What will my car be worth?
There are a huge range of aspects that affect car value.
But there is one thing that rarely changes in the world of used car values: you will not get anywhere near the money you first paid for it.
There are, however, ways that you can ensure your car retains its value as strongly as it possibly can.
Some of these are to do with how you treat your car during your ownership of it, but many factors start to kick in at the moment you decide which car to buy.
We’re about to let you in on some secrets of realising the best price for your used car. In the meantime if you want to check out exactly what your car is worth today you can use our free online car valuation form.
Treating your car well will not hold its value. The make, model and colour you choose all affect its resale value
What is depreciation?
Depreciation is a hard word to spell.
But it’s an even tougher reality that all car owners have to face. It is the reduction in value that happens to almost all vehicles.
And the simple act of driving a car off a dealership’s forecourt sees its price drop.
There are a few notable exceptions, but these are rare collectors cars that rise in value the older they get. For the rest of us the trick is to beat the depreciation game by ensuring our used car’s value depreceates at a slower rate than others.
Here are some of the factors that can affect your used car’s value.
- Brand and model
- Age
- Kilometres on the clock
- Service history
- Condition
- Colour
- Safety and comfort features
- Modifications
- The general state of the car market
This car depreciation cheat sheet was a life saver when I came to buy my new car
Let’s take a closer look at some ways these can affect the price you get when you sell your car.
Colour
While most people advise you to stick to neutral colours, it seems that cars with rare colour schemes like yellow and green depreciate less over time. If you don’t believe us, check out the facts for yourself below.
Safety and Comfort
Cars with all the mod cons will have increased value, such as anti-lock brakes, power doors and locks, cruise control, a CD player/changer, an auxiliary jack, alloy wheels, a sat-nav and parking sensors.
Brand Reputation
Popular brands with good reputations have increased resale value due to higher demand. Check out our guide below to the most popular brands in Australia today and our lowdown on the cars whose value plummets fastest in the current car market.
Rarity
It’s the law of supply and demand. If your car is rare it can drive the value up as you will have less competition when selling.
Kilometres Per Gallon
Rising gas prices and environmentalism are causing concerned buyers to prefer fuel-efficient cars over gas guzzlers.
Body Modification
While to some people your car’s huge spoiler may be part of its charm, it could have a negative effect on its resale value.
This car depreciation fact file tells you everything that could affect your car’s value!
How much will my car’s value depreciate?
On average you can expect your car’s value to depreciate by 15-20% every year.
So after a year, your car will be worth approximately 80-85% of its retail price. And it’s downhill from here.
Your car loses about 20% of its value every year on average.
But not all cars are hit as hard as others.
Every new car loses at least a third of its value over the first three years, but many lose as much as half or even two-thirds. Just look at the variances there are.
Every new car loses at least a third of its value over the first three years, but many lose as much as half or even two-thirds.
Though car depreciation is unavoidable, you can minimize it by being smart about the choices you make when purchasing a new vehicle. Some types and models of cars command a much stronger used car value than others – significantly better in some cases.
Which cars hold their value the strongest?
Here’s a quick thumbnail sketch of different types of cars and their ability to hold or lose value in the Australian resale market.
German used car resale value
German car aficionados will be happy to know that these vehicles generally have high resale values, due to their stable pricing and model lines.
Japanese used car value
“M
ade in Japan” is a tag that will also be likely to ensure your car does well in the resale market, as these cars have a strong following for their quality. Changes are afoot, however, with Honda’s latest low-cost models that are manufactured in Thailand, such as Honda Jazz. The addition of lower-cost options to the new car market may begin to affect the future resale value of their Japanese-made counterparts.
Luxury SUV and performance car values
Luxury cars historically do well in the Australian resale market, despite their high fuel consumption. These types of vehicles are a not a common fleet choice, which ensures that they normally don’t return to the resale market early in life. This means that the demand for low-mileage used SUVs and performance vehicles exceeds the supply, raising their resale value.
Light and small car values
These types of cars are a popular choice for new and used vehicle buyers alike. Their low price, low maintenance c
osts, and low fuel consumption are all attractive factors. These cars are often in short supply in the resale market because they are often purchased new privately, and stay with their owners for an average of ten years or more. As with luxury SUVs, the demand for these vehicles exceeds the supply, causing the resale values to be high. This trend may change if more used vehicles are injected into the market.
Diesel used car value
Diesel engines are becoming increasingly popular in passenger vehicles, and these types of cars are in high demand on the resale market. Their low maintenance cost and higher fuel efficiency compared to gasoline models are two contributory factors to their popularity.
German and Japanese cars tend to hold their value better than other cars.
Car values: The most popular cars in Australia today.
Popularity can greatly help keep a car’s value higher. More popular and reliable models tend to be easier to sell and get a higher price due to buyer interest.
