Published On: Tue, Nov 14th, 2017
Cars |

Weighing Your Options: How Equipment Choices Affect a Car’s Resale Value

Car Shopping

Say you’re in the market for a pickup truck. Let’s pretend that your tastes align with those of the masses, and you’ve decided on a Ford F-150. F-series trucks have topped the sales charts in the United States for 35 years, so you may assume that by selecting such a truck, you will have no problem with its resale value later, as opposed to more obscure vehicles that sell in small numbers and appeal to only a small segment of the market. You’d be partly right.

When it comes to resale value, mass appeal matters because it broadens the number of potential buyers. But if you’re shopping for a brand-new F-150, as soon as you start selecting options such as its engine, wheels, and cab size, you’re toying around with the way vehicle-valuation experts estimate its resale value before it is even driven away from the dealership. The truck’s value is not determined only by the options, either, but also by external factors such as where you live and what’s happening in the market.

Welcome to the wonderful, nuanced world of vehicle valuation. Some things are obvious. Indeed, the most important attribute for resale value begins with the condition of the car or truck; maintaining it well and keeping records will pay off in the end.

2017 Ford F-250 Valuation Adds and Deducts

Beyond that, the casserole of options that can be selected on a car or truck adds several layers to any particular vehicle’s value. It’s why valuation platforms such as Black Book list “adds” and “deducts” for the equipment found on the thousands of makes and models to which it assigns value. If a used car or truck has an optional feature that has a take rate of more than 50 percent, meaning that more than half of buyers choose it, then your choice to opt out could reduce the resale value, said Anil Goyal, senior vice president of automotive valuations and analytics at Black Book.

So when it comes to vehicle options, what can you expect?

Powered Features

There are many features in your car that are now expected to be powered, such as windows and locks, so those don’t really affect value. Power-operated seats are also among the features that add little or no resale value, as a majority of vehicles have them. “Just having a power seat adjustment is not something that’s going to bring in more value in the used-vehicle market,” Goyal said. However, not having power options that are widely expected is likely to reduce value. If you bought a 2010 Toyota FJ Cruiser without a power-mirror package (yes, that is still an option on some vehicles), Black Book knocks $ 450 off its resale value.

2016 Jeep Wrangler

Safety Tech

As advanced safety technology spreads, car buyers are coming to expect such features. “We’re finding that lately the safety packages’ take rates have become quite high,” Goyal said. Features like blind-spot monitoring and automated emergency braking have become popular, depending on market and segment. On higher-end luxury vehicles, safety packages are becoming a must-have. Some used-car shoppers may not even consider such features, however. “It doesn’t really apply to all vehicles,” Goyal said.

Automated Emergency Braking

Special Packages

In some cases, automakers have done a decent job of adding value via specific performance packages. An M Sport package on a BMW fetches good value on the back end because it is an established name, Goyal said. The same is true for the Z71 package on the Chevrolet Silverado. Whether or not packages are valuable can also depend on what’s included. Revisiting that 2010 FJ Cruiser, a Trail Teams Special Edition adds Bilstein shock absorbers, a rear differential lock, active traction control, front and rear skid plates, rock rails, all-terrain tires, and alloy wheels as well as several special cosmetic cues. That’s good for a $ 1500 add.

Toyota FJ Cruiser with Black Book Adds and Deducts

Trims

In general, higher trim levels may not add much value unless they’re made in low quantities, Goyal said. Trim packages that are produced at a clip greater than demand from consumers will understandably lose value, regardless of whether they’re upper-level options. A lower trim level that is fully loaded also may not command as much value as you’d expect, because used-car shoppers could be looking for base-level trims to find cheaper prices, and a car or truck’s bonus features would be an afterthought, Goyal said. Resale value is typically strongest on mid-level trims, he said, so you’re looking for a Goldilocks medium: not too hot, not too cold.

2018 Genesis G80 Sport

Colors

Not surprisingly, color affects resale value. A study by iSeeCars found that the vehicle color with the least amount of depreciation is yellow, with a depreciation rate of 27 percent over three years, while its close cousin gold has the largest rate of depreciation, at 37 percent during the same amount of time. But colors can be tricky. Goyal noted that yellow could be great for resale of a sports car and not so hot on a mid-size sedan. As for gold, the 2017 study suggests the color is just disliked by consumers, with a high depreciation rate across all body styles. Less common colors were more varied in their values, with green and orange performing above average and purple’s depreciation second only to gold. Common colors such as white, black, and gray were all close to average. The more common the color, the less likely you are to have an issue here.

2017 Dodge Challenger enthusiast colors

Automatic vs. Manual Transmission

A vast majority of newer U.S.-market vehicles now have automatic transmissions of one sort or another. Black Book deducts value from most vehicles with three pedals, with a few exceptions, such as sports cars. “But excluding that particular segment,  it’s typically a deduct,” Goyal said. If your FJ Cruiser has a stick shift, Black Book considers that an $ 800 deduction to its value.

2017 Mini Clubman John Cooper Works ALL4 Manual

Regions

Regional factors can play a role in resale values, Goyal said, because different places have different wants and needs. All-wheel drive or heated seats may be sought-after options in regions such as the Rocky Mountains or the Northeast but could add no value in Sunbelt states, where cars without air conditioning are nearly sales-proof. Convertibles could be daily drivers in Southern California but see only limited fair-weather use in the Midwest.

Mazda MPV

Other Wants

There are other, random items that continue to fetch value, Goyal said. Aluminum wheels are still a draw. So are diesel engines, especially in pickups, because those particular shoppers are generally looking for longer-lasting vehicles with decent towing capacity.

All the while, the market can change. Imagine what happens to the popularity of something like a Ford Excursion if gas prices double. In fact, you don’t have to imagine that; Ford canceled the Excursion after the 2005 model year as rising gas prices killed sales of the 7000-plus-pound monster. So, when buying a new vehicle, customize it as you please, but if you’re worried about being able to sell it on the private market or trade it in later, consider the consequences of your choices. If you plan to be that car or truck’s last owner, then more power to you; equip it just the way you like it and drive the thing into the ground.

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Weighing Your Options: How Equipment Choices Affect a Car’s Resale Value