Stamp duty for cars explained
When you go to buy a new or used car, you will have to pay stamp duty. But what...
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The old adage says a new car starts losing money the minute it drives off the showroom floor. But the truth is, your choice of car could cost you before you even turn the key.
Spend too much on options, choose a gaudy colour or buy a model used by rental outfits and chances are you'll lose when it comes to sale time.
Smoking in it, leaving it under a fig tree or being lazy about servicing it can drive down the value
But there are other cardinal sins when it comes to protecting the price of your car. Smoking in it, leaving it under a fig tree or being lazy about servicing it can drive down the value of what is likely to be your second biggest purchase after your house.
Carsguide has compiled a guide of how to look after the value of your car.
Choices made at the dealership can greatly affect the resale value of your car. Selecting an obscure brand or model is not a good start. Generally, the best selling models will also sell better as used cars. However, models bought in large numbers by rental operators can drag down the value of non-rental vehicles as well.
Buying a new car at the end of its model life can also cost you dearly, especially if the next model is a marked improvement. The relative value of petrol or diesel, manual or automatic changes from car to car, so do your homework and look around at prices on the used market before making a decision.
The single most important way to protect the value of your car is to have it serviced properly. A car without a logbook is a risk and will be valued accordingly.
"A detailed service history is extremely important. It gives the buyer a certain level of confidence that the vehicle has been looked after," says Manheim Australia spokesman Matt McAuley.
One industry expert rates cars serviced at a dealership as generally more attractive than those serviced by independent workshops, even if they are qualified third-party providers.
A garage is the best form of protection for your car but any shelter is helpful and will limit premature ageing of the paint, especially on plastic surfaces. Harsh sunlight can also degrade the interiors, fading fabric and drying out leather. Treating leather surfaces can help to keep them looking new.
Just don't park it under a tree that leaks sap or houses large bird populations - droppings are acidic and will ruin the paint if left there. The same applies to road grime, tar and rubber from the tyres.
Floor mats and car covers are a cheap form of insurance against stains
Cars that are washed, polished and vacuumed regularly age better according to one wholesaler, who says: "You can tell if they have been poorly looked after and then given a quick detail before sale."
Floor mats and car covers are a cheap form of insurance against stains, while leather or synthetic leather seat trim are also easy-to-clean options for those with toddlers.
Just don't. "You would have to offer a pretty big discount for a car that someone has smoked in these days," says Adamidis.
Smoke gets into everything, from the headlining to seat fabric to the filters in the heating and cooling system and there is no sure way to get rid of it. A smoker might not pick it, but a non-smoker will.
Very few people smoke in their cars now, which means your car will stand out even more if it reeks of tobacco.
If post-warranty anxiety is not an actual condition, it should be. It is only natural for people to worry they are buying a dud second-hand car, especially if they are buying it privately. So, a car with a live warranty is worth a lot more than one that is no longer covered. Most warranties used to be limited to just three years or 100,000km, but emerging brands are now offering proper factory warranties for much longer, up to seven years in the case of Kia.
The factory warranty is worth the most, according to Glass's, while an extended warranty provided by a dealership that sold the car also provides comfort to buyers, although is not as valued as the former.
Dings and scratches
Few cars get through life without the odd ding or scratch, but these imperfections can make a big difference when it comes time to sell.
"The exterior presentation of a car gives the customer an idea of what is below the surface," says McAuley. "A car that looks good is likely to be looked after."
You have to weigh up whether the cost of the repairs can be recouped in the price of the car, but one car wholesaler tells Carsguide some customers trade in cars with $1500 worth of dings and scratches despite being fully insured. "Why they don't use their insurance to get it fixed is beyond me," he says.
It'is quite obvious: higher mileage means lower prices. However, there are other factors at play. A car that has clicked over 100,000km looks less attractive than one still in the 90s.
Certain mileage points also mean major services, which can be expensive, but don't assume you can offload your car just before a big one to save money.
"A lot of customers these days are across when a major service interval will be due, say for the timing belt, and will have that in mind when they look at the car," says McAuley.
When buying a new car, if you get a trade-in price from a dealer that sounds too good to be true, pause a second before signing on the dotted line.
Sometimes a dealer may come up with an unusually high trade-in price but then simply add his margin to the price of the new car.
A better bet is to ask the dealer what the changeover price is, which means the price of the new car minus the price of the trade-in. This is the number that you can use to shop around for the best price.
You might think that bright purple paint looks awesome but not everyone does and that might be a problem when you want to sell.
Extreme colours, often referred to as hero colours on hot Falcons and Commodores, are a mixed bag. In some cases, the hero colour is seen as a positive, especially for select performance models, as they are seen as the iconic version of that model (think Vermillion Fire GT-HO Falcons). Brasher colours can age quickly, appealing to fewer customers. Black may be a pain to keep clean but the experts reckon it doesn't seem to hurt resale values. Metallic paint costs extra initially but is worth no more than a flat colour on the used car market.
Dog hair has a habit of getting into every nook and cranny in a car, and the smell of wet dog is unlikely to enhance your prospects of getting a good price. If you need to carry your pooch to the nearest walking park, then make sure you segregate them, preferably with a perspex screen and mat that keeps the slobber and hairs in the load area. It's also safer for the dog and family in transit.
Just because you spent $3000 on a sunroof doesn't mean the next buyer of your car will. In fact, optional extras rarely add much, if any, value to a vehicle.
"You are better off buying a higher grade of vehicle than choosing a lesser model and adding options," says Nick Adamidis of Glass's Guide.
Something like larger alloy wheels, as long as they are original, might help increase the interest in your car
Leather seats can command a premium among used vehicles, as long as they have been looked after, but it usually amounts to just a fraction of the showroom cost of the option.
Something like larger alloy wheels, as long as they are original, might help increase the interest in your car when it comes time to sell, but you are not necessarily likely to get back the money you spent on the items in the first place.
Be smart with modifications
Modifying your car is a good way to drive down its value. "If a car looks like it has been driven by a hoon, it won't get the same price as a standard model," says Adamidis.
Customers will assume a car has been driven hard and fast if it has any performance modifications. Alarm bells go off at mechanical changes, such as bigger exhausts and air intakes, but even after-market wheels can spook potential customers. The same goes for off-road accessories. If you must make changes, keep the original part and refit it when it comes time to sell.