Several factors determine second-hand car prices. Whether you are buying or selling a pre-owned car, knowing these factors is essential to understanding its fair market price. Read on to understand used car price factors in detail.
Top 10 Factors Affecting on Price of a Used Car
The price of a second-hand car depends on several underlying factors such as:
1. Car’s Age
The value of a car
depreciates with time and usage. Factors like the car's model,
variant, demand and supply, etc., also affect the price. The older a
car, the more you need to spend on the maintenance and repair of its
parts, and the lesser will be its value.
2. Car Model and Make
When it comes to
determining the value of a used car, its make and model play a
significant role. The popularity of a car depends on its features
and quality. Thus, most cars from leading brands are more popular
and expensive than non-branded ones. Cars with high demand and
limited supply also offer better resale value. Because of their high
demand, their price is affected to a certain extent.
3. Car Mileage
Car mileage represents
how much distance a car has covered that gets reflected on the
odometer. The lower the number of miles/kilometres a car has driven,
the higher its resale value. Lower mileage indicates that the car
has undergone less wear and tear. Higher mileage cars, on the other
hand, might require you to spend more on their maintenance and
repairs.
Used-car buyers and sellers should note that mileage is
not the only determiner of a car’s price. A car with scratches,
dents and damaged internal parts will fetch a lower price than a car
in perfect condition even if it has lower mileage.
4. Car Service History
The service
history of a car creates an impact on its resale value and often
leads to a rise in prices by 10% to 20%. Thus, make sure to maintain
records of the service history of your car to raise its resale
value. If your car is well-maintained, it appears appealing to
buyers as well.
5. Body Type of Car
Some car designs
are more desirable to buyers of second-hand vehicles than others. In
recent years, the tastes and preferences of purchasing used cars
have changed. People prefer purchasing second-hand SUVs to
accommodate their families and because of their safety and
commercial purpose. Meanwhile, outdated models and cars with known
design flaws fetch a lower price.
ALSO READ :- How To Get Loan To Buy An Old Car?
6. Car Damage History
The damage
history of second-hand cars has a significant impact on their resale
value. If a car has faced an accident, its resale value can
considerably depreciate. However, minor scratches or dents will
likely not have a large impact.
It is recommended to drive
safely to retail good resale value. The damage history of a car
reveals if it was involved in an accident and a major part was
replaced or repaired. Providing a detailed damage history of a car
with no major accidents will increase its selling price.
7. Car Colour
Your car's colour
influences its resale price to some extent. For the majority of
cases, used car buyers prefer muted colours like black, grey, etc.
Cars with these colours generally have a higher price when put for
sale when compared to more uncommon colours.
8. Car Exterior Features
Any kind of
modification in the exterior part of the car impacts its resale
value. Such modifications include painting of the car, tail wings,
upgradation of body kit, and more. However, if your car has any
scratches or lacks proper maintenance, its value will depreciate in
the market.
9. Car Internal Features
Pricing of
your car also depends on its internal conditions. Thus, make sure to
check the conditions of the interior before listing your car for
sale. Things like worn-out seats and dirty interiors will depreciate
the car’s value. On the other hand, taking proper care of your car
and installing new features like upgrading the sound system,
repairing brakes, and putting up reverse cameras will raise the
valuation of your car.
10. Frequency of Ownership
Frequency
of ownership determines the number of owners of a car and how
frequently it changes hands. The more the number of owners, the
lesser its resale value. This is because, each time the car changes
hands, it undergoes more wear and tear. Furthermore, it is unlikely
to undergo regular maintenance.
Why Prefer Used Cars Over New Cars?
The price of new cars has been rising steadily in the market over the years. Thus, it becomes difficult for everyone to purchase a new car. As more and more new cars are getting introduced into the used car market, potential buyers can purchase premium model cars at the same price. Moreover, used cars typically depreciate at a slow rate when compared to any new car. You can also go for less dealership fees and low insurance costs.
To Conclude
Various factors like the car model, colour, mileage, etc.
determine the price of a used car. If you are buying or selling a
second-hand car, you must be aware of these factors to make a better
financial decision. Before you finalise your decision to buy a used
car, research thoroughly and select the car looking at its interior
and exterior conditions.
To fund a second-hand car, you can avail a Pre-owned Car Loan from
Poonawalla Fincorp up to Rs.75 Lakh. The benefits include
flexible tenure of repayment, high loan amounts, interest rates, and
more. Why wait? Apply now!
