Is it time for you to buy a new car? Well, that usually means you'll also be selling your existing car -- or at least trading it in. If you've done everything right over the years that you've owned your present car, you'll likely get the best price (or trade-in value) for it. But if you've been careless or neglectful you could be in for a rude awakening. You could be offered what may seem like a pittance for the car that looked so shiny and new just a few years ago.
The situation can get worse if you're in dire need of a new car immediately. In this case it might be too late to correct some of the mistakes you've made when it comes to car care. But there are still some steps you can take to improve your car's resale or trade-in value.
To get some tips on how to make your car look good in the eyes of its next owner, we spoke to Jack Nerad. He is the executive editorial director and executive marketing analyst for Kelley Blue Book, widely considered, "the bible" of used car resale and trade-in value.
Nerad said the most important factor is one you should have considered when you bought your car in the first place: Certain models just have higher resale or trade-in value. It's important when buying or leasing a new car that you do your homework to find out which brands or models best maintain their long-term resale or trade-in value. Cars that win the highest quality marks when they're brand new are also going to hold the most resale or trade-in value at the back end.
"A lot of this has to do with consumer perception," Nerad said. "And a lot of that clings to brands or models based on whether they have a good reputation for quality to begin with. If you buy a brand or model that has a poor reputation for quality and resale value, you're not going to get a good price for it four or five years later when you want to sell it, no matter how well you've maintained it."
To help buyers make good choices along these lines, Nerad points to Kelley Blue Book's "Resale Value Awards Program," which ranks cars based on resale value. "Generally, some brands are consistently pretty highly-regarded when it comes to quality and resale value, like BMW, VW, Honda, Acura, Toyota. Those are top-sellers to begin with, and have good reputations."
After you've made your choice, there are many steps you can take to ensure your car retains its resale and trade-in value over the years. One of those, notes Nerad, is rather obvious: make sure you maintain your car properly. Get the oil changed on schedule and maintain a diligent routine-maintenance record. And, just as important, keep your maintenance records.
"That's always a worthwhile thing to do, because once you lose those records, you can't go back and re-create them," Nerad said. "It will really give the prospective buyer peace of mind if you can prove that you have taken good care of the car, and that you changed the oil -- or that the car doesn't have the original oil in it."
Yikes. People really do that? Not change the oil over four or five years?
"You'd be surprised, especially if it's a leased car," Nerad replied.
Picking a popular color also helps. "Some people like to personalize their car by picking a wild color, like pink or something, but the fact is, most people aren't going to want a pink car," Nerad warned. "You can get away with more expressive colors with sports cars -- like, red is a good choice for a sports car, but probably not for a family sedan."
The whole notion of personalizing the car when you make your original purchase also comes into play when considering what options to add. "If you're buying a sedan, it's probably not a good idea to go with a six-speed manual transmission," Nerad cautioned. "You might dig it, but the next guy probably won't. Conversely, if you're buying a sports car, going with an automatic is not the best choice, because most people who buy sports cars like to push it a bit by using a stick shift."
The options you choose when buying your new car -- again, keeping its resale and trade-in value in mind -- are sometimes dictated by the market segment. "If you're buying a Scion, for example, you can get away with some expressive customizations, because that's a youthful segment, and the next guy who buys a car like that will probably appreciate those touches," Nerad observed. "But in segments that are less youth-oriented, it's best to stay with conventional standard equipment, or popular options like anti-lock brakes and leather seats," he added. "Those things cost a bit more up front, but those are the kinds of options that can definitely give you a decent return on your investment."
When addressing the topic of customizing your vehicle, it's helpful to address the sound system.
"It doesn't make a lot of sense to put a $6,000 stereo system into an $18,000 car," Nerad said. "You may like it, it may be great fun for you, but you're not going to get your money back on that kind of investment." Once upon a time, overly-ambitious car-stereo installers also caused resale problems by carving big holes in door panels and kick panels for large speakers.
"But these days we don't see the kind of butcher jobs we used to see in the 1970s and '80s," Nerad said. "They do a much better job of integrating after-market sound systems these days, but again, if you go overboard, the next person might not see it as a big benefit."
Nerad said the basic rule on personalizing your car is this: "Keep in mind that just because you like something different, or wild, or expressive, that doesn't mean the next guy will. So, generally, personalization has more downside than upside."
And while "curb appeal," the impression the prospective buyer gets when seeing a car's exterior for the first time, is important, it is unwise to neglect the interior. "Remember, people spend most of their time inside their car, not outside looking at it," Nerad said. "And these days, with traffic congestion and commuting time in big cities being what they are, some people are in their cars two or three hours a day -- so that's a lot of time to come to hate the interior if it has problems."
"Stained carpeting and upholstery can really drop the value," Nerad stressed, pointing to a study Kelley Blue Book did a couple of years ago that proved that point. "Sometimes, if you are pressed for time, you don't have much choice other than to eat your lunch in your car while you are on the go," he said. "But if you have to do that, maybe go for the cheeseburger instead of the taco. Or, just buy the leather seating to begin with so you can wipe off the stains."
Tires are also crucial to a car's resale and trade-in value. "They're very important, they're a big part of the visual impression people get of the car, and they're a good, visible indicator of how well you've maintained your car in general," Nerad said. So make sure you don't have mismatched tires, because those are visually unappealing. If a prospective buyer sees uneven tread wear, that might indicate that you didn't get the wheels aligned, rotate your tires or maintain proper tire pressure.
"All of those things send a pretty clear message to the prospective buyer that maybe you skimped out on maintenance in general," Nerad said. "[That] is a good sign that he may be laying out a lot of cash down the road to fix all those things."
In summary: Pay attention to which models are popular when choosing your car; keep personalization to a minimum; be conscientious about regular maintenance -- including tire rotation and wheel alignment -- and keep your maintenance records.
Stay on top of all of those tasks, and you stand a good chance of getting a pretty decent price when it's time to sell your car.