Fleet News

Extra spec: pricey treat or sensible investment?

ON the face of it, ticking every box on the options list should make a car more valuable at resale time. In reality, it could well be a waste of money.

According to the latest research by Manheim Auctions, choosing the wrong optional extras – or failing to specify the right ones – could drive down values by thousands of pounds.

A survey of Manheim buyers showed that the right colour metallic paint and the purchase of satellite navigation added more than £500 to the value of an average one-year-old executive car.

But the absence of leather upholstery, which is expected by most buyers in the prestige sector, can reduce values by a similar amount.

Choosing the right gear, especially in the premium sector, is a key decision. A Manheim spokesman said: ‘Most alarming is the huge price reduction which the market makes for manual transmission on younger executive cars. The average price reduction, across all buyers surveyed, was a staggering £2,133 with some saying that it could negatively affect values by as much as £3,500.’

Satellite navigation and leather upholstery add around £300 and £250 respectively on family cars while executive cars average almost £450 and £330 respectively.

The right colour of metallic paint in this sector is also seen as very important, increasing values by up to £475 with a sunroof also contributing around £250 to the car’s value.

Of course, the system may cost more than £1,000 but, then, so may a sporty body kit. The satellite navigation, however, will be worth consistently more at resale time.

Rob Barr, Manheim’s group communications and strategy director, said: ‘This research into the impact that optional extras have on residual values simply reflects what the buyers think and, as it’s buyers who determine the price, the message is simple, fleets must take this area into account when buying company cars.

‘The executive car sector in particular highlights both the profound positive and negative impact on values of the optional extras fitted.

‘In theory no fleet operator should really buy an executive car without a popular metallic paint finish, satellite navigation and leather to ensure they optimise residual values.

‘Where not standard, climate control is also desirable, as is a high specification media/audio system. This is the situation today and you can be sure it will become even more important in the next few years.’

Return on investment: option winners & losers

Winners

  • Air conditioning

  • Alloy wheels

  • Metallic paint

  • Satellite navigation

  • Leather seats

    Losers

  • Parking sensors

  • Sun roof

  • Body kit

  • Xenon lights

  • Upgraded audio systems
    Source: CAP
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