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DYK: These can bring down the resale value of your car

LiveMint logoLiveMint 03-06-2014 Tania Kishore Jaleel

Resale value is one of the most important aspects to look at when buying a car. All cars depreciate in value every year. But along with a vehicle’s annual depreciation, there are certain other factors that can bring down the resale value. Here are five of them.

Number of kilometers done

Lesser the kilometres recorded on your car, the better the price you are likely to get. If your car has done more than 10,000-12,000 km a year, its value may reduce as it means that your car has been extensively used already.

Condition of the car

Dents, scratches, chipped paint or any other visible damage to the body brings down the price. The interiors—door panels, windows, seats, floor mats and carpets—all have to be in good enough condition.

After-market installations

Adding a sub-woofer or alloy wheel plates diminish the resale value as these after-market additions hold no importance when it’s time to sell the car. Used-car buyers will be concerned about wear and tear caused when adding these accessories, and the cost of maintaining these additions.

Outstation registration

The cost of registration varies across states and the cost of the car. For instance, in Delhi, if your car costs up to `6 lakh, you have to pay 4% of the cost for petrol cars as road tax and 5% for diesel cars. If the car costs more than `10 lakh, you will have to shell out 10% for petrol cars and 12.5% for diesel variants. In Maharashtra, road tax is 9% for petrol cars that cost more than `10 lakh and 11% for diesel. For cars between `10 lakh and `20 lakh, it is 10% for petrol and 12% for diesel. If your car is an outstation registered vehicle, its residual value could come down even if you brought the car when you shifted with a No-objection Certificate (NOC) from the Regional Transport Office (RTO). A pre-owned car purchaser would prefer to buy a car that’s registered in the same state where they reside. Moreover, the road tax on a used car would have to be paid again and that too on the original invoice price and not on the current depreciated value. So most second-hand car buyers stay away from outstation registered cars, and even dealers who agree to buy will quote a price minus the incremental road tax to be paid for re-registration.

Colour

Most cars on the road are white, silver, golden, black or an earthy colour like brown or even red. Cars painted in an unusual colour are a minority. So, if you have a car that’s, say, yellow, pink, green or purple, finding a buyer could be difficult. Seek a dealer’s opinion on the most popular colours in the resale market.

Apart from these five factors, also make sure that the paperwork in terms of insurance, pollution control, NOC from bank (if you had a auto loan) are in order. There will also be transfer forms to sign if you are going through a dealer, and notify the RTO.

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