How do I increase the resale value of my car?

How do I increase the resale value of my car?

motomatch / 10 February 2022

Some elements – such as the make and model, and the market – are out of our control. But how a car has been maintained and looked after is a major contributing factor, and that is something you can plan to do well.

Which cars have the best resale value in South Africa?

First things first, check whether or not your vehicle model and make has a good resale value within the South African context. The cars listed below retain over 80% of their original listing price after 12 months. We haven’t ranked these because buying patterns shift all the time, based on certain trends and economic factors. It is worth noting, however that if your car is not on this list, it doesn’t mean that it has no resale value, just that it’s slightly lower than some of these brands.

  • Volkswagen Tiguan
  • Volkswagen Polo
  • Volkswagen Golf
  • Toyota Hilux
  • Toyota Fortuner
  • Kia Picanto
  • Kia Rio
  • Isuzu KB/D-Max
  • Renault Kwid

How do I get a good price on a used car?

One of the best ways to increase the resale value of a car is to look after it. The market for second-hand cars in South Africa is huge, but everyone still wants value for money and to have confidence that their purchase isn’t going to breakdown the moment the transaction is through.

Here are eight key ways to improve the resale value of your car, in general and just before you put your car on the marker:

  • Keep all your service or repair records so that they are on-hand for potential buyers to check
  • Keep the car well maintained. Little things that break can turn into big problems over time. Have a slush fund available for these fixes.
  • Before you put your car out there for resale, fix whatever flaws you can
  • Check that the spare tyre and tools are in good condition and stored safely
  • Get the car washed and polished by a reputable company
  • Clear the car of any rubbish and clutter and get the upholstery looking as good as possible. Make sure the inside is neat, clean and smells fresh
  • Your license disc should be up-to-date, and all your documentation ready
  • Take at least 5 photos of the car (front, back, sides and interior). Take the photos in daylight with a background that is not too busy. They should be clear and an accurate representation of the vehicle

Is there anything that will negatively affect my car’s resale value?

If you plan to resell or trade your car in the near or far future, you need to be aware that there are some things (other than the market) that may decrease your vehicle’s resale value:

  • High mileage. The older the vehicle, the higher the mileage will be – that goes without saying. But buyers will be very wary of a car that has a mileage that is not proportionate to its age
  • Unchecked wear and tear. If a car has not been well looked after, it will be quite obvious once it goes through inspection. You may still be able to sell it, but expect to lower your price drastically if there are major fixes necessary
  • Modifications. This goes for body modifications, performance enhancements, light changes, aftermarket rims and louder exhausts. Modifications affect the resale value of a car for the simple reason that buyers are wary of out-of-the ordinary changes. You may find some interest for these modifications, but your audience will be limited. Also keep in mind that some modifications mean that insurance premiums are higher, which is unattractive to most buyers
  • Unusual paint colours or resprays. Metallic and bright colours just don’t sell as well as more traditional colours. This could be because it is just not to everyone’s taste, or because any resprays will be expensive.
  • Accidents that have affected the body or engine of the vehicle substantially (even if you’ve patched up the evidence)

Trading a car in

How do I increase the trade in value of my car?

  • Trade it in before the mileage hits 100,000kms
  • Dealers prefer cars that are under 10 years old. There are a few reasons for this but one of the main ones is that cars over this age are not eligible for finance, making them unattractive to some buyers
  • When it is still under warranty
  • Keep all service history and maintenance receipts

What are some of the things I need to know before I trade my car in?

There are a few things to keep in mind:

  • The price you get for your car will be related to its book (or market) value, not its retail value. The book value is the price for which you would be able to sell the car to dealers and is influenced by all the specs of the vehicle, as well as what other similar vehicles are currently sold for. The retail value is what the dealer plans to sell the car for, and this number is usually much higher than the book value. You will need to do research and understand what your car’s book value is. Get valuations from some reputable dealerships (even ones you don’t plan to actually deal with) or from a car valuation tool so that you know what to expect and have more knowledge to negotiate with if need be
  • It’s best to negotiate the price of your old car separate to the new car you’re looking at, so that the dealer doesn’t let this to influence what they offer you or what they charge you for the new car
  • Get your paperwork in order. Make sure you’ve got proof of ownership and any receipts or books related to service history and maintenance. You’ll also need to have any relevant financial documents handy

How do I trade my car in if I still owe money on it?

Ask your bank what the settlement amount on the vehicle is (this is the amount that is still outstanding on the car). You need to know exactly how much it is before you approach a dealer. It may be useful to request this in a letter, so that you can show it to the dealership.

Once you know how much you owe, and what your spending budget is, you can approach a dealer of your choice.

When planning your calculations, consider that this settlement amount will be subtracted from the credit amount the dealer offers you. The dealer will then pay off your remaining loan amount and give you a credit for the value of the car you’re trading in. So, if the value of your car is more than the amount of your loan payoff, this amount will be subtracted from the credit offered towards your new car. E.g., if your trade-in vehicle is worth R350 000 and you still owe R300 000, you will only get a R50 000 credit towards buying a new car.

If the value of the car is less than the amount of the payoff, the difference (called negative equity) will be added to the cost of your new car. For example, if your old car is worth R80 000 but you still owe the bank R100 000, the difference will be added to the price of the new vehicle you purchase.

To summarise, if you are planning to trade your car in, you need to factor in the settlement amount you owe so that you know what needs to be paid to the bank. The dealership will do this, as ownership of the vehicle will transfer from the bank to them; remember that this amount will come off the amount the dealership offers you in the end.

Good luck with selling your car!

For more info on when to trade your car in, read this helpful article.