Re-sale value is a term that buyers often overlook while finalizing their new car purchase. Depreciation of a car is an extremely important factor when you decide to replace your car a few years down the line. Infact, a car with lower depreciation not only fetches you a higher price vis a vis other similar cars of the segment, it is also easier to sell owning to high demand.
Reasons effecting re-sale value:
- Availability and demand
The demand-supply ratio is a very common reason for effecting the value for any product. Cars like the Hexa might not be segment best-sellers but due to high demand for used Hexas and happy current owners who are not willing to part ways with their SUV, re-sale value of this Tata product is highest in its segment. On the other hand if owners are not happy with a particular model and want to dispose it off early, there will be a higher supply of used units of the said model, thereby reducing its price in the pre-owned market significantly.
- Face-lift and newer versions
It goes without saying that an older version of a model will have poor re-sale value. Examples include new EcoSport and new Dzire – their older versions are losing a fair bit of market value as the new models are significantly better.
- Waiting period on new models
The third factor might surprise you but holds true for the pre-owned space and is based on the demand-supply factor. Let us explain you – if a buyer wants to purchase the new generation Dzire, he would have to wait for months. The second option for him is to search for a used model which he can purchase within days, thereby bypassing the waiting period. The crucial factor here is the demand for such cars vis a vis the supply, and hence the high premium / re-sale value.
Without much further ado, lets have a look at the cars with the best re-sale value, or the lowest depreciation, segment wise. The following list has been compiled after speaking to our friends at Mr Car, one of the leading privately owned chains of pre-owned car outlets in Delhi, Gurgaon and Mumbai
- Entry level hatchbacks
The Renault Kwid remains a hot favorite, both in the new car market and the pre-owned segment. Youngsters and first time buyers are willing to opt for a used Kwid (to save money) and this is the reason for its high resale value.
- Mid-size hatchbacks
Maruti Swift remains an ever-green car in the new and used car market and the new generation launch has not effected its demand in the pre-owned space at all. Infact, the long waiting period on the new model plays an important role here.
- Premium hatchbacks
Another Maruti offering here is the Baleno – the best selling premium hatchback was launched over 2 years back and yet has a waiting period. This is also the reason why consumers don’t mind opting for a pre-owned unit, keeping its re-sale value high
- Compact sedans
While we thought the Maruti Dzire would be the easy pick here, the Honda Amaze gives it a good fight. Honda has done their homework right and consumers are looking out for the Amaze in the pre-owned space owing to factor like segment leading comfort.
- C segment sedans
The Honda City has been a best-seller and thanks to the premium tag attached to it, buyers don’t mind paying that extra money for a pre-owned model. Honda’s strong after-sales support also plays an important role here. The City is also a relatively reliable car in the long run, giving buyers peace of mind
- D segment sedans
Toyota vehicles are known to offer low depreciation and the Altis is a perfect example. This car erases one of the biggest problems attached with used cars – reliability. It also offers one of the most comfortable rear seats in the business.
- Sub 4 meter SUVs
Till recently, both the Brezza and the EcoSport locked horns when it came to the best re-sale value among the compact SUVs. However, owing to the new face-lift version, the old EcoSport is now losing its value rapidly in the pre-owned space.
- Mid-size SUVs
This is a no-brainer. The Hyundai Creta has no competition here and enjoys a fairly high market value in the used car space. It satisfies all the requirements of a buyer looking at a smart, comfortable and feature loaded used SUV in the Rs 8-10 lakh range.
- Full sized SUVs
The Tata Hexa is a surprise here, bettering the Mahindra XUV500. This is purely due to the high demand for the Hexa and unavailability of used ones. Owners seem happy with the vehicle and the reason why they are not looking at selling it off so early.
There are a few cars in the Indian market which have remained segment leaders from day number one and the Innova is a perfect example. It has one of the lowest depreciation across all segments of cars. Even a 4-6 year old Innova demands a premium and will run without trouble for years to come.
- Premium SUVs
Like the Innova, the Fortuner is the pick when it comes to Rs 15-20 lakh used SUVs. Buyers get peace of mind along with ego massing design and low running costs. That said, the new generation Ford Endeavour comes a close second.