Buying a new vehicle is always exciting, but it’s important to remember that you probably won’t keep that car forever. Eventually, you will either sell it or trade it in at the dealership. As such, any time you purchase a new car, you should be thinking about its resale value: How much are you going to get for it when the time comes for you to move on? This is especially important among those who buy a new vehicle every two or three years.
This is never a simple question to answer, and it depends on a number of different factors. What can be said across the board is that cars depreciate in their value. When you drive the vehicle off the lot, it loses 10 percent of its value right there, and will lose as much as 30 percent of its value within the first year of ownership. By the time three years have passed, the vehicle may have depreciated by half.
Factors That Impact Resale Value
As for specific factors that can make a vehicle’s value drop, here are some of the key ones to consider.
The make and model. Some vehicles simply depreciate more dramatically than others do, and it’s smart to research this before you buy; resources like Kelley Blue Book can be helpful.
Geography. The value for a vehicle is at least partly based on supply and demand, and that’s something that can vary geographically. For example, a pickup truck may be more popular—and therefore more valuable—in a rural town than it is in a city like Miami.
Climate. Even the outside conditions can be significant. For example, a convertible will be easier to sell during the sunny months of summer, while a vehicle with four-wheel-drive will be a more popular ticket during the winter.
Color. This isn’t necessarily a big factor, so long as you stick to a fairly standard color palette. Fad and novelty colors are the ones that won’t maintain their value.
After-market additions. Some perks and add-ons can create additional value, but not all of them will—so be careful! Something like a $500 stereo system may not add as much value as you would hope.
Trim level. Naturally, if you get the super deluxe model of your vehicle, with all the bells and whistles, that will carry more value than the bare-bones iteration.
Transmission. There is always going to be higher demand for automatic than manual transmissions.
Upholstery. Similarly, there is always going to be higher demand for leather seats.
Thinking About Resale
As you can tell, there are plenty of factors that can impact the resale value of a vehicle—and that’s something you always want to be thinking about when you buy a used car. To learn more, don’t hesitate to contact us or to speak with a sales professional at the reputable used car lot nearest you. We are happy to put you in contact with a good California used car dealership!