How Important Is Resale Value When Buying a New Car?
30th May 2020 – #3 in New Car Buying Tips
New car resale value is often given too much weight when making a new car buying decision.
Getting too caught up in the future resale value of a new car before you buy it is a bit like weighing yourself now in order to determine what your bodyweight will be four, five, six or ten years from now. Yes, we have the past to go by but ultimately what we eat, how we look after ourselves, and how much we exercise will have the ultimate say in what our weight will be in the future.
In other words, car resale value is very dependent on the condition of the car down the track, the kilometres travelled, and most importantly, when the car is actually to be re-sold.
It’s true that some cars are worse than others at depreciating but ultimately it’s wisest to consider, cost-of-ownership, that is, running costs such as petrol consumption, maintenance and insurance before resale value as its these cost of ownership components usually wind up having more of a financial impact over time.
New Cars Aren’t Assets
Contrary to some salespeople’s vocabulary new cars are not assets or investments, they are of course a liability. All cars decrease in value apart from some very rare classics.
The question is not: “What will the resale value in X years?”
The questions to ask ourselves are:
1. How long will I be driving/owning this car?
2. Is this the car I’ll be happy owning and driving for this period of time?
And 3. Can I afford the running costs (and payments) over this time period?
Our new car research page has some great tips for helping you determine the best new car for you and a car payment that will best suit your budget and lifestyle.
New Car Resale Summary
By and large, if a car is cheaper now than a competitive model (when new), it will sell for proportionally less later. Ultimately, time passed, distance travelled and condition will have the predominant influence on resale value.
If you’ve decided on the new car model you’re buying and you’d like to get the best price, click the link below.