We’ve all heard the age-old saying, “A car loses half its value once you drive it off the lot.”
But what if you bought a used car?
Or maybe you purchased a brand new vehicle a while ago, and now you’re ready to sell it or trade it in for something better.
Even if you keep a new car in perfect condition, the value does indeed take a significant hit when you drive it off the lot. According to an article by the U.S. News & World Report, a new car depreciates by as much as 60 percent in the first 5 years (half of that is in the first year alone).
After the initial 5 years, the trendline will level off. So if you plan to keep the car for several more years, the depreciation won’t matter quite as much. However, if you want to sell your vehicle or trade it in during that 5-year window, be prepared to take a big hit.
5 factors that impact the resale value of your car
The following factors will play the biggest role in how much you can resell or trade-in your vehicle for, whether through a dealership or private buyer.
Make and model
Regardless of the quality or condition of your car, the brand of your vehicle matters significantly. Honda, Subaru, Hyundai and Toyota typically rank at the top for retaining higher values (between 45 and 60 percent).
Lexus, Acura, Infiniti, Mercedes and Audi don’t get the best resale value. Even though these are luxury cars, they only retain an estimated 35 percent of their value in the same amount of time (about 3 years).
Any damage to the exterior of a used vehicle decreases the value of a car, no matter how minor. A few scratches can make a big difference in the price point.
The same goes for paint color. If you have a blue or purple car, you’re probably going to get less for it than if it were a standard color like silver, white or black. Sometimes, you might not even get a sale at all, especially if the colors are discontinued or limited.
It’s easier to sell a car for a great price when the inside is clean and well-kept. But if your car smells bad and has stains on the seats, your price will have to reflect that. Consider hiring a professional service to detail the interior and invest in a set of new rubber floor mats to sweeten the sale.
Regular maintenance is key to saving yourself from a lot of headaches down the road. It means fewer problems and a better resale value.
It’s also worth keeping a record of any maintenance and repairs. This lets buyers see that the vehicle has been well-cared for and could increase the value of your used car.
Last but not least, fewer miles means higher resale values. If your car has over 200,000 miles, it will naturally sell for less than a vehicle with under 100,000 miles. Even if the interior and exterior are in mint condition, and the car was well-cared for, buyers are less likely to make an offer on a car with high mileage.
The right car, truck or SUV that is well-cared for can serve you well beyond 200,000 miles. The key is maintenance.
Ready to sell your used car?
There are several online tools for estimating the value of your car. Kelley Blue Book is one of the most popular resources to get an accurate resale value. If you’re looking to sell your vehicle, it’s a great place to start.
Once you know the resale value, take it into a trusted neighborhood car dealership and see what kind of offer you can get.