Factors that influence your car’s value

When you buy a new car, it loses value the second you drive it out of the dealership.

In Australia, cars, on average, will decrease in value by 15 per cent each year for the first three years. With the fluctuating price of used cars, it’s important that you know the worth of your car to ensure that you’re getting the best deal.

There is a plethora of ways to get a car valuation which means it can be tricky to determine what is and isn’t a fair price in the current market. How quickly you want to sell, and the method of sale will also impact the car’s price.

It’s important that you know what variables come into play when determining the value of a car so you’re better equipped when looking to buy a new car or if you’re selling a used car.

So, what are the key factors that influence a car’s value?

Car age

 Age is the biggest factor in deciding the price of a second-hand car. As aforementioned, a car loses value quickly in the first few years of ownership and unless your car is a collector’s item, you’ll realise that a car’s value and its age are inversely proportionate.

Car model and make

Not all cars have the same level of prestige, which is why different models from different brands have different values. Higher quality and better-built cars are generally more popular. Commonly driven cars from reputable car manufacturers have a higher demand in the used car market in Australia and can have a higher value than others.

Car colour

Certain car colours can fetch a higher price compared to brighter or limited-edition colours. Axalta, a US-based coating company, released their report which revealed that white, black, and grey were the most popular car colours worldwide.

In Australia, 38 per cent of new cars sold are white. You’ll find that having a popular coloured car will pique the interests of potential buyers and will be easier to sell than say a green car.

Mileage

In Australia cars on average get 14,000 to 15,000 kms of mileage a year. The higher your odometer, the lower the market value.

Cars with higher mileage will have more wear and tear and are more likely to need more servicing and potential repairs. Mileage is an important ranking for prospective car buyers, and as such, the general rule is that a car with lower kilometres will have a higher value.

Servicing history

 If you maintain your car service logbook, the value of your car will have a boost. The logbook shows potential buyers the servicing and repairs your car has gone through, which translates to transparency and confidence for the buyer, so they know exactly what they’re getting.

Body type

 The body type of a vehicle will impact its value as Australians have shifted their preference to utes and SUVs. Utes will hold their value in the current market as they are mostly used for commercial purposes. SUVs have become popular with families and have a perception that they’re safer compared to sedans and hatchbacks, which contributes to their higher value.

Damage history

If you provide a damage history report for your vehicle, you’ll have a more favourable valuation and can attract more potential clients. A damage history report proves that the car hasn’t been in an accident and isn’t undergoing any major repairs.

Exterior conditions

Any external modifications to your vehicle will impact its market value. These changes include new paint, body kit upgrades, and tail wings. Inversely, if your car has any scratches, dents, or rust on the body, it will decrease its value.

Interior features

The conditions of the internal features of your car can increase or decrease its value. For example, the sound system, material of the upholstery, and safety aids such as a reverse camera and sensors, will have an impact on the value of your car.

Scratches and torn seats, non-functioning speakers and air-conditioning will decrease the price of your car. On the other hand, installing and adequately maintaining unique features like a reverse camera, upgrading the sound system, or a new infotainment system will boost the value of your car.

From the above, you should now be better equipped to determine the value of a car, regardless if it’s new, near-new or used.