What you need to know about your car's residual value
Residual value is one of the most important factors to consider when buying a car and one of the most overlooked. While all cars depreciate, some lose much less value than others.
Motorcheck.ie recently analysed a cross-section of used 3-, 5- and 10-year-old car prices in various segments from 2010 to 2015 and found that in all cases the price for these cars in 2015 had risen sharply from the prices charged in 2010.
On average, it costs about 18pc more for a three-year-old car today than it did in 2010. This is most likely due to two factors: the shortage of stock has meant that used car prices are higher and the recovery in the economy means buyers can access cash more readily, either through their own means or by raising finance, so there is now more cash chasing a limited supply of used cars, which in turn pushes up prices.
So while cars today are retaining their value better than they were in the past, there are still factors you need to be aware of that affect resale values.
Brand: The brand you buy has a significant impact on the resale value and historically some brands and models simply hold their value better than others.
Paint colour: The most common colours found on Irish roads are silver, black and grey, so it is always safer to stick with one of these in terms of resale value.
Sunset Orange Metallic may be easily spotted in the supermarket car park, but it may be a difficult one to sell on.
Technology: In-car technology changes rapidly, so cutting-edge and expensive today may not add anything to the resale value by the time you go to sell it on.
Exterior condition: A regular polish and wax will make a huge difference to your paintwork.
Interior condition: To get the best price, it is vital to make sure that the interior is as spotless as the paintwork on the outside. Clean the seats, vacuum the carpet and polish the dashboard.
Mechanical condition: Service records are always valuable and the more guesswork you can take out of a car's history, the higher the resale value.