When it comes to trying to gauge potential depreciation based on popularity it is just as important to consider if the car brand is a rising star or a sinking ship. It’s not all about the number of cars sold but the car brands overall trend in the Australian market.
Ford looks like a bad brand to back, whereas Volkswagen models may sell less, but they look like they may hold their value for you when the time to sell your car arrives.
When considering buying a new car, you can refer to the latest (2015) list of the most popular car
brands in Australia to help predict which car brands will depreciate the least.
Find out the top 15 car brands in Australia right now
Here is the hard data for those who need all the facts and figures at their fingertips. The figures are for sales in Australia January to April 2015 (and for the same period in 2005 ago).
1. Toyota (1 in 2005)
2015 Sales: 64,285 (UP 8% on 2005)
2. Mazda (4 in 2005)
2015 Sales: 36,348 (UP 60.5% on 2005)
3. Holden (2 in 2005)
2015 Sales: 31,853 (DOWN 45% on 2005)
4. Hyundai (8 in 2005)
2015 Sales: 30,823 (UP 109% on 2005)
5. Nissan (6 in 2005)
2015 sales: 21,847 (UP 18% on 2005)
6. Ford (3 in 2005)
2015 sales: 21,565 (UP 18% on 2005)
7. Mitsubishi (5 in 2005)
2015 sales: 20,706 (UP 1% on 2005)
8. Volkswagen (13 in 2005)
2015 sales: 19,383 (UP 327% on 2005)
9. Subaru (9 in 2005)
2015 sales: 13,381 (UP 10% on 2005)
10. Honda (7 in 2005)
2015 sales: 12,205 (DOWN 20% on 2005)
11. Mercedes-Benz (11 in 2005)
2015 sales: 11,474 (UP 114% on 2005)
12. Kia (10 in 2005)
2015 sales: 10,184 (UP 18% on 2005)
13. Jeep (18 in 2005)
2015 sales: 9671 (UP 475% on 2005)
14. BMW (12 in 2005)
2015 sales: 7408 (UP 55% on 2005)
15. Audi (19 in 2005)
2015 sales: 7196 (UP 358% on 2005)
Want to see the which Australian car brands have been doing the best over the last 10 years?
The top car models for retaining their value
Of course, it’s not all about popularity. Perception has a hand to play too. Cars that are seen as reliable or are viewed as less expensive to maintain can really come into their own when a buyer decides how much they are willing to pay.
A car sold around the 3-year mark will get you an average of 45% of the original car value. However, you can get upward of 64% of the original price for certain cars.
A car sold around the 3-year mark will get you an average of 45% of the original car value. However, you can get upward of 64% of the original price for certain cars.
Choose wisely when picking your next car. To help you here’s a list of the cars that depreciate the least based on wholesale prices of three-year-old vehicles in average condition.
And following that one showing those that depreceate the most.
Cars With Best Value Retained
Small Cars
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Subaru Impreza: 65%
-
Mini Cooper: 61%
-
Mitsubishi Lancer: 59%
Medium Cars
-
Subaru Liberty: 58%
-
Mazda 6: 61%
-
Honda Accord: 53%
Large Cars
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Toyota Camry: 45%
-
Toyota Aurion: 42%
-
Ford Falcon LPG: 45%
4WD
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Nissan X-Trail: 64%
-
Subaru Forester: 63%
-
BMW X3: 61%
I used this list of cars that hold their value the best to decide on my new car!
Cars With Worst Value Retained
Small Cars
-
Kia Rio: 38%
-
Suzuki Swift: 38%
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Proton Savvy: 38%
Medium Cars
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Kia Optima: 37%
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Kia Magentis: 37%
-
Hyundai Grandeur: 37%
Large Cars
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Nissan Maxima: 37%
-
Ford Fairmont: 34%
-
Ford Falcon: 32%
4WD
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Land Rover Freelander: 42%
-
Land Rover Discovery: 40%
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Ssangyong Musso: 40%
Ouch! Best to avoid these car’s that lose over 60% of their value only a few years down the line…
Colour and used car value
Common sense has a lot to answer for. Common sense suggests that when picking a colour for your new car you should choose conservatively to help your car have the widest possible market when it comes up for sale.
Common sense is just plain wrong.
In actual fact, it’s those brash, bold, unusual colours that hold their value so much stronger.
Let’s take a look.
Find out what colour cars retain the most resale value – Turns out it might not work how you think…
As you can see black, grey, silver, white and blue cars actually lose value significantly more than the yellow, orange, teal, green and red cars.
So let yourself go wild on your next car. It will hold its value more it seems the bolder the colour you choose.
Splash out on a yellow Jeep and you could be dollars in!
And you know where to sell your car when you need to buy your next colourful creation don’t you?
