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What’s my car worth? 10 things that impact a car’s resale value

Espresso logo Espresso 22-10-2020 Carina Ockedahl
a close up of a car © Shutterstock

Many factors can impact a car’s resale value, from depreciation to the colour of an automobile. In order to help you better navigate the used-car market, we’ve compiled 10 factors that can affect resale value. This knowledge can help you sell your current vehicle or search out bargains when buying a second-hand car.

Depreciation

Depreciation is a car buyer’s nightmare. The moment you drive off the dealer lot, your new vehicle loses an automatic 10% of its initial worth. After a year, it loses another 10%, and after five years, your car will be worth just 40% of the original Manufacturer’s Suggested Retail Price (MSRP).

Demand

Supply and demand play a big role in the second-hand car market. Factors that can increase demand for a car: a limited or special edition vehicle produced in small quantities; sought-after technology options; a fun-to-drive sports car equipped with manual transmission rather than automatic; or a popular model liked by many types of buyer.

MORE: The best cars of the last decade

Mileage

The number on your car’s odometer can either increase or decrease a used vehicle’s second-hand value. Lower mileage means less wear and tear on the car, which increases its worth on the used car market. According to Carfax, driving a vehicle 16,000 km (about 10,000 miles) or less per year is ideal if you plan to sell it onward.

a car parked in a parking lot: While we often buy a car because of its exterior appearance, we only see the inside when using it. Likewise, car enthusiasts love to install special rims or spend a beautiful July Saturday washing and polishing the body, while neglecting the interior. In fact, the passenger compartment receives little attention, save for an occasional vacuuming or window cleaning. © shutterstock

While we often buy a car because of its exterior appearance, we only see the inside when using it. Likewise, car enthusiasts love to install special rims or spend a beautiful July Saturday washing and polishing the body, while neglecting the interior. In fact, the passenger compartment receives little attention, save for an occasional vacuuming or window cleaning.

Condition

A vehicle will always be more appealing to buyers if its overall exterior and interior appearance are well maintained and clean. In fact, condition is as important as mileage in assessing value, according to Investopedia. Dings, scratches, missing trim, windshield cracks, failing electronics, and other signs of wear can all negatively affect a car’s resale value.

Performance

Much like your car’s appearance, its mechanical performance must also be well maintained in order to command a high resale value. Second-hand buyers don’t want to deal with pre-existing issues like oil leaks, worn-out belts or brake pads, or a bad exhaust system. Keeping all your vehicle maintenance receipts and documents can also positively impact your resale value.

MORE: 15 tips for long-term car maintenance

Rust

Rust can greatly diminish your vehicle’s resale value, but there are steps you can take to help prevent or delayits appearance: Have the car rust-proofed every year, particularly if you live in a snowy region where roads are frequently salted; keep the car’s exterior clean; and repair any small rust spots immediately.

a car parked in front of a house © Gertan / Shutterstock

Paint colour

Believe it or not, even the colour of your vehicle can impact its resale value. Current colour trends or preferences among consumers, the match between colour and make of car (black trucks are in demand, for example) and the rarity of a car’s colour can all matter. Severalsourcesreport that white is the most popular colour for resale vehicles.

Brand image

Some automotive brands are worth more than others on the used car market because they hold their value better. AutoGuide.comcites Toyota as a brand known for reliability and quality whose vehicles maintain their value well. Cars with a poor history of reliability fare less well in the second-hand market, even if the manufacturer has recently made improvements.

MORE: Car repairs: 25 tips to avoid going to the garage

Incentives and rebates

Sometimes automakers will offer incentives and rebates to help sell a new vehicle. The issue with this tactic is that it can negatively affect the car’s resale value.

“If the dealership needed to discount the car when it was new, it will be worth less on the used-car market too,” said AutoGuide.com.

Climate and location

Your geographical location can impact the sale price of your second-hand car. If you live in a climate that has snowy and icy winter weather, then practical vehicles with features like all-wheel drive will hold their value better than sports coupes and convertibles. Cars that are parked indoors may also offer a better resale value.

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