WesBank highlights some of the key factors that could affect the resale value of the car.
When you buy your first car, whether it is brand new or a good used model, everyone will tell you that the value of this big-ticket asset will depreciate from the moment you drive it off the dealership floor.
While this is true in part, the longer you own it and the more you drive it, there are ways to protect and maintain the value of your car for resale.
The country’s leading provider of innovative vehicle and asset solutions, WesBank highlights some of the key factors that could affect the resale value of the car.
The first one is the retail price. This is the recommended selling price, excluding any optional extras. Dealerships incur costs such as marketing, insurance, vehicle reconditioning and repairs, facility overheads and staff remuneration. As such, the dealership needs to factor some profit into the vehicle price, so the retail value is normally at the higher end of the scale.
The trade or market price is usually lower than the retail value. While this value may vary in line with vehicle demand, this is the value that should be considered when trading in or selling your vehicle.
The term “depreciation” refers to the reduction in the value of an asset over time, due to varying factors such as mileage and wear and tear.
It is also advisable to do some homework upfront before committing to a vehicle purchase, as this can pay off down the line when it is time to sell the car.
Some recommendations from WesBank in this regard are:
• Consider the historic market demand of a particular make and model of vehicle • Is the two-door or four-door model more popular? • Is automatic preferred to manual? • Does the vehicle run on diesel or petrol?
The optimal time to trade in one’s car is when the trade value for the car is more or less in line with the settlement amount owed to the bank.
“Variables such as mileage and the overall condition of the car will also affect the resale value. It can be tempting to consider a bargain deal on a particular vehicle because it has high mileage, but this could prove to be costly down the line. If the vehicle also requires ongoing maintenance, it may be worth far less than you expected when the time comes to sell it,” explained Kutlwano Mogatusi, WesBank’s communication specialist.
To ensure that you get the best price for your car, here are a few simple ways to maintain your car’s resale value:
• Choose your vehicle make and model carefully – this includes the colour (white or silver are considered your best bet), and some brands are expensive to maintain or require more after-sales support. • Keep a detailed service record – be diligent, stick to the maintenance schedule and keep a record of everything that has been worked on in your vehicle: a clean record will benefit you when it comes to the price negotiation. • Use it, don’t abuse it – this is self-explanatory and refers to all aspects of the car, from the brakes and transmission to paint chips, dented rims or a few dents – all these elements will be checked by a potential buyer. • Keep your car’s papers in order – these include the original vehicle registration form and proof of payment of the annual vehicle licence fee; you should also ensure there are no outstanding fines or e-Toll costs owing on the car. • Deal with the small issues – if you notice something wrong with your vehicle, anything from an unusual sound in the engine to a few scratches, check it and deal with it; to preserve the resale value, it is always better to be safe than sorry. • Use a reliable mechanic – it is recommended that you service and maintain your car at a workshop with a good track record and trusted mechanics. Remember that franchise dealerships have expert vehicle knowledge and qualified technicians who are specially trained to work on your specific brand. • Where you park your car can also impact its resale value – while a closed garage is ideal, this may not always be possible; if not, try not to leave your car parked under a tree or exposed in the sun for long periods at a time to maintain the exterior paint. Also consider using a sun visor and even car seat covers to preserve the car’s interior.
“Another useful tip is to resist over-embellishing your car with aftermarket accessories,” cautioned Mogatusi.
“Remember to keep all these tips in mind when looking to buy your first car and applying for finance through WesBank’s unique Graduate Finance offering,” said Mogatusi.