money you spend on buying your car, the less you will lose by depreciation. It may sound obvious, but many people forego this  fact for the pleasure of owning something new and top of the range.

Choosing a demonstrator vehicle or the previous year’s model is a great way to reduce the first big value drop when you buy a car. This route gives you the potential to save thousands up front. If you really must have the very latest new model, shop around for the best deal.

Step 3 – buy smart 
Your new car’s eventual resale value can be greatly affected by the car you choose in the first place. You need to make sure that it will be highly sought after by used car buyers. Consider a brand of car that has a good reputation for quality and reliability. Perhaps think more deeply about avoid guzzlers, trendy or obscure colours (white is the most popular colour in Australia), vehicles with a low safety rating and cars that have a reputation for being difficult or expensive to maintain

When selecting options for your new car, ensure they add value in the long term. For example, it may be smarter to spend your money on extended safety features like side airbags instead of a larger stereo with sub woofers or a trendy body kit.

Step 4 – care for your vehicle properly
A used car in mint condition has a greater resale value than one that’s been neglected. But to claim that it’s in pristine condition when it comes time to sell will require evidence. That means you need to service your car regularly at a reputable service centres and maintain accurate records as evidence.

To ensure the highest possible resale value, you will  need to look after the general condition of the car. Keep your car in a garage to protect it from the weather.  Don’t smoke in your vehicle. Keep both the interior and exterior of  clean and protect the paintwork with good quality wax. If your car looks and smells new when it’s time to sell, you should get a better price.

Additionally, if your car is involved in any accidents, knocks or scrapes, get professional repairs immediately. Leaving these issues can cause greater damage in the longer term.

Step 5 – consider when/how you will sell it
You are likely to get a better price if you sell your vehicle  privately. But if you’re not a confident negotiator, or don’t have the time and patience to hold out for the best price, then let experts do the job. Remember, you can often get a better price as a trade-in than just selling it to a dealership.

If you want to buy a new car in 2015, we’re here to help get the financing right. Asset financing is just one of the many loan types that we can help you source, so if you’re looking for financing, it pays to give us a call before you consider making a purchase. It’s a great time of year to  consider getting the car you’ve always wanted, so give us a call?

About Paul Brazier