When I started my radio show almost 15 years ago, on show #1, I told the audience I would only recommend vehicles that had great long-term reliability, good value for the dollar, and good resale value. I have stuck to those tenets all these years. Before going on the air the first time, I listened to a number of other automotive shows, and was amazed that not one of them ever mentioned resale value. I have had people tell me they were not worried about resale value because they leased their cars. They, too, should pay attention to what they lease to have the best chance of equity at the end of a lease.
Cars are depreciating assets, but what isn’t? Hopefully your home goes up in value, but not always. Go out and buy a boat, a recreational vehicle, or a TV and see if the value goes up. This begs the question, what can you do to help maximize your car’s values?
1. One thing is timing.
I’ve been telling people for years to be aware that every August, mid-month, late model cars start to drop in value as every car turns a year older all at the same time. If your vehicle is five years old or newer, auction prices and book values start to drop and generally do not stabilize until mid-September. If you know you are going to trade-in your late model vehicle in the near future, do it before prices start to drop.
2. One of the biggest drivers of resale value is the odometer.
There can be thousands of dollars difference in the value of identical cars-one being low mileage, the other being high mileage. While there is often nothing you can do about the mileage you drive, especially to and from work, sometimes you can car pool with someone or take public transportation. At other times, if you have two vehicles in your family, spreading the mileage between two vehicles equally can help.
3. Keep good maintenance records, or a log.
A car will bring more when you go to get rid of it if you can prove you’ve been diligent with your maintenance. If you are going to trade your car in to a dealer, leave those records lying on the front seat, clearly labeled, so the appraiser will see them. If you are selling the car yourself, go over the records with the prospective buyer to get top dollar.
4. Watch your colors when selecting the color of your next vehicle.
While lime green or Barney the Dinosaur purple may appeal to you, it will not to most, including car dealers who have to resell that car. Silver, white, and red are generally colors that will not turn anybody off. Black, although popular, will keep some buyers away, especially in hot weather states.
5. Keep the time of year in mind.
If you have a clean, older car, it is more likely to bring big bucks in May when people are buying cars for their kids graduating, or in August as many people buy cars for their kids to go to college. If you have a convertible, try to sell or trade it in the spring and summer when convertible buyers are in the mood.
6. Finally, if you are going to try to maximize your resale value, do some research.
Vehicles that are slow sellers as new cars will almost always depreciate at a greater rate than vehicles that are much in demand. Look at new vehicle residual values, those are predictions of future values, and generally they are pretty accurate. The higher the residual value, the higher projected resale value.
We can’t always control resale value, either good or bad, sometimes it is just luck. By following these suggestions, you’ll give yourself the best chance of maximizing the amount you get for your trade-in.