It is exciting to purchase a new car. The only frustrating part is how quickly a new vehicle depreciates. Even a popular make and model loses 10 percent of its purchase price as you leave the dealership, and another 10 percent by the end of the first year. The value of a car can drop an alarming 60 percent during the first four years of ownership. A less-popular model can drop even more.
These statistics are not etched in stone, because there are things you can do to preserve the trade-in value of your vehicle. Here are the main things that will help safeguard your investment:
- Professional detailing. Using high-quality cleaning products helps, but doesn’t guarantee good results. Only 10 percent of an auto-detailing job is based on the products – the other 90 percent is about technique. Quality cleaning avoids rust, fading paint, and other undesirable outcomes.
- Maintenance. The dealership will need to be able to demonstrate to the new buyer the remaining life of your vehicle. Savvy buyers ask to see maintenance records. Follow the manufacturer’s recommended maintenance schedule and keep detailed records. DIY maintenance is not viewed as favorably as professional servicing. Maintain the body as well as promptly taking care of dings and scratches.
- Interior cleanliness. Smoking in the vehicle and stains can damage resale value. Less than 20 percent of Americans smoke, and even they do not appreciate a car with smoke odors. You can reduce stains by not drinking or eating in your vehicle. If you do have a spill, clean it up right away.
- Interior condition. The sun is destructive to the interior of your vehicle, particularly vinyl surfaces. Parking your vehicle in a garage helps. Screens, window tinting, parking in the shade, and professional detailing that includes vinyl protection are also wise defenses.
- Mileage. A high-mileage vehicle will always command a lower trade-in value. Minimize miles by combining errands, carpooling, using a rental car for road trips, and using other modes of transportation whenever possible. Vehicle’s age is considered as well, but how it relates to the mileage has more weight.
- Customizing. Adding aftermarket parts or a snazzy paint color are part of the fun of owning a vehicle. Keep in mind that certain customizations may result in a lower resale value.
- Mechanical. Before you take your vehicle to the dealership, have it checked out by a reputable mechanic. The dealership is going to listen to how it runs. Knocking or other symptoms of a problem are going to result in a lower offer. An inexpensive repair could have a big return.
The dealership will assess the car’s value depending on which category the vehicle falls into – near new, extra clean, clean, average or rough. Mileage, the overall interior and exterior condition, and maintenance are critical to finding a buyer for your vehicle. If the dealership doesn’t believe it can sell the car for a profit, you might not even get a trade-in offer. If that happens, you’ll need to put the cost and time into finding a private buyer, which is never much fun.
About the Author:
Korey Adekoya works with Shabana Motors in Houston, TX. He runs the Shabana Motors Blog where he writes specifically about fixing bad credit and in-house financing options.