The Nine Things That Affect Your Car's Resale Value

July 23, 2012

Some drivers obsess on it from the day they drive their new car off the lot--and some don't give it a thought until it comes time to move on to a new set of wheels.

Either way, both drivers face the reality of resale value, and it can be either a pleasant surprise or a cold wake-up call.

Resale value is something of a black art, mixing a car's age, its mileage, general condition, and equipment levels with less straightforward factors like popularity or supply. Most of the things that bring down resale value happen over time--but some of the features and fundamentals that can boost resale value or knock it down can be determined before you even leave the showroom.

It's simple to see how regular maintenance pays off in the end, for example--but you could be in for a surprise if you've chosen some features that weren't common just a decade ago.

To stay in control of resale value, know how these factors affect it:

Brand. It's the painful truth for fans of some exotic brands, or even some popular nameplates known less for reliability. The first name of a vehicle can have a tremendous effect on its resale value, regardless of the condition or quality of the vehicle in question. Certain British and German vehicles are known for rapidly shrinking value, but some of the smaller Japanese nameplates lose their worth just as quickly. Among the best? Subaru, Honda, Hyundai, Mazda, and Toyota rank atop the mass-market brands according to residual-value forecasting company ALG, while Lexus, Acura, Infiniti, Mercedes and Audi fare the best in the luxury arena. These brands can retain more than 60 percent of their value after the first three years of ownership, while some vehicles from those other brands can fall to as little as 35 percent of their new value in the same time.

Drivetrains. Some buyers may like to shift their own gears, but most buyers don't. Should you deduct value ahead of time if you order a manual transmission? "This comes with a big 'if,'" says Eric Lyman, ALG's Vice President of Residual Value Solutions. "If you're selling a performance sports car where enthusiasts and adrenaline junkies make up the majority of buyers of these types of vehicles....sometimes the manual transmission can be more valuable than the automatic."

In general, an automatic transmission will recoup its cost, typically between $1000 and $2000. "Automatic transmissions nearly pay for themselves as the used market value is generally comparable to the new car price of this option," he adds.

Then there's the choice between all-wheel drive and four-wheel drive. "Except on rear-wheel-drive sports cars, all-wheel drive tends to add about $1000 on passenger cars, a bit more on utility vehicles and up to a few thousand on pickup trucks. Depending on the price in the new market this can be a worthwhile upgrade. This is especially true in regions where inclement weather makes all-wheel drive a valuable safety feature."

One surprise? All-wheel drive now shows up as a worthwhile resale item in the southern and coastal states, where wintry weather isn't a concern. "Even in the 'smile states,' all-wheel drive can add sporty driving dynamics to a front-wheel-drive vehicle, while also adding safety in the occasional downpour," Lyman explains.

Paint color. It can bring you down--or send you sky-high, in terms of resale value. If you don't get white, silver, or black, on a traditional Camry or E-Class, you're risking a slower sale--but the color palette on most mainstream cars isn't that gutsy to begin with. Put a Sunset Orange Metallic hue on a Honda Element that's already discontinued, or go with metallic purple at the custom-paint shop, and you could be looking at not selling the vehicle at all, for lack of interested buyers.

However, picking the right collectible color on your new sportscar can send the appreciation curve through the roof. Consider the 2013 Hyundai Veloster Turbo, which offers a $1,000 matte paint job and a hand-wash kit. If kept in excellent condition, it's likely to recoup all of that cost, since it's a limited edition--but in poor shape, that matte paint could just be a thousand-dollar liability.

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