Buying a Car? Here’s When Resale Does (and Doesn’t) Matter

When buying a new car, should you consider the resale value?

It’s an important question to ask yourself as you research and shop for your next car. After all, you’re presumably going to sell or trade that new car at some point down the road.

Let’s start with the basics: What is resale value?

Resale value is, as the name implies, how much your car will be worth when you sell it or trade it in. This number depends on a laundry list of factors, some of which you have no control over.

Good Bets for Resale Value

Resale value is something to keep in mind when you shop for a new car — you can gain a little peace of mind knowing you’ll get top dollar for your car when it’s time to move on. It could even be a tiebreaker if you’re torn between two models.

In general, luxury brands and those with good reputations have higher resale values. The same goes for trucks and SUVs — for example, if fuel prices fall, there will be increased demand for trucks and SUVs. As more are sold new, their resale value increases. Resale value does fluctuate along with consumer taste, so used-car prices change over time. Should gas prices spike or trucks and SUVs fall out of consumers’ favor for some other reason, their resale value will fall.  

How to Increase or Maintain Resale Value

Having resale value in mind may affect how well you maintain your car. A well-maintained vehicle could be worth more when it’s time to sell or trade. And if you know there’s a payoff in resale value awaiting, you may be incentivized to be vigilant about maintenance.

Of course, you should keep your car well maintained no matter what — especially if you plan to keep it for a long time — but now you have yet another reason to keep up with oil changes and other routine maintenance, and addressing any problems that crop up.

You can, of course, potentially raise or lower the value with modifications to your vehicle.

Adding an aftermarket part that addresses longevity or reliability issues with the original equipment could enhance its resale value in the future. But use caution with aftermarket parts, as some overly personalized modifications, such as aftermarket wheels or ground effects, can lower resale value.

Some options may help you maximize resale value, including air conditioning, an automatic transmission, a moonroof and leather upholstery. If you are in the market for a sports car, a manual transmission could help increase its resale value, as sports car buyers may be more interested in a stick-shift than an automatic.

If you plan to get a new car every two to three years, you’ll want to pay attention to resale value. This will help ensure it’ll be worth more when it comes time to trade or sell it.

Why You Might Not Consider Resale Value

Resale value is just one of many considerations to take when purchasing a car. Others, like fun-to-drive factor, utility, styling, fuel economy, reliability, warranty, customer service of brand or dealer, etc., may matter more to you

For example, if you’re more interested in how much you’ll enjoy owning a certain vehicle, then resale value down may not matter much..

Additionally, If you plan to keep your next ride until it’s one step from the junkyard, resale value isn’t going to matter much. Unless it’s in great shape after a long life, you likely won’t get much for it.

However, it’s worth noting that a vehicle’s depreciation doesn’t happen at a constant rate. A car’s rate of depreciation slows each year, making it more cost effective to own as time goes on — at least until repairs become too expensive.

If you’re into classic cars, resale value may not be top of mind. Even in great shape, an older car that’s not a collectible won’t have a great resale value – although there may be exceptions based on model and brand.

If you’re budget conscious or focused on your monthly payment, that may matter more to you than resale value three years down the road..

Factors Beyond Your Control

The tricky thing is, outside of keeping your vehicle well maintained and avoiding damage, there’s not much you can do to affect resale value.

For example, if you buy a sedan, but trucks and SUVs become more popular than sedans before you sell, your car’s resale value may drop. Same thing applies if you buy a vehicle that has poor fuel economy and gas prices spike.

A brand’s reputation for reliability and customer service also plays a part, as does a vehicle’s popularity when new. So, too, do the vehicle’s maintenance and repair costs.

There are other minor factors that play a part, as well, such as the popularity or usefulness of a vehicle where you live. A sports car might not have as high of a resale value in the Snow Belt as it would in the Sun Belt.

Resale value is one of many factors to include when buying a new car. Depending on your personal wants and needs, you might find yourself happily pocketing a little more money when you sell or trade your ride.

Tim Healey is a freelance writer who likes quirky cars that may not bring in much resale value.