Car Insurance

5 Things You Can Do to Get Top Dollar for Your Used Car

Whether you no longer have use for a car or you are looking to upgrade your current vehicle, here are 5 things you should do in order to maximise the resale value of your car.

From the exorbitant prices to the costly insurance and maintenance costs, it's no secret that cars in Singapore are extremely expensive to own. That's why most prospective car buyers take a long time to research diligently, ask for advice and take precautions to make sure they're getting a car that will last them for at least the duration of their COE. However, those who realised they may have bought the wrong car for their needs or have changed their mind about owning a car may end up with thousands of dollars in losses, even when putting their car up for sale. However, while selling your car won't get back 100% of the original price due to factors beyond your control such as depreciation, there are still things you can do throughout your car's life cycle to get the best resale value.

Be a Careful Driver

While you may not avoid depreciation completely, there are things you can do to prevent a lower resale value due to long-term wear and tear. The most important way to do this is to be a safe and careful driver. While it is tempting to smash brakes and take hard turns when we feel rushed or angry, these driving habits can lead to long-term damage and accidents. Not only will your car become more susceptible to breaking down, but experienced buyers and car dealers will be able to identify damaged parts to your car and attempt to negotiate a lower price. This becomes ever the more evident if your car has gotten into accidents as well. Instead, you should be practicing careful driving as soon as you leave the dealership and consider breaking in your vehicle by being consistent with your gas pedal and fully breaking in your engine.

This table shows minimum distances needed to drive before full throttle/acceleration or sudden braking should be attempted as per car model manual

Invest in a Comprehensive Insurance Policy

A cheap comprehensive car insurance policy may be great for those who are accident free and are planning on keeping their car until it's time to scrap it. However, those who are realising they may want to sell should consider investing in a more comprehensive car insurance policy to help them to ensure they're well protected beyond basic windscreen, theft and fire damage. For instance, HL Assurance offers complimentary car servicing and even authorises you to make minor repairs, making maintaining your car that much more affordable. Furthermore, a good insurance policy will be able to cover costly accidents, saving you money to focus on things that can help increase the car's value instead.

Replace Small Worn Out Car Parts

Towards the end of your car ownership and when you are getting ready to put your car up for sale, you should start thinking about replacing damaged or worn out parts. While bigger repairs are best left to car mechanics, you can easily increase the value of your car by swapping out simple parts such as the brake pads, engine air filters and car mats. Not only will this make the car feel newer and better to prospective buyers, but it will also benefit you for the rest of the time you own your car. For instance, replacing your brake pads can prevent accidents and damage. Additionally, replacing an engine air filter can increase fuel efficiency and prolong your engine's life. These small changes can really add to the resale value of your car in the long run, especially since many dealerships will deduct any fees incurred for any repairs they have to do on their own.

This table shows the average price of various car parts as found on online web retailers in Singapore

Choose the Right Avenue of Sale

In Singapore, you can sell your car via a few different channels. The first way is to simply post an ad on a website like SGcarmart or Carro and hope for the best. The second way is to go through a used car dealership. The third way is a hybrid of the first two and involves using an agent (selling through consignment). All three channels have their benefits and drawbacks. Selling directly will give you greater control over the final sale price; but it may take a long time you to actually find a buyer. A consignment sell will result in more money for you and is cheaper than a dealer (usually a flat fee around S$500 or 1% of the sale price), but an inexperienced agent can make selling your car much more difficult. Used car dealerships guarantee some form of payment if they accept your car, although you will sell it for less than if you sold it directly.

Regardless of the channel you choose, you should conduct a thorough research of the market. For instance, if you want to maximise resale value, you should get a few quotes from accredited dealers first, calculate what their final price would be and go via the direct selling or consignment route. Those who are adamant about using a dealer should negotiate their price, since dealers usually take a healthy profit margin of S$2,000 or more. While you may not get the exact price you initially ask for (hence you should consider initially highballing your sale price), you may end up settling on a happy medium that is still a few hundred dollars more than what you were initially quoted.

Know the Selling Points of Your Car & Maintain Them

When you think back to when you first bought your car, there must have been some nugget of information that made you decide this car was the one you wanted. Whether it was a streamlined design, enhanced safety features or a great engine, these features were enticing enough to get you to spend tens of thousands of dollars. Since these features are most likely going to be the same selling points for future buyers, you should take extra care in maintaining them and highlighting them to future buyers.

For instance, let's say one of your car's selling points was its powerful Turbocharged DOHC V-6 engine. Since prospective buyers may be interested in your car because of its purported engine quality, keeping it in mint condition by using the proper grade fuel can help you negotiate a higher price. Likewise, if what drew you to your car was a sleek and ultra-modern design, you should make take special care of its paint job and avoid scratches and dents.

In Conclusion: Invest Early to Reap Higher Rewards

While people enjoy scoring a great deal, they're also willing to pay extra for high quality. This is why it is important to keep your car in the best shape possible if you want to command a higher price. Due to the high volume of used cars for sale in Singapore, it is up to you to prove to potential consumers why your car deserves to be priced at what it is—especially if you decide to charge a few thousand dollars above the average asking price for your model. Routine maintenance and paying attention to small details can mean the difference between barely selling a car for a lower than average price and negotiating a price that is several thousand dollars higher. On a market where the same used model's price can range between S$67,800 and S$73,800, this means your couple hundred dollars investment in keeping your car in top condition can easily lead to a price increase of 15-20%.

Anastassia Evlanova

Anastassia is a Senior Research Analyst at ValueChampion Singapore, evaluating insurance products for consumers based on quantitative and qualitative financial analysis. She holds degrees in Economics and International Business Management and her prior working experience includes work in the capital markets sector. Her analyses surrounding insurance, healthcare, international affairs and personal finance has been featured on AsiaOne, Business Insider, DW, Vice, Her World, Asia Insurance Review, the Australian Institute of International Affairs and more.

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