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Resale value of luxury vehicles

By Charles Hopkins Published 05/18/2006 | Auto and Trucks

Resale value of luxury vehicles

Several factors decide the resale value of luxury cars. These include the brand name, the condition of the car, the accessories, the styling and the cars value relative to other cars. The trends in the luxury car segment, the snob value and the launch of new cars also have an effect on the resale value.

However, brand name continues to be an important factor. The presence of the three-pointed star the Mercedes logo is like insurance. You can be sure that the resale value of Mercedes will be much more than other luxury cars. For instance, the stylish convertible Mercedes Benz CLK320 fetches 65% of its showroom price even three years after its sale.

Interestingly, the entry-level luxury cars and the high-end luxury cars also command high resale value. Besides this, sporty convertibles and coupes with graceful curves, such as the BMW 330 and Infiniti G35, retain their value longer than other luxury cars.

Other than the brand name, most buyers look for a car with excellent styling. This is where the sports utility vehicles win. The high resale value of these cars is attributed to their sturdy frame and high class interiors. An added benefit is that they can be run on any terrain. Demand and supply also plays a role here. Thus, there is a higher demand for luxury crossover SUVs than for the conventional SUV trucks due to low availability.

The resale value is low also for out of date models as for those luxury cars that are low in the pecking order. Extra features like power windows, automatic transmissions and third row seats (SUV) can certainly increase the resale value of a car.

Surprisingly, technologically advanced luxury cars that sport laser guided cruise control, all wheel drive, navigation system, built in cell phones enjoy a lower resale value than other cars in the same segment. A major reason for this is that by the time the cars are sold the electronic equipment has been replaced by new generation electronic gadgetry. The buyer is not keen to spend money on equipment that has become outdated.

However, there are some luxury cars that will always rank the favorites of car lovers irrespective of their features and age. These include BMW30, Infiniti G35, Mercedes-Benz's midsize E-Class cars. All these are a byname among luxury cars. The high value of these cars can be attributed to factors like high mileage, reliability, excellent exterior styling and great interiors.

ALG is a company in the US that calculates the resale value of most luxury cars using their showroom value, mileage and other additional features. However, a few high end luxury cars such as the Bentley Continental GT or Maserati Quattroporte or Rolls-Royce Phantom are not taken into consideration by the ALG since they are produced and sold in low numbers. Given this fact, their resale value is invariably high.