The resale value of any car depends on various factors. Most of the people don’t have resale value as a deciding criterion in their mind when buying a car but that becomes important once the thoughts of selling it come to mind. No matter which car you buy, depreciation in its value is something that happens for sure. However, the depreciation of a car’s value varies from car to car. A question then arises in the mind that how exactly is the resale value of your affected? Let’s take a look at three major contributing factors that can determine whether your car will have a great resale value or not in the second-hand car market.
Availability (demand-supply ratio) – As simple as its name, the demand and supply ratio affects cars in the same way it affects everything else in the world. In fact, it is one of the major factors in the used car market. It is not necessary that a vehicle should sell in big numbers to have a good resale value. If a decent vehicle is not available easily in the used car market, its value automatically goes up. This has been the case with a few cars that were actually good but never made it big in the new car market. Their owners didn’t part with them early and this leads to an increase in their resale value. Also, the same rule applies backwards too like if the demand for a vehicle is quite low in the second-hand market due to a lack of potential buyers, the resale value of the car drops significantly.
Face-lifts and newer generation cars – Whenever a manufacturer drops in a newer version of any car, the resale value of the existing model takes a hit. This is because most of the buyers want to go for the new model which pushes up the demand of the new model all the while leaving the previous model in the dust. With buyers focused on the new, the value of the second-hand car depreciates faster due to a lack of enough interest in said vehicle. The previous versions of the Ford EcoSport and the Maruti Dzire have dropped significantly in value since the arrival of the newer versions.
Waiting period on new models – While it is may be somewhat surprising for some readers, the waiting period for a new car can significantly increase the price of a second-hand version of the same car if it comes to the market. Buyers prefer not to wait for popular vehicles and are willing to pay a big premium over the regular asking price to get their preferred car even if it has had a previous owner or is not of the same generation. In the following list, we take a look at the cars with the best resale value, or the lowest depreciation, in their respective segments. This list has been compiled with the help of our friends at Mr Car, one of the leading privately owned chains of pre-owned car outlets in Delhi, Gurgaon and Mumbai.
Let’s now take a look at some of the segments in the Indian car market and cars with the highest demand and resale value in them.
Entry level hatchbacks
The entry-level hatchback segment is among the volume driver segments in the industry. It has been largely ruled by Maruti Suzuki ever since the start by either the 800 or the Alto. However, when it comes to the resale value of cars in this segment, the Renault Kwid tops the chart as it has the best resale value in this segment. A part of this can be credited to the young and first-time car owners who are willing to opt for a used Kwid instead of a new car. This lets them save a few bucks and get a car that is well loaded.
Coming to another hotly contested hatchback segment, the Maruti Swift is the undisputed king in the mid-size hatchback segment. This applies to both new car sales and used car sales. One of the major reasons why it commands a high resale value is the long waiting period which comes after buying a new Swift.
Next is another Maruti Suzuki hatchback in the premium hatchback segment. We are talking about the Baleno, which is currently among the best selling cars for Maruti. The Baleno also leads the second-hand market and commands a high resale value. The reason for this can again be attributed to the Baleno’s long wait time, which sometimes makes potential buyers go the used car way.
The Compact segment has two equal rivals when talking about the resale value. These are the Maruti Suzuki Swift Dzire and the new Honda Amaze. However, the demand for the Dzire is slightly more than the Amaze and hence it is the leader in the used car market too. For those who are wondering why the Amaze is popular in the used car circuits, the class-leading comfort and great interiors of the car apart from the Honda badge make it a popular car in the pre-owned car market. However, the introduction of the latest Amaze has resulted in a fall of the resale value of the older generation car.
C segment sedans
The C-segment sedan has a king in the form of the Honda City. The sedan leads the C-Segment sedan market with regards to resale value. Most of the customers/buyers don’t mind paying an extra amount of money if they get what they see as a more premium car. Moreover, the City’s relative reliability, badge value and Honda’s strong after-sales support setup ensures that second-hand car buyers have an easy time maintaining their cars in the long run.
D segment sedans
Most of the Toyota cars sold in India are well-known for their reliability and tough build quality. The Corolla Altis is the perfect example of this. The demand for the Corolla Altis is quite high which results in higher resale value of the car, all because of its reliable nature and comfortable rear seats. to let you know, the Toyota Corolla is the overall best selling vehicle in the world, which speaks volumes about its popularity.
Sub-4 meter SUVs
The Maruti Suzuki Vitara Brezza is the best selling vehicle in the sub-4 meter SUV segment. the same is the case in the used car market too for the Vitara Brezza. The SUV has a high resale value and was challenged by the Ford EcoSport sometime back in the used car market but the introduction of the second-gen Ford SUV has seen its value plummet rapidly. The Vitara Brezza, however, is still the most popular choice in the segment and hence commands a great resale value too.
Coming to compact SUVs, the Hyundai Creta is the king of the hill here both in terms of new car sales as well as used car sales. The reason for its high resale value and good demand in the used car market can be attributed to several factors like its feature-rich cabin, comfortable interiors and frugal yet powerful engines. All this results into the Creta being the segment leader in used car sales also.
The mid-size SUV game consists of players like the Mahindra XUV500, Tata Hexa and the new kid on the block, the Tata Harrier. Since the Harrier was launched this January, it is not included here but the Tata Hexa and the Mahindra XUV500 lock horns with each other in terms of demand and resale value. The Hexa used to be the leader here but of late, the XUV500 has taken the crown from the Hexa. To let you know, both Tata and Mahindra vehicles are not known for their resale value but the Mahindra SUV triumphs in this case.
If we talk about MPV and used car market, there is no other vehicle that even comes remotely close to the Toyota Innova. This is because of its legendary reliability along with comfortable and spacious interiors which makes the buyers pay a premium for a second-hand Innovas even if it is 4-6 years old. The Maruti Suzuki Ertiga also commands a good resale value but the Innova is a whole new story.
Undoubtedly, this one goes to the Toyota Fortuner. This SUV defies the regular used car market logic as we have seen few months old Fortuners being sold for almost the same price as a new vehicle. Thanks to its premium look, low running cost, powerful engine and comfortable interiors while not forgetting the legendary Toyota build quality, the Fortuner has a very high resale value.
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