Buying Guide

9 Factors Determine your Vehicle’s Residual Value

Expected Price of Your Car

Residual value is the future value of any object. A car’s residual value is the future selling price of the car. For instance, you bought a car in 2020. The expected price of your car in 2022 is known as the residual value. It is also known as the salvage value of the car.
The price of the new car you buy does not remain the same. It decreases rapidly. Even if you simply drove out the saleroom, your automotive falls within the class of pre-owned cars and its price decline. Some vehicle’s value declines rapidly. This varies from manufacturer to manufacturer. Apart from this, there are a number of factors that may increase the decline rate to several folds.
Are you aware of those factors that decrease your vehicle’s residual value rapidly? If not, then this article can help you a lot.

The following are the 9 factors that determine your car’s residual value.

Model and Manufacturer Factors effect on the residual value of the car

Today is the era of brands. Everyone is brand conscious. Perhaps this is the reason that Car manufacturer or brand has a great impact on the residual value of the car. The manufacturer or brand of the car is also linked with the region where you are living. For instance, the residual value of two cars of the same model and the same manufacturer declines at a different rate in Asia and Europe.
Manufacturers keep on adding advanced features and utilities in new models of the car. That’s how the model of the car affects the residual value of the car.

Alterations impact on the Residual Value of the Car

Any change that you make in your car will impact the residual value. It may enhance or decline it.

  • What type of alterations increases your car’s residual value?
    All the changes that make your car more efficient, more comfortable and more appealing will
    cause an increase in the residual value.
  • What type of alterations decreases your car’s residual value?
    All the changes that affect the warranty of the car and make it uninviting and nasty decrease its
    residual value.

Car’s Residual Value with warranty

Some manufacturers offer very good client service after the purchase of a vehicle. As compared to others, who bother to welcome back their customers warmly. This thing can also affect the residual price of your car. Purchasers also consider this thing when you are selling a car with some warranty left.

Maintenance Service History Impacts on Car’s Residual Value?

Everyone wants to assure the car’s maintenance before purchasing. A car’s service history is proof of, how well you maintained your car during use. So a car’s service history will increase the residual value of your car. The good service history is also linked with a good service station. The service history of certified service providers will have a good impact on residual value.

What are the effects of Car’s Outer Look?

The outer look of the car should be appealing and free of dents, lines, and scores. If there is any dent or score on your car, it will decrease the residual value.

What are the effects of Car’s Internal Look?

A good internal look indicates the good maintenance of the car. It increases the residual value and also has a good impact on the buyer. If your car seats are torn or have spots, it will give a negative impression.

People like the most common colors of the car

The color taste of every person is different. Some like bright colors, others like dull or decent colors.
On average, most people like cars with common colors like blue, gray, black and white.
So if your car color is unique or vivid, it may hinder the car’s resale.

How does mileage affect the residual value of a car?

As the distance traveled by car increases the residual value decreases. It is so because of the
more your travel, the more damage can occur, which decreases the residual value.

How Old is your Car?

The residual value of the car usually decreases as the age of the car increases. However, the reverse
can also occur in some cases. An older car is difficult to insure. Insurance rate increases with the
age of the car. That might be another reason for the decline of residual value.


saeed rana

I was the executive vice president of the General Insurance Company. With that I also mentor students to help them find and apply for international scholarships each year, Due to extensive practice in vehicle insurance, their claims, and all sorts of interest in vehicles; today it became my passion to write research articles on vehicles.

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