Whether you own a 4WD that you’ve loved dearly and need to give up or if you’re looking to buy a secondhand offroader because you’re okay with the idea, this article should help guide you on what to look for, what to expect and how to navigate your way to a good price on a 4WD.
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What is Depreciation?
Put simply, vehicles lose their value the moment you roll it out of the lot and its depreciation rate dictates how much of it they lose over time.
Newly bought vehicles are the fastest to depreciate. On average, you can expect its value to come down to 10% and as much as 20% by the end of the year. By the fifth year, you can expect your vehicle to depreciate by as much as 60% from the price you paid for it initially.
If the vehicle in question is in used condition, you’re technically getting more for your money because you’re not buying it at the dealership price. If you’re looking at a vehicle’s depreciation rate and strategizing on how to sell it later on, you can take solace in knowing that you bought it at a cheaper price (assuming it was in good condition when you bought it) and can still sell or trade it in for a decent amount.
Alternatively, you could also choose to purchase your vehicle on a lease. The main advantage when you purchase a leased vehicle (when it comes to depreciation) is that you’re guaranteed not to sell your vehicle at a loss while its lease is still in effect. In fact, when you decide to give the vehicle up, all you need to do is end the lease and have the interested party buy it out.
General Factors That Affect Depreciation Value
A vehicle’s depreciation value is based on a series of elements and circumstances, some of which include:
- Brand
- Trim Level
- Model
- Safety Ratings
- Fuel Economy
- Cost of Replacement Parts
- Customer Service
- Modifications
When considering these factors, the number one thing you need to put into the back of your mind is to do research on the vehicle you’re interested in.
Brand
Purchase a brand that’s established, big and well-known.
It should come as no surprise that a brand known for its reliability should be able to fetch higher resale values than cheaper, less-known vehicle brands. For example, Toyota is a brand well-associated with quality and reliability, so it would have a potentially lower depreciation rate than say, South Korean brand SsangYong.
It may also help to get second opinions and read online message boards to see what other people’s experiences are with certain brands.
Decent brand picks in the Australian car market include Toyota, Mitsubishi and Subaru.
Trim Level
Usually, vehicles with more bells and whistles from the factory will have a higher resale value than the base variant.
Remember, it’s the vehicles that come with factory-installed add-ons that will typically have a lower depreciation rate than vehicles that come with stock features. This happens because factory-installed features are usually an upgrade over base options (say, a 4.0L V6 on a base XE 2016 Nissan Patrol versus the same vehicle with an upgrade LE version 5.6L V8) and will usually have a large supply of replacement parts available long after the last unit rolls out.
Keep in mind however, that a fully loaded vehicle will be more expensive to maintain while you have it, so weigh your options.
Model
Do some research and buy a popular vehicle model.
A good reason buying well-liked vehicle models is a good bet is because there’s a higher chance of buyers wanting to take your pre-loved 4WD off your hands when the time comes. I mean think about it, when a buyer looks for a secondhand vehicle, on top of finding a good deal, they’re also looking for familiarity and (if they’re practical) a product that they have some level of knowledge about.
However, you must not confuse “popular” with “fleet” vehicles. Fleet vehicles are used in service by numerous companies (like taxis, ambulances and police vehicles) and have always had lower resale values than popular vehicle models.
A few models that have great projected resale value in the coming years are the Toyota Landcruiser, Subaru Forester and Porsche Cayenne.
Safety Ratings
Buying a 4WD that has good safety features will help.
A vehicle’s safety rating is always a good option to consider, especially if you drive a lot. It’s a characteristic in automobiles that most people don’t take into account all the time, but does affect a car’s resale value. If you want to think about this in practical terms, would you rather be caught in an accident with a vehicle that rolls over easily and has tiny airbags? Or would you get a vehicle that protects you from a nuclear bomb?
A practical 4WD buyer would take safety ratings into account, possibly much more so than your average car buyer, so it would be a good idea to invest in a vehicle with good ratings than risk getting one otherwise.
