Why the resale value of your car matters
When it comes to resale value, not all cars are created equal. Reputable brands consistently dominate the pre-owned market. Here’s why:
* Proven durability and reliability: Think of brands like Honda and BMW, they’re practically synonymous with quality engineering. Reliable car brands have spent years refining their designs, ensuring their vehicles remain dependable even after extensive use. This reputation boosts resale value as second-hand buyers know they’re purchasing a product that will continue to perform well.
* Strong brand reputation: Auto enthusiasts and average buyers are drawn to brands with iconic recognition. Companies like Audi and Porsche have built their prestige through superior craftsmanship and innovation, translating into high resale value for their vehicles.
* Spare parts availability: A key contributing factor to the resale value of cars from trusted brands like Kia, Volkswagen, and MG is the ease of maintaining them. Spare parts are widely available and these manufacturers have robust service networks worldwide. This keeps repair costs low and gives future buyers confidence.
* Consistent market demand: One of the biggest advantages of purchasing vehicles from world-class brands is their steady demand in the used car market. For instance, MG and Foton trucks are especially known for offering great utility, making them always sought after by pre-owned buyers.
To illustrate the real-world impact of resale value, consider this example:
• Brand A (Renowned): Say you buy a Kia SUV for $6m. After three to four years of use the car still fetches $4m on the used car market. That means it has retained 66 per cent of its value.
• Brand B (Unknown): You purchase an unknown-brand SUV at a tempting price of $6m. However, when you try to sell it after five years, the best offer you can find is $2m — a mere 33 per cent of its original value. This poses major issues if you financed with a bank, as most do, and still owe more than the value of the car.
By going with the recognised brand you not only keep more money in your pocket in the long run, but also enjoy the peace of mind that comes with owning a vehicle backed by industry-leading quality and reliability.
To make the most out of your car investment, follow these tips:
1) Research resale trends
2) Choose proven brands
3) Consider total ownership costs: Factor in maintenance, fuel efficiency, and spare parts availability — not just the sticker price.
4) Talk to dealerships to get insider knowledge on which brands perform best in the local market.
5) Invest wisely: Your car is more than a purchase — it’s an investment. Remember, the cheapest option upfront isn’t always the most cost-effective over time. Paying a little more for a reputable brand can save you money in the long run.
6) Protect your investment: Some dealers offer value-added products such as extended warranties and paint protection. Consider adding these products to your purchase at the dealership to add even greater ‘resaleability’.
When it comes to cars, the appeal of cost-cutting can lead to costly regrets. While lesser-known brands may lure you with low prices, the uncertain reliability, lack of a resale market, and rapid depreciation can outweigh the initial savings. Trusted brands offer a proven track record, market demand, and exceptional resale value.
Choose wisely and you’ll enjoy not only the thrill of owning a reliable and stylish vehicle but also the financial security of making a sound decision.
With the rise of lesser-known brands flooding the market, their tempting price tags might make them seem like a fantastic deal. However, these low-cost options often come with a hidden downside — unpredictable reliability and poor resale value. Simply put, investing in vehicles from reliable, well-established brands can pay off when it comes time to sell or trade in your car.
David Seivright is finance manager at ATL Automotive.