Whether you are selling, trading or want to know your vehicle’s value, it’s important to know the factors that affect car’s value. Vehicle values can change over time, and, of course, depreciation is inevitable, but some are more impacted than others. Many car buyers pays cash for cars based on their make, model and conditions.
In this blog, we will break down the four factors that affects car’s value the most, so you can make the right decision and maximise your return on investment.
Understand Factors That Affect Car Value
Here is the detailed explanation of factors that affect car’s value:
Age of the Vehicle : The biggest factor factors that affect car value is age. Most vehicles will begin to lose value the moment they leave the dealership, with this drop in value being known as depreciation. A new car loses about 20-30% of its value in the first year, on average, and up to 60% after five years. Newer cars typically hold their value better because of modern features, fewer kilometres, and fewer mechanical concerns.
Mileage : Mileage is a direct reflection of how much the car has been used. It is a significant factors that affect car’s value. The more miles on the odometer, the lower the value tends to be. Cars with high mileage often indicate more wear and tear, potential upcoming repairs, and shorter remaining lifespan. Scrap car buyers generally prefer cars with lower mileage because they are seen as more reliable and have a longer road life ahead.
Vehicle Condition : A car in top-notch condition – mechanically and aesthetically – will always resell for a more favourable price than a car with dents, scratches, and mechanical issues. Everything from a paint job, tire, inside cleanliness, and engine will affect how a buyer perceives the value of your used car. Even minor things like a check engine light on, brakes that need to be replaced, and stained upholstery will devalue your car.
Service and Maintenance History : An up-to-date maintenance history can greatly increase your resale price. When a buyer sees that a car has been maintained regularly, serviced, and undergone oil changes, tire rotations, brake checks, and manufacturer-recommended schedules, they will be more likely to view the vehicle as reliable. It will also show the buyer that the owner took good care of the vehicle, and reduce the uncertainty of other hidden issues with other used vehicles.
Accident History and Vehicle Title : A car that has been in a serious accident or has a branded title (salvage/repaired) will have a significant decrease in value. Even if the car has been repaired, the fact that it was damaged in the first place can serve as a red flag for potential buyers. On the contrary, a clear title and an accident-free history boost buyer confidence and will help you retain more of your car’s total value.
Make and Model : Some makes and models will hold value better than others. Cars from manufacturers that have a reputation for reliability, like Toyota, Honda and Subaru, tend to have a slower depreciation rate. In the same vein, certain makes and models may also gain acceptance in the used-car population because of a reputation for good gas mileage, low maintenance costs or reliability in general.
Market Demand : Car values can also vary based on demand in your local area and at the national level. For example, SUVs and trucks are often more in demand in rural areas or during the colder months. Simply being in a region with lots of urban environments means that compact cars may sell better in the cities. Gas prices and the economy also factor into the importance of demand; when gas prices rise, fuel-efficient cars are often worth more than their gas-guzzling counterparts, and several other seasonal trends. If you have a convertible, there may be more demand than at other times of the year in the spring and summer months.
Features and Options : Extra features can always add to a car’s value (especially if they are in working order). Some popular options can add value, such as:
Leather seats Sunroof or moonroof Backup camera and parking sensors Navigation system Bluetooth connectivity All-wheel drive (in certain climates)
However, keep in mind that some luxury or aftermarket features may not always increase value significantly unless they’re in high demand.
Colour and Appearance : Colour can affect resale value more than you think. Neutral and classic colours like white, black, silver, and grey, usually retain value better than bright and unusual colours. This is due to not appealing to a small audience. Again, colour alone will not sell your car, but it can provide a slight advantage for your car – or a slight disadvantage!
Fuel Efficient and Powertrain Type : It is also an important factors that affect car’s value. With rising awareness of fuel economy and environmental concerns, fuel-efficient vehicles are usually more popular. Since hybrids, plug-in hybrids, and electric vehicles (EVs) are fuel-efficient, they may retain more value, especially in areas where fuel prices are high or there is an EV infrastructure. EVs are still depreciating at varying rates, mainly due to model and battery condition.
Conclusion
Understanding factors that affect car’s value the most allows you to make informed decisions, both with your current vehicle or when preparing to sell. Age, mileage, condition, and accident history are the top factors, but how much or if others want the car and features also influence value.