All hyperbole aside, a vehicle with good safety ratings typically has a better resale value than a vehicle with less-than-great reviews.
Fuel Economy
A vehicle with good fuel economy also helps lower depreciation value.
This may not always apply to 4WD vehicles, but practically speaking, vehicles with good gas mileage have better resale values than gas guzzlers. With newer model vehicles competing to become more gas-efficient as the years pass, it would help a secondhand vehicle command a nicer price from a willing buyer if it has the fuel economy to compete with vehicles in the future.
Note that sometimes this may not always be the case with some vehicles praised for bigger engines and better power output, depending on the situation. It pays to do research!
Cost of Replacement Parts
It helps a lot to convince people if a vehicle has a huge supply of spare parts.
Nothing lasts forever (at least when you own a vehicle) and the availability of spare parts and how much they cost can determine a buyer’s decision. The supply of spare parts typically varies per country and is determined by a manufacturer’s maintenance and support service. Chances are, if your car requires a part to be replaced and doesn’t have that level of support in your country, you’ll be paying an arm and a leg out-of-pocket just to import the required equipment in (or make do with non-standard, ill-advised substitutes).
Depending on how hard you drive your 4WD, you may be replacing parts at a faster rate than most other drivers, so keep this in mind when deciding what vehicle to buy and (more importantly) what price to expect when you give it up.
Some brands to avoid in Australia are: Chrysler, Citroën and Peugeot.
Customer Service
A brand that treats its customers right has plenty of people praising it.
This applies not just to parts, but the kind of roadside assistance and post-sales support that comes with a vehicle after you buy it. You have a brand that has a large supply of replacement parts, great. But it also helps a car’s resale value if your vehicle still has options like emergency assistance, navigation services, in-vehicle security and remote diagnostics (just to name a few).
Ask your dealer about these kinds of services and how long their services may be procured; examples include OnStar for Chevrolet and Ford SYNC for Ford Motors.
Modifications
A 4WD’s mods can help fetch a better price on the market… with caveats.
When it comes to 4WD off-roaders, it should come as no surprise that enthusiasts will put mods onto their vehicles. Whether it’s a lift, a new suspension or roll cages, modifying 4WD vehicles happens very often and may or may not increase a vehicle’s resale value.
I say “may or may not” because, depending on the circumstances, you may be voiding the warranty on certain parts of your vehicle by doing so. You’re pretty much gambling on a vehicle’s resale value by placing more of a buyer’s investment onto the mods than the vehicle itself, potentially losing much of the money you could be making by neglecting the future viability of your 4WD.
Personally speaking, if you really should purchase mods, aim to get mods that don’t interfere with a vehicle’s warranty. Depending on your lifestyle (say if you go offroading more than a few times a month), you may consider putting in some leeway when it comes to modifying your 4WD’s suspension and tires. But as much as possible, to avoid depreciation, keep your vehicle’s furniture stock and unchanged.
Some Tools to Use to Figure Out My 4WD’s Resale Value
There are many sites online to use to figure out a vehicle’s depreciation rate, and below are a few that will specifically help 4WD owners.
Omnicalculator.com
A site that gives you a good general idea of how much your vehicle will sell in five years.
This site covers a LARGE variety of expenses; the site advertises a range of over 823 calculators, but for all intents and purposes, the most useful tool is its Car Depreciation Calculator.
Created by Bogna Haponiuk and Tomasz Jedynak, PhD, the Car Depreciation Calculator gives individuals a general idea of how much their vehicle will cost from the moment it rolls off the lot, to its projected value in five years. It also includes some guidelines and useful information to think about when trying to determine a prediction on your car’s value in the future.
Some cons about this site however, include the fact that you cannot determine the depreciation values of specific kinds of vehicles; their models, make or brand, the site does not give you depreciation values beyond five years, and the fact that the depreciation values are general and do not represent a vehicle’s real market value in real time.
Just keep in mind that this is a good tool to get a ballpark figure and utilize it as such.
