Understanding Second-Hand Car Value: Used Car Buying Guide Checkpoint Table

Tata Punch
Tata Punch

Understanding Second-Hand Car Value: The resale value of cars is crucial to Malaysian buyers. Recent discussions on social media have highlighted the reduced resale price of Proton’s X70 SUV, emphasizing the importance of considering various factors while evaluating a purchase.

It’s essential to recognize the impact of aging and market demand on a car’s value in the second-hand market. While considering a car’s future resale value is wise, it should not overshadow the primary consideration of meeting present needs and preferences.

Understanding Second-Hand Car Value

A car’s resale value is very important to Malaysians when they buy a car. Some people are almost obsessed with it. Many people consider the potential resale value when they think about whether a car is worth the money.

The cause and effect of market value changes are often not well understood. Social media posts recently brought attention to this issue by discussing the significantly lower resale price of Proton Holdings Bhd’s (Proton) X70 sports utility vehicle (SUV).

This incident is a great example to understand how the resale market works and why it shouldn’t be the only thing buyers consider. The X70 was a big deal when it was first launched, as it was the first model produced through the national carmaker’s partnership with Zhejiang Geely Holding Group Co. (Geely).

It was the brand’s top high-end model with a very appealing price for the features it offered in an SUV. There was nothing similar available locally at the time, and it continues to be a highly competitive model in the C-segment SUV market today. Proton recently announced that the model is still very popular, having sold 95,100 units since its launch.

With such a strong background, people have been wondering why the iconic model is not worth as much as when it was first released or as much as a brand new X70. The worry is unnecessary, and prices are actually good overall, regardless of any analysis. 2nd Hand Urgent sale Renault Kiger at price 5 lakh: Old car price Single owner

Used Car Buying Guide Checkpoint Table

CheckpointConsideration
Resale valueRecognize the impact of aging and market demand, without overshadowing present needs and preferences
Car’s historyUnderstand the steady decrease in value over time, considering market demand and potential issues affecting value
Dealerships and agentsBe aware of the variety in pricing and the necessity for certification to ensure a fair and reasonable deal
Model’s resale valueUnderstand the impact of rarity, demand, and age on resale value, and its relationship with sales performance
Car’s future resale valueBalance the consideration for potential resale value with the need for a satisfying car that meets current needs

This table summarizes the key considerations for buying an old car, taking into account resale value, the car’s history, dealership and sales agent dynamics, the model’s resale value, and the car’s future resale value. Each checkpoint presents essential factors to consider in evaluating the purchase of a second-hand vehicle.

Car’s history

It’s important to understand that cars lose value over time, unlike property and gold. It’s widely known that a car’s value drops by 20 to 30 percent as soon as it’s driven off the lot. That value continues to decrease by about 15% each year. It’s typical for a product’s price to drop to 50-60% of its original value after five years.

That’s if the car doesn’t have any problems like a bad crash history or known big issues in the market. These things could make the car worth even less. Models that hold a high value in the resale market for many years usually fall into two categories: classic and iconic models, or those with consistently high market demand. The latter category typically includes popular mass-market models.

The X70 SUV was launched in December 2018, which makes the model almost 6 years old now. It’s actually based on Geely’s Boyue model in China, first launched in 2016, so it’s close to 8 years of age. Urgent Sale second Hand used Mahindra Thar 2020 model price 8 Lakh, Check Out Details

Dealerships and sales agents

It is currently available in four different versions: 1.5L TGDI Standard two-wheel drive (2WD), Executive 2WD, Executive all-wheel drive (AWD), and the Premium 2WD. Proton replaced the older 1.8-liter turbocharged and direct-injected four-cylinder petrol engine with the newer 1.5-liter direct-injection TGDi turbocharged three-cylinder engine during the model’s refresh in 2022.

All versions of the car have kept the same price before and after the update: RM99,800, RM109,800, RM115,800, and RM123,800. According to myTukar and Carsome, a used 2020 X70 can be priced from RM69,900 to RM116,800.

On mudah.my, you can find 2018-2020 X70 models at low prices. The Standard 2WD is listed for RM47,800, the Executive 2WD for RM49,800, the Executive AWD for RM56,700, and the Premium 2WD for RM58,000 – some sites offer the latter for as low as RM57,000. It’s a 40-50% decrease for a nearly 4-year-old model, which is expected. The Executive and Premium models have dropped over 50% but are limited outliers and have outdated engines.

In 2023, the X70 model has a high retention rate, with some listings even above the official pricing by Proton. Dealerships and sales agents use listing sites to sell the units. The prices range from RM113,000 to RM123,800, with one listing at RM127,152.

What this means is that there are no limits when it comes to listing items in the second-hand market. Sellers can choose any price they want, but ultimately it’s the buyer who decides whether to pay that price or not.

Individuals can lower prices to RM1, but it’s unusual unless it’s for publicity. Cars on sites like myTukar and Carsome need certification. The goal is to set an average price to avoid losses and sell all units.

The latter would not be possible if prices are so different. It is also to their benefit that prices do not go below a certain earning threshold. Single Owner Royal Enfield Bullet Classic 350 for Urgent sale, check out Price and Details.

Model’s resale value

Using Proton cars as a comparison, one may notice the difference in the second-hand price of the pre-facelift X70 compared to other models. The main factor that affects a model’s resale value is how rare it is and how much demand there is for it.

Proton’s customers mostly prefer affordable cars. The majority buy A and B-segment vehicles, which are popular in the mass market. The X70 isn’t a top seller because it’s in the C-segment. Comparing its sales to the X50 SUV and Saga sedan wouldn’t make much sense.

A top contender in the B-segment SUV category, the X50 comes in four variants starting at RM86,300. In November, Proton sold 2,115 units of this model, contributing to its success. Despite being launched almost two years after the X70 (in October 2020), the company confirms that the compact SUV remains a favorite among customers, with a total of 102,325 units sold overall.

On the other hand, the Saga, as part of Proton Intelligent Energy Synergy (PIES) models (which also includes the Iriz, Persona, Exora) continue to record impressive growth compared to YTD 2022, with a 34.3 per cent growth. Showcasing its enduring popularity among Malaysian car buyers the Saga stands atop of the PIES model having the highest units sold (6,349) and taking the lead as the second-highest model sales for the year.

A comparison of the two models reveals that their resale value could remain close to 100% initially, but then decrease as the models age. Despite this, the X70 has achieved a commendable 95,100 units in sales since its launch. It’s even more impressive that its resale value remains high compared to newer models.

Proton has known about this for a while. Also, the models will soon need an update, which will greatly impact their resale value and the year they were made.

Car’s future resale value

While it’s good to think about a car’s future resale value, it can often be more of a hassle than helpful. Focusing too much on getting a good return on your investment can leave you feeling stuck between difficult choices. There are many unpredictable factors to think about, but just a few car models, especially in the A and B segments, that consistently hold their value well.

By being cautious about risks, it’s best to pick a car that you know others will want when you decide to sell it. However, this might limit your options to the most popular models. If you prioritize enjoyment, it’s better to ignore the resale value when choosing a new car to buy.

Different people have different needs, and not all cars can meet those needs. It’s important to make the most out of your choice when selecting a car. Otherwise, only a few car models within a certain price range would be popular in the market.

We need to be realistic about what we expect to get from our purchase. For example, with the recent panic about the X70, it’s important to buy a car that you will enjoy and that meets your actual needs, instead of focusing on how well it will sell in the future.

It’s not realistic to expect a car to always keep its full value and only use it for one thing. That would limit you a lot.

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