There’s a saying that “when you drive your car off the lot, it depreciates by 10%.” This is even if you have the latest model with all the options equipped. Depreciation is a large shadow casting itself over your car like the grim reaper. According to the AAA Northeast, “depreciation accounts for almost 40% of the cost of owning a vehicle.” It can greatly affect the price of your car when it comes time to sell it. Though depreciation applies to all make, models, and years of cars, you can still fight its effects and get the most resale value for your car.
1. Wash your car when a potential buyer looks at it.
The aesthetics of a car is the first thing that we all see. Brand new cars are presented to the new owners in pristine condition and same should be said with pre-owned vehicles. Washing your car will give you the opportunity to breathe life into your car’s paint job by correcting it. Thought it won’t bring you thousands of dollars back from depreciation, it will give the potential buyer a sense that you’ve taken care of your car. Don’t forget to clean the interior, and the engine bay. A fresh interior greatly influences a purchase. Having a clean engine bay will show the potential buyer that you’re not hiding any engine leaks. Leaking oil can be an expensive fix, so proving your engine is pristine can take time away from the negotiations.
2. Replace parts with large damage.
You can be the most careful driver in the world, but you can’t speak for the other drivers sharing the road with you. Accidents happen all the time and can’t be avoided. Your bumper covers are the usual casualties of minor accidents because of the nature of their location. Simple fender benders, and shopping cart dents can be easily fixed/replaced and speaks a lot about how you take care of your automobile.
3. Always maintain your car.
It goes without saying, maintenance should be a cost you expect when purchasing a new vehicle. If you fail to regularly maintain your car thinking it saves you money, it will more than likely come back to haunt you. The simplest example would be your regular oil changes. If you do not get your oil periodically changed, it will cause damage to the engine. Bad engine performance is a serious red flag that will most likely drive any buyer away.
4. Keep all your service receipts.
Telling a potential buyer that you service your car periodically is different from showing them. Even if your car is a second hand vehicle, proper maintenance during your ownership is still a selling point. A large negotiation tactic for those buying second hand vehicles is looking for the service history. For sellers that can’t show a service history, or at least service receipts, the buyer tends to bargain at a lower than desired price. Service receipts also saves you time defending the car’s health from a potential buyer.
5. Consider the health of your tires.
Tires are an essential part of any vehicle. They keep you from running into other cars when it’s raining, and they can also dictate the comfort of the ride. Healthy tires can put a couple of hundred dollars back into the price of your car. Brand new tires roughly cost $1000 a set. Selling a car with relatively new tires will save the buyer money replacing them. Maintain your tire’s air pressure, and make sure there are no flat spots on the perimeter of the tire. If you want to go the extra mile, have them rotated before you sell your car. Test if the tire tread is still up to par with the penny test. Insert the penny in the ridges of the tread with Abraham Lincoln facing down. If the tire’s tread covers the top of Abe Lincoln’s head, then your tire is still safe, but is suggested to be replaced soon. If the tread is below his head, then your tire needs to be replaced immediately.
6. Upgrade safety equipment.
Upgrading the standard safety equipment of your car can add a few more dollars to the sale price. Don’t expect to make all your money back from the purchase and installation of the parts though. Simple parts like a reverse camera, or backing sensors are ideal upgrades.
7. Keep the mileage low.
Low mileage cars have less wear on them in the mechanical aspect. This is a good indicator for the next owner on how long he can potentially drive the car for. Low mileage cars tend to have fresher interiors and less issues with the engine.
8. Don’t trade your car in at the dealership.
When you’re buying a new car, the dealership will convince you to trade-in your existing car to lighten the payments. The dealership will want to make money off the trade, and will resell it in the second hand market after taking ownership. If you don’t want the hassle of selling your car, then it is absolutely ok going this route. Take note though that they will give you the lowest offer for your car to increase the potential profit when they sell it.
9. Buy a car with a low depreciation rate.
Do your research before buying a brand new car. There are websites which tell you how well a brand and model is doing in the second hand market. If a certain model is reselling with a good price, it does not necessarily mean that other models in the brand will sell well. Don’t just settle for the displayed fuel or maintenance costs on the window sticker of a car. Know how much it can potentially sell for after 5 years.
Purchasing a brand new car is a liberating experience, especially if it’s your first car. It’s a reflection of all your hard work and discipline. But being wise with your money and buying a second hand vehicle is often the better choice. The depreciation is greatly shouldered by the first owner, and it would be easier for a first time buyer to insure a used car. Second hand car purchases have recently been increasing with the news of tariffs on new vehicles. Now is a great time to buy a second hand car, with a wide selection of makes and models readily available. Remember to be cautious and do your due diligence before purchasing a second hand car. Use online services that let you look into the car’s history, and if it has a salvage title or not. Safety and the longevity of ownership should be your primary concerns when choosing a second hand car. If you do your homework, then you’re sure to build great memories with your second hand car without breaking the bank!