Carsales.com.au
A quick, easy-to-use site that offers car resale numbers in a few minutes.
If you’re the kind of individual who can’t be bothered to go into technical details about how much your car value depreciates annually, how much your car will sell for in a few years or other such questions, this site may be right up your alley.
Getting an estimate for a secondhand 4WD is simple as hovering your mouse on the “Sell My Car” tab and selecting “Value My Car”. After putting in the right information, a small slider will appear and show you exactly how much you can expect to sell your 4WD on the low and high end. Simple!
The cons about using this site are that you don’t see the kinds of computations or specific factors that go into determining your vehicle’s worth and that much of the information that goes into determining what the “low” and “high” ends are for vehicle’s worth comes from aggregate estimates of vehicles currently sold on the site.
Redbook.com.au
A local site that offers detailed descriptions and estimations of vehicle and other mobile property resale values.
This is a decent site that covers all facets of car reselling, as well as bikes, boats and caravans. On top of offering valuation reports, it features its own editor’s newsletters, reviews, videos and advice guides on helping you decide how and what price to sell your vehicle for.
On top of everything, it’s local! You can rest assured when browsing and studying this site that all the relevant information pertaining to vehicle depreciation rates, resale values (and those values for caravans and bikes) are current and applicable. I highly recommend using this site for your research.
Iseecars.com
An American site that has utilizes a large, in-depth database of vehicles to determine resale value.
iseecars.com is a highly-praised site that compares thousands of used car prices based on the vehicle’s location and its market value.
If you use this site, the most useful feature it has is the “Research” tab on the top bar. If you roll your mouse over this tab, it should give you access to several more options. While I won’t go into detail about every single one of the features on this website, the Research tab offers insights and concrete information about relatively current vehicle models and what their depreciation values are (including trim levels!). It’s an informative site that earns its reputation well (at least in the U.S. market) and is a tool that should be considered when making decisions about selling your 4WD.
A tradeoff about using this site is that the information is U.S.-based and will require you to use U.S. postal zip codes to get estimates and useful information on vehicle prices. Also, pricing varies according to U.S.-markets and their corresponding states, so if you want concrete numbers on certain 4WD’s, you may need to get estimates from vehicles in different states.
Four 4WD’s With Good Depreciation Rates
For all practical purposes and accuracy, the resale values of most of these vehicles will lie within the time span of about three years.
Subaru Forester
A$33,000 – A$41,000 MSRP, 2019
You can expect to have a resale value of about 75% of its original sell price within three years.
While not necessarily the most hardy 4WD, the Subaru Forester is a popular choice with young adults and can tackle easy to easy-moderate terrain with ease and has great safety ratings.
Toyota Landcruiser
A$53,000 – A$120,000 MSRP, 2019
You can expect to have a resale value of about 75% of its original sell price within three years.
The Landcruiser is especially popular with 4WD enthusiasts and should come as no surprise on this list. Many off-roaders praise its GXL turbo-diesel engine for its utility and versatility. This is a great choice for serious off-roaders looking to make a decent investment in the long-term (assuming you’re willing to let go of it).
Honda CR-V
A$28,000 – A$45,000 MSRP, 2019
You can expect to have a resale value of about 80% of its original sell price within three years.
The top tier AWD trim will be the most attractive option for offroaders looking for a frugal (and maybe not-so powerful) option. You’re pretty much stuck with a smaller 1.5L petrol engine, but it does have great fuel economy, is AWD, and is a more practical option if you have a family.
Porsche Cayenne
A$117,000 – A$239,000 MSRP, 2019
You can expect to have a resale value of about 70% of its original sell price within three years.
If you’re willing to shell out a whopping $120,000, then the Cayenne is a good bet against future depreciation. On top of being offroad capable, this 4×4 is also classified as a luxury vehicle (which explains its price) and is presumably very popular in the market. It’s kind of a bit of everything; a sports car, offroad, 4×4 hybrid that brings its own level of fun and excitement alongside great value.
