Once a car leaves a dealer’s lot, its resale value starts to decrease. There are a few key factors that determine resale value, according to experts at Black Book and Vincentric, two companies in the used-car valuation business. They are:
- Age, which automatically decreases a car’s resale value with each passing year.
- Mileage affects value if it’s higher or lower than the average for your car. Extremely low mileage can affect a car’s value, too, as it may hint at a problem that prevents it from being driven, or may lead to problems from not being driven regularly.
- Condition is determined by visible paint or body damage, interior damage and signs of wear, frame damage, mechanical operation, tire condition and accident history. The condition of your car is an important part of resale value, and cosmetic damage instantly decreases it. It also indicates that it’s more than likely that there are some mechanical issues, too. If there are both cosmetic and mechanical issues, the value will drop rather quickly.
- Market condition is another thing to consider, according to Vincentric President David Wurster. Market condition sets the resale price at the point where supply and demand meets. For example, there will be a higher demand for hybrid and fuel-efficient cars when gas prices are high, which increases their value, while convertibles will see more demand in the spring and summer months.
- Location is only a factor if a vehicle is more or less popular in a certain area. Trucks, for example, are more popular in Texas; compact cars are more popular in New York. The value of your car won’t be as high in lower-demand areas where it may be harder to sell.
The downward march of a car’s value is a phenomenon that, for the majority of cars, can’t be stopped. There are, however, steps you can take to make sure your car is worth as much as possible when you want to sell it.
- Perform regular maintenance and follow your car’s maintenance schedule. This includes oil changes, tire rotations and cosmetic upkeep.
- Save your service records. These will verify that you have taken good care of your car, and they can also help determine when it will need to be serviced again.
- Make sure all damage is properly repaired before you try to sell or trade in your car.
- Keep the exterior and interior clean. Excessive wear and tear will decrease the value even if the car runs perfectly. “No one wants a scratched car with a sticky interior,” Wurster said.
- If possible, park in a garage, which will reduce the chance of weather damage and vandalism. If garage parking isn’t an option, a car cover can provide some protection from the elements.
While resale value is partly determined by factors you can’t control, like high gas prices or a forthcoming redesigned version of your car, if you take the time now to show your car some tender loving care you can have extra money in your pocket later.