If there’s one thing that every car owner wishes to control, no matter the time, it would be car market value. This is because, at some point, everyone who owns a car would have to think about getting rid of their aged vehicles. Unfortunately, selling a used vehicle is not as easy as buying a new vehicle since the process relies heavily on the resale value of a car.
Here are the 6 biggest and most important factors determining how much your car is worth several years down the road. Read this and educate your friends and family who may be looking to buy a new car.
Age
The first and most obvious factor that decides your car’s resale value has to be its age. Studies have shown that a new car loses its value between 10% to 20% each year in the first five years. This means within the first five years from its manufactured date, the car will only be worth about 40% to 50% of its original value. So, the older the vehicle, the lower its resale value and vice versa. Ageing is inevitable, and so is the depreciation rate that comes with it.
Make and model
Some cars are worth more than others. This is primarily due to their make, model, colour variations, and features. The power of branding is a huge factor that determines how much your car is worth several years down the road. For example, Perodua, Proton, Honda, and Toyota have better resale value in Malaysia than continental cars that are less commonly used.
Within these brands, specific models like Myvi, Vios and City in specific colours tend to retain their value better than others. Likewise, cars with desirable features and options, such as leather seats, advanced infotainment systems, and safety features, tend to have higher resale values.
Cost-conscious buyers who want to save on fuel expenses may consider fuel-efficient cars. Fuel efficiency is another make-and-model subfactor affecting market value.
Mileage
Mileage is a crucial determining factor of car market value in Malaysia because it is a good indicator of wear and tear. High mileage suggests it has been used extensively, which can ultimately reduce its desirability and resale value, while low mileage does the opposite.
Keep in mind that odometer readings are one of the required details to calculate the worth of your car, as most new users prefer vehicles that are less used. So, keeping the vehicle’s mileage at a minimum is ideal if you intend to sell it within the first few years of purchase.
Condition
The interior and exterior conditions of a used car form the first impression among prospective buyers. A well-maintained car with minimal cosmetic and mechanical issues will generally have a higher resale value than one not taken care of. Clean interiors and a good overall appearance of cars matter for many people who want to buy cars, even if they’re buying a used one.
So, it’s imperative to keep the exterior and interior of your car in check. Torn leather seats, visible scratches, dents, faulty accessories, odour and stains are all the things you should aim to avoid. If one or more of these conditions are present, they should be fixed with the help of automotive professionals before listing the vehicle for sale.
Maintenance
Regular maintenance and service history indicate how well the previous owner cared for the vehicle. Believe it or not, an irregular and incomplete service history can hinder prospective buyers because they doubt the quality of the vehicle.
Logically speaking, a complete service history, including records of regular maintenance, repairs and modifications, can increase a car’s resale value, as it restores buyers’ trust and confidence in the quality of the vehicle. When the service history appears inconsistent, buyers can predict that the vehicle might run into other mechanical issues that require additional spending.
Damage history
A car with a history of damage, such as major accidents, can easily be negotiated with a lower resale value than one with a clean record and no significant damage. Car dealers and prospective buyers look at different types of damage to determine a car’s worth.
For example, flood history plays a prominent part in determining the resale value of cars in Malaysia, given the likelihood of flood occurrence here. Therefore, having a damage history report that proves a vehicle’s damage-free status is essential to avoid a potential drop in value.
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As you can see, the market value of a car is influenced by a combination of both tangible and intangible factors. While depreciation is a natural part of car ownership, it can be improved by making informed purchasing decisions and taking better care of the vehicle. Use your car wisely if you intend to sell it in the future.
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