Unless you are a connoisseur or a car collector, you probably believe in the ideology to upgrading to a new model every few years. While we generally have our plans in place for which cars to upgrade to after buying our first one, seldom do we pay heed to the factors that affect the resale value of our current car. It is important to keep these things in mind, unless you are ready to take a big hit when you enter the used car market. Over the next few pages Charles and I’ll take a look at various such factors to help you take the right steps for getting an optimum resale for your car…
This one’s quite obvious – the older your car is, the less money you’ll get for it. However, there are one or two things you should know about valuation and age. There’s one big dip in value that occurs when a car becomes two years old, and then the field evens out at the five year mark, irrespective of brand. If the model goes out of production, that’s another factor that can work against it. And if it’s been ten years since it went out of production, the company isn’t legally bound to make spares for the vehicle any more – which means you’re going to spend a fair amount of time waiting for spares. Insurance companies also shy away from insuring vehicles that are old – IFFCO, for example, will not insure a vehicle over ten years of age. If it’s over 14 years old, you’re going to have to get it inspected and passed by the RTO every few years.
2. Odometer reading
Again, this is obvious. The greater the number on the odo, the sooner it’s going to require overhauling. The standard life of an engine is 100,000km. There is relatively expensive maintenance carried out at 20,000-30,000km and 50,000-60,000km marks. If a vehicle is run over a very large distance over a short period of time, there is a very strong possibility of it being run hard over that distance. The other end of the spectrum is a car that has run incredibly little. This means the vehicle has stood unused for considerable periods, which isn’t a good thing either.
3. Condition (interior, exterior)
The condition of the interior and exterior speaks volumes about the way the car is treated. If it’s clean and shiny on the outside, it probably has been washed and waxed regularly. If the interior is dirty, it shows that the owner doesn’t particularly care about the vehicle, and this means that it might have faced abuse.
4. Paint colour, condition, whether original paint
An exclusive aftermarket paint job might make heads turn wherever you go, but when it comes to selling the car, it’s usually a negative factor. Especially if you haven’t gone through the trouble of re-registering your vehicle with the new paint scheme so that it reflects on your registration book/smart card. It also raises suspicion about the vehicle being in an accident. The exception is a high-quality paint job that the prospective buyer appreciates.
5. Paperwork and service history
Possibly the most important thing here – this is required if warranty is to be maintained. Keep all possible paperwork in a file from day one, including tax receipts, dealer invoice, service bills, invoices for replaced parts etc. This will give the prospective buyer peace of mind because it shows that you’re meticulous and they will be willing to pay more for such a car.
6. Number of Owners
Unless your car is an exotic or a rare find that is in high demand, the number of owners listed on the registration papers affects the resale of most production cars. Prospective buyers will also shy away from vehicles that have been used by too many hands. Vehicles that are company-owned and then transferred onto an individual’s name will attract a relatively liberal treatment than vehicles with more than one owners on the registration papers. Some banks or financial organisations also refrain from financing used vehicles that have more than two owners on the registration papers.
7. Condition / size of the tyres
An important component that most dealers or buyers will look at is the set of tyres that your car is running. Tyres that have a high amount of wear or cuts on them reflects towards the negligence of the driver or owner. There also is a belief in the used car market that cars running on worn tyres for a considerable amount will generally lead to high service costs with regard to the suspension and drive shaft elements. So it is recommended to get your car’s tyres checked and changed to not only avoid any mishaps caused by worn tyres, but also to gain a better resale value for your car.
Another allied factor that can hamper the resale value of your car is the tyre size. While enthusiasts may prefer paying a little extra for a set of high end tyres that are also a size up than the stock ones, a regular buyer or dealer will pull you down for the same. Inaccurate tyre size can not only hamper the fuel efficiency of the car but also affect engine and handling performance and can therefore bring down the resale value. So choose your tyre sizes carefully.
Click here to know more about tyres and how to maintain them
8. Aftermarket upgrades
Similar to the downsides of a customised paint-job we mentioned earlier, aftermarket upgrades too are a double edged sword. While aftermarket components like a decent set of branded alloy wheels, a good audio head unit, branded speakers, amplifiers and sub-woofers will (more often than not) get you some brownie points while selling the car, they won’t really bump up the resale value in a big way. They may costs thousands of rupees during installation, but in the used car market, they’ll hardly increment the resale value by ten percent – so don’t bet on these for a great resale value.
Other modifications like scissor or ‘Lamborghini’ doors, HID headlights with ‘angel eyes’, extra meters bolted onto the dashboard, racy pedals, free-flow exhaust systems, loud air-filter kits, ridiculously upsized wheels, dark window tints, under-body lighting, fake aero scoops and body kits etc. sound great on paper and look even better to an enthusiast. But such a car generally points towards abusive use that people generally associate with wannabe racers. So unless you are targeting to sell such a car to a local racer boy, expect such a ‘modded’ car to gain a significantly lesser or almost similar resale value as a stock car of the same make and model, in the conventional used car market…