5 Things That Will Hurt a Used Car's Resale Value

Not being prepared when it comes time to sell your used car will hurt its resale value. There are five things you can do that could earn you hundreds of additional dollars on the price of a used car you are selling.

1. Not Keeping a Used Car's Maintenance Records

You should really keep every maintenance record from the first time you buy a new car. The same is true if you have bought a used car. Keep all the maintenance records for it from the time of purchase. Savvy used car buyers are going to know when you bought your car based on a purchase of its vehicle history from either Carfax or Auto Check. Not being able to produce maintenance records could indicate you don't maintain your used car, which is going to lower its value.

2. Any Sign of Children When You Are Selling It

It's true - most people associate children with messy vehicles. It's almost impossible to keep them clean whether it's because of misplaced toys that melt or food and drink spills. Get your car professionally detailed before selling it if you have a family. Kids are great, but most folks don't want to own a used car where children have lived.

3. Selling a Used Car with a Mechanical Defect

There's a legal axiom that a lawyer never asks a question in court without knowing the answer ahead of time. Yet, people will sell their used cars without knowing its true mechanical condition. There are a couple of options here. The first would be buying a CarMD. You're going to want one as you look for used cars. Start off by using it on your own used car. It will give you a report on potential problems. Don't be surprised if prospective owners show up with one. The second thing you can do is have your used car inspected. A certified mechanic will come to your home and inspect your car and tell you what's wrong with it. You can then decide if you want to get the work done, but at least you will know what problems your used car might have.

4. Customizing Your Used Car

Let's say, for example, you own a Dodge Neon. You've invested a lot of money into it for a huge spoiler as well as large wheels, a souped exhaust system and a special suspension. You then go to sell it and find an extremely small market for the car. "But," you sputter, "it's in perfect shape. Why aren't people buying it?" You've created a niche vehicle. And, within that niche of people who might buy it, you've narrowed things even further to people who want to buy a car customized exactly how you like it. It's difficult to sell these types of vehicles if you are in a hurry. Strip the car as much as possible when you are selling it back to its original parts if you have them.

5. Posting Videos Involving Your Used Car

Here's something most used car sellers don't realize: smart shoppers will Google your name and car make and model just to see what pops up. So, your buddy videotaped you racing another friend in an industrial park. That's going to show up on a search engine. Same thing is true if you were driving the car and arrested by the police. A DWI article will include your name, as well as the type of vehicle you were driving when stopped.


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Predicting What A Used Car Will Be Worth

Do you have your eye on a new car or truck that has just been introduced, but you know you can’t afford it new? Well, there is a simple formula for predicting what a used vehicle is going to be worth three years down the road.

The first fact to consider is almost all used cars, trucks, SUVs and crossovers lose a minimum of 24% of their value after 12 months. That’s based on the Manufacturer Suggested Retail Price.

To keep things simple, a used car costing $20,000 would be worth $15,200 after one year. So say the folks from Black Book (www.blackbookusa.com). It sounds like a dating sight, but it’s actually the number one resource for predicting a car’s residual value when it goes on sale. That’s extremely important for setting leasing rates.

Then, from the basic 24% drop in value, you can start deducting 6% a year. A decent used car, introduced with the price of $20,000, would have an estimated value breaking down this way:

•After 12 months: $15,200

•After 24 months: $14,288

•After 36 months: $13,430

•After 48 months: $12,624

Of course, this formula will not work 100% of the time because some cars and trucks have residual values that drop like stones after 12 months. Case in point would be the Chevy HHR.

• 2009 Chevrolet HHR LT - $20,729

• 2008 Chevrolet HHR LT - $11,225 dealer price, according to Edmunds.com.

That’s a drop of 46% in one year. Wait two years and you’re looking at a $10,551 vehicle. Proving pretty much if you want a Chevy HHR, buy a used one. You are going to save a ton of money.

Use this basic formula to help you get started on what the value of a used car should be. It will save you from spending too much on your next used car or it will help you put aside the right amount if you’re a good saver!


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