3 Factors That Can Affect Used Car Resale Values

Investing in a used vehicle is a great way to access a functional car for a fraction of the cost of a new vehicle. Some used vehicles are better investments than others due to the resale value of the make and model of these cars.

To identify which vehicles you should focus your search on when you are in the market for a used car, it can be helpful to identify some of the factors that can affect used car resale values in today's market.

1. New Vehicle Incentives

You should always look at the prices and availability of new vehicles in the make and model you are interested in purchasing, even if you know you will be getting a used vehicle. This is because the incentives and pricing offered by dealerships on new vehicles can affect the resale value of used cars.

If a dealership is offering rebates, discounts, or add-ons that make the purchase of a new vehicle extremely attractive, many drivers will opt to invest in the new version of that make and model. This means that the value of the pre-owned versions of that make and model will be more affordable.

It's great to buy used when dealers are offering new vehicle incentives, but you should wait until these incentive periods expire before trying to sell a used vehicle if you want to maximize your profit.

2. Manufacturer Warranties

More and more drivers are making the choice to invest in used Hondas, Toyotas, Fords, and used vehicles from other major manufacturers. These vehicle manufacturers are responding to this increase in demand by offering limited warranties on used vehicles purchased through an authorized dealer. These warranties will typically help offset the cost of major repairs for a certain time period or mileage after the purchase of the car.

A manufacturer's warranty will make pre-owned vehicles more attractive, which helps increase their resale value for the duration of the warranty period.

3. Availability of Replacement Parts

It is inevitable that all cars will need parts repaired or replaced at some point during their lifetime. Drivers who are looking to invest in used vehicles should always consider the availability of replacement parts when trying to determine resale value.

If replacement parts are readily available, then repair costs will be low. This makes a vehicle more attractive and boosts its resale value. When replacement parts are scarce, the resale value of the used vehicle will suffer because drivers might view future repairs as being too costly.