Car Buyers' Guide: Thinking ahead to resale
A little bit of thought before buying may add up when selling
How often do buyers think about the pros and cons of reselling a motor vehicle at the same time as tossing up whether to initially purchase it or not?
For many of the household or personal purchases we make it doesn't really matter; it's a must-have item at the time of purchase and we buy knowing full well that there will be very little, or possibly no, resale value when replacement time rolls around.
Motor vehicles, however, are a little different. Regardless of the initial buy price, they are one of the bigger financial commitments people make in their life, so the expectation is there will be a reasonable retained value when it comes time to upgrade. A vehicle may be simply bland and boring and offer little emotional appeal while, at the opposite end, a certain vehicle type may only appeal to a limited number of buyers.
In the middle of those extremes there are a number of different reasons why some vehicles are potentially more desirable and can hold their prices better than others.
Depreciation over time is an obvious reason for vehicles to lose value, but limiting those losses and owning a vehicle that is a little easier to sell or trade is something that is often overlooked at purchase time.
The real motoring enthusiasts may not care too much about resale values and just want to enjoy the moment in a vehicle of choice, but for others a little bit of thought before purchase may help recoup a larger share of their initial outlay when it comes time to sell.
So let's highlight some of the areas where resale values can fluctuate more than others when buying into the mainstream used car market.
Apart from a select few vehicles, high odometer readings can dramatically affect a vehicle's resale value. If you purchase a vehicle that has travelled well over the average distance for its age (14,000km a year) then chances are, after more kilometres are added, its value will drop sharply at resale time. Remember regardless of condition, a high odometer means lots of road time which converts to wear and tear on running gear such as suspension, driveline, steering, transmission as well as the engine.
The more versatility and practicality the better. While looks may not matter to some, the bland, plain and unexciting makes and models will take longer to sell and prices will suffer accordingly. Vehicles with little room for passengers and cargo will also have a limited audience.
It depends on the price range and age of a vehicle, but future buyers will often look for the best safety package. In addition a vehicle with a high crash test rating can make for an easier sell.
Vehicles have to meet a specific expectation from potential buyers, so engine sizes can vary, but large vehicles with multiple cylinders and high fuel consumption figures will become harder to sell as time marches on which relates to a big drop in asking prices.
Some of the older hybrid vehicles (petrol/electric) may also become harder to sell over time as batteries reach, or surpass, their respective manufacturers' end of life expectancy.
If you travel under the national average (14,000km) a year and do not use a vehicle for anything extreme then it's hard to justify buying a used diesel. As petrol engines become even more fuel efficient a diesel engine fitted into a small- to mid-size standard road car will become harder to sell due to higher overall running costs.
An older low mileage vehicle may be a good buy today but down the track the lack of certain safety features and occupant comforts may become a turn-off for potential buyers and asking prices will suffer.