Do Base or Fully Loaded Models Hold Their Value Better?
The features you choose when you buy can help—or hurt—when you sell.
Genesis
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When you're buying a new car, selling it probably isn't top of mind. But assuming you don't drive your vehicles into the ground, you might decide to trade or sell in the future. So it pays (literally) to think carefully about the trim level and features you choose now to make sure you get the best resale value later.
What is Resale Value
In its simplest terms, the resale value of a vehicle, according to Kelly Blue Book, is the projected market value of that used vehicle when it's sold. Factors that influence resale value include vehicle type, age, condition, and trim level.
"Models that have a large MSRP difference from the base trim to the top trim are more likely to have a larger difference in residual value as well," said Michelle Krebs, executive analyst at Cox Automotive, KBB's parent company.
But that doesn't mean you have to go out and buy the most expensive model of the most expensive vehicle. There are other factors to consider, including the specific features you choose. Some are more desirable upon resale than others.
Features That Hold Their Value
Eric Lyman, vice president of JD Power, a global leader in consumer insights and advisory services, as well as data and analytics, says buyers shouldn't view a car as an investment, because it's a depreciating asset. In other words, it loses value over time.
Still, knowing which features are likely to hold their value can help you minimize that loss. In that regard, technology is key.
"Tech items that really revolutionize the driving experience have become very well received in both the new market and the used market," Lyman said.
Features like Apple CarPlay and Android Auto come standard with many base-level mainstream vehicles today, and can draw more resale dollars in the future. Fancier niceties often considered luxury amenities that appear more frequently in upper trim levels, like blind-spot monitoring, around-view cameras, and other advanced safety technology, such as rear cross-traffic alert and adaptive cruise control, also fall into that "holds value" category.
In fact, Lyman said, when you sell, the extra depreciation from not having some of these features could outweigh what they would have cost to add in the first place.
Aesthetics matter as well. "Features that really transform the way a vehicle looks from a styling standpoint we also see have been doing really well," Lyman said. These include such visually appealing options as bigger wheels, black-out treatments, and smoked chrome.
Skip the Fluff
While some visual upgrades do have value, Lyman says other upscale elements—splurges such as quilted leather seats, extra interior chrome accents, or lighted sill plates—don't resonate as well with value-oriented, used-car buyers.
He also cautions against over-customizing your vehicle.
"Any feature that is custom to you, that makes your vehicle unique and makes it your own is going to be difficult to sell, because you have to find another person who has that same, unique interest and desire to own that vehicle as you did," he said.
Be Careful With Color
Generally speaking, the advice to avoid unique and custom choices also applies to paint color, especially if you're talking about a mainstream vehicle.
Automakers often roll out a bold, signature color for a vehicle's first model year—the nearly fluorescent Sao Paulo Lime on the Genesis GV60, for instance—and while that color may be a "wow" right now, Lyman points out that it may no longer be on trend when it's time to sell.
That's why you see so many white, gray, and black vehicles on dealer lots. Those colors never go out of style.
There is an exception to this rule, though: colors that are normally seen only on sports cars and other low-volume sellers. As a recent study by iSeeCars.com points out, colors such as yellow, orange, and purple are among the least-popular car colors overall, but because of their novelty and perceived exclusivity, buyers are willing to pay a premium for them on the right car.
Base vs. Fully Loaded
Even though base models in today's market are generally well-equipped, some will still lack the must-have features drivers have come to expect. Leveling up will often ensure their inclusion and add to your car’s resale appeal.
"Consider the Honda Accord LX, for example," Krebs said. "The LX is the base and well-equipped. However, when adding leather, better sound system, panoramic roof, and hi-tech cruise control, the vehicle will change to an EX-L Touring Sport. This also changes the MSRP, of course, but the EX-L Touring Sport will bring notably more money in the secondary market when compared side-by-side to its base counterpart."
Because vehicle condition also plays into resale value, higher trims are particularly appealing in the truck world. Decked-out trucks are less likely to be used as straight work vehicles, which means less wear and tear.
The Goldilocks Effect
The moral of the resale value story is this: Don't over-customize, but don't cheap-out either.
If you opt for a mid- or high-level trim rather than a base model, you'll likely get more money back when it's time to trade or sell. Add all the safety tech you can. And perhaps most important: if you want to see as much green as possible when you go to sell, you might want to skip the neon yellow when you buy.
