How does a car’s design influence its residual value?
Discover how and why a vehicle’s design has a major impact on new and used-car values. Plus, learn how to quickly identify the most profitable vehicles for your portfolio.
Discover why a car’s appearance has a strong influence on its lifetime value.
Understand the impact that car interiors have on residual values.
Learn how to identify vehicle features that strengthen residual values.
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How a car’s exterior design influences its residual value
A vehicle’s appearance is one of the most important purchasing factors for all car customers. So, exterior design has a heavy influence on residual value.
Cars are designed appeal to our senses and prepare our expectations. A model could feel beautiful, sporty or sophisticated – but what’s important is that it evokes a positive emotional response that builds value.
That’s because residual value is driven by supply and demand. If a car is visually unappealing it generates a low perception of enjoyment, low value and less demand from customers. Plus, since the automotive market fluctuates daily, we advise that you review your stock’s value often – or risk burdening an expensive and undesirable portfolio.
Rodboka’s market-beating data accuracy puts your business at the cutting-edge of car pricing trends. Easily review the fastest sellers, biggest risks and regional variations as often as you need. Click below to learn more.
How a car’s interior design affects its residual value
Much like the exterior, the quality of a car’s interior is one of the most immediate factors when purchasing a vehicle. This is particularly true when it’s sold as a used car for the first time.
High-quality materials, controls and workmanship indicate robustness and reliability after some years of use. These positive tactile impressions satisfy used-car-buyer expectations, boost desirability and therefore strengthen residual values.
Why a car’s design must remain attractive over time
In order to retain high residual value, it is important that a car’s emotionally positive response is maintained over time. That’s why cars are more often designed to look classic, rather than daring.
Buyers want emotive cars that feel fresh and high quality – even on the used-car market. So, automotive professionals must frequently assess the most likely future market trends.
However, market fluctuations can have a sudden and dramatic effect on residual values. To account for new market developments and avoid financial risks, we recommend you reforecast your vehicle or fleet’s true future value regularly.
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Why simplicity is key to retaining strong car residual values
A clear understanding of a vehicle’s functions will help strengthen residual value – since perceived value is a key influencer. For new-car buyers, there is usually a salesperson explaining these functions. However, a vehicle on the used-car market must often make its own impression.
A complex offering leads to disappointment in potential buyers and a decreasing interest in the car. Manufacturers, fleet owners and remarketers alike can avoid this disappointment by regularly reviewing which features have the best effect on current and future residual values.