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How to protect your car’s resale value

How To Protect Your Car’s Resale value

Purchasing a car is a major expense for most of us. And it can be daunting to think that your new car will immediately lose a big chunk of its value the minute you drive it out of the dealership parking lot.  But by planning ahead and taking care of your car, you can reduce the effects of depreciation and preserve its resale value for when it comes time to sell. Here’s a few simple steps you can take to make sure you get no nasty shocks down the track.

car2Step 1 – get the finance right

Car dealership financing can sometimes drive up the cost of the car, so it pays to ask us to shop around for the best loan deal that suits your plans and personal financial circumstances before you head out to the dealership. Additionally, getting your financing in place first will give you more bargaining power, which can help you save money on the initial costs.

Additionally, when structuring your loan, you need to select an appropriate residual value on your car finance (if any). What this means is that you should try and make sure that you don’t owe more on your car than it’s worth when it comes time to sell. So if you’re planning to keep your car for five years, try and make sure it’s paid out in that time period, or at least paid out to be in line with its likely resale value.

Step 2 – pay less

The less money you spend on buying your car, the less you will lose by depreciation. It may sound obvious, but many people will ignore this simple fact for the pleasure of owning something that is brand new and top of the range. 

Buying a demonstrator vehicle or last year’s model is a great way to reduce that first big value drop when you purchase a car. This option gives you the potential to save thousands up front. If you really must have the very latest new model, shop around for the best deal. 

Step 3 – buy smart 

Your new car’s eventual resale value can be greatly affected by the car you choose in the first place. You need to make sure that it will be highly sought after by used car buyers. Try to choose a brand of car that has a good reputation for quality and reliability. You may also want to avoid petrol guzzlers, trendy or obscure colours (white is the most popular colour in Australia), vehicles with a low safety rating and cars that have a reputation for being difficult or expensive to repair and service.

When you select your options for your new car, make sure they will add value in the long term. For example, it might be better to spend your money on additional safety features like side airbags rather than a larger stereo with sub woofers or a slick body kit.

Step 4 – care for your vehicle properly

A used car in pristine condition will have a greater resale value than one that has been neglected. But to claim that it’s in pristine condition when it comes time to sell will require evidence. That means you need to service your car regularly at a reputable and reliable service centre and keep accurate records as proof. 

To obtain the highest resale value possible, you will also need to look after the general condition of the car. Try to keep your car in a garage to protect it from the elements. Avoid smoking in your vehicle. Keep both the interior and exterior of your car clean and protect the paintwork with a good quality wax. If your car looks and smells new when it comes time to sell, you should get a better price.

Additionally, if your car suffers any accidents, knocks or scrapes, get them professionally repaired immediately. Leaving these issues can cause greater damage in the long run. 

Step 5 – consider when/how you will sell it

Generally speaking, you are likely to get a better price if you sell your vehicle yourself privately. But if you’re not confident when negotiating, or don’t have the time and patience to hold out for the best price, then leave it to the experts. Remember, you can often get a better price for your used car as a trade-in than just selling it to a dealership.

If you’re looking at purchasing a new car in 2015, we’re here to help you get the financing right. Asset financing is just one of the many loan types that we can help you source, so if you need financing for any reason, it pays to give us a call before you consider making any purchases. It’s a great time of year to look at getting yourself the car you’ve always wanted, so why not give us a call?

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