You must have thought of selling your car at some point in time. The amount in which your car will be resold at a specific time in the near future is called car resale value. The excellent quality of the car, the introduction of several reputed car dealerships, and the feasibility of buying a car of one’s own choice have made the car resale system more popular these days.
Certain things are considered, such as the car’s mileage, time of the year, economy, and many more. Also, note that the old insurance is not valid. The buy can however easily get a car insurance online for the car. However, it is important to understand the depreciation and resale value of the car before planning on selling the vehicle. This is because it is not only the look and structure of the car that matters.
Several other factors affect the performance, quality, and condition of the car that might affect the car’s resale value. In this blog, we discuss 5 factors that can affect your car’s resale value.
5 factors that can affect your car resale value
Third-party insurance is very important for your old and new car. However, while reselling your car, you must understand a few things that can affect the car’s resale value –
- Condition of the car
The first thing that a buyer check is the condition of the car. This means the buyer looks for a car in good condition while purchasing without any significant modification. However, many buyers accept any changes done to enhance the car’s look. So, if you have modified your car after a collision, that will automatically reduce the resale value, as it affects the original chassis. Therefore, try to minimise the modification in your car to avoid an extreme reduction in the resale value. You can do this by keeping all the mechanical and electronic parts, such as the gearbox and engine, wheels, tyres, battery, and electrical system, in place and in working condition. This will minimise the need to repair the car, thus reducing the maintenance cost.
- Make and model of the car
Car makes, and model plays an important role in the resale value. Reputed brands increase the resale value, whereas not-so-popular brands do not. This means reputed cars are sold more than ordinary cars. Thus, the popularity of these brands is high in the resale markets and shows the value for money. Also, if the buyer understands the brand well, they might offer you a good price, which is different for all buyers.
- Discontinued models: Many manufacturers stopped producing the car even though the sales were high, and the car has gained popularity for many business reasons. If you own these cars, there might be complications while reselling them. This is because, after a certain time, spare parts for cars are scarce. The buyer considers this at the time of purchasing the car. Thus, reducing the resale value of the car.
Many car brands stop their production due to low sales in the market due to the quality and design. So, if you own any such car you do not often see on the road, the chances of a reduction in the resale value increase. This will increase the outgoing money and decrease the incoming money – a substantial loss.
- Number of owners: The less is the number of owners, the more the resale value. Though depreciation is taken into account while calculating the price, it does not make the resale value extremely low. Fewer owners mean less repair and maintenance of the gear, clutch, and several components – which ultimately means the car is not abused.
Most of the sellers claim the car to be a single owner. This is because it increases the resale value of the car. Also, it is said that the cars owned by doctors and lawyers are mostly in demand and fetch high value – because of the stickers. Also, a well-maintained and regularly serviced car might fetch you more than one with several dents and scratches.
- Distance travelled: The car resale value is equally proportionate to the distance travelled by car. The more kilometres covered, the more would be the depreciation value. Also, the car which has travelled more will have some impact on how it functions. Also, the engine affects the car’s resale value. A car with a diesel engine has a higher resale value, whereas a petrol engine will have less value. Also, ensure you have valid insurance for your car. If not, it is advisable to renew your car insurance online before putting it up for sale.
Why is buying car insurance online for used vehicles important?
Whether you are using an old car or a new one, it is important to get mandatory third party insurance to protect your car against any liabilities that might occur due to damage to the third party vehicle or property. If you already have car insurance, always check the expiration date and renew the insurance on time.
Also, when reselling, you must transfer the car insurance online to the new owner. The transfer must be done within 14 days of the sale of the car. Usually, the third party insurance is transferred automatically. However, standalone or comprehensive car insurance must be transferred manually. If not done on time, the policy will expire on the 15th day – which means the new owners will not be able to make any claims in case of any damages caused to the car or third party. Also, if you do not transfer the car insurance online, the Motor Accident Claim Tribunal may order you to pay for the third-party damages caused by the car you sold.
Always maintain your car to fetch a higher resale value, as you do not want to face loss while reselling your vehicle. Also, remember to transfer comprehensive car insurance to the new owner, as third party insurance gets transferred automatically. However, you must always inform your insurance provider about the transfer.
Disclaimer – The above information is for illustrative purposes only. For more details, please refer to the policy wordings and prospectus before concluding the sales.