Car Features that Matter Most at Trade-in Time

It’s been a while since new-car shoppers had the option to pick and choose major options when purchasing a vehicle. But, not all that long ago, things were different.

Go back to the Eighties, and such now-standard equipment items like air conditioning, automatic transmission, radio/stereo, and on some import vehicles, power steering and power brakes, were optional. That stuff’s all standard, now.- Car Features that Matter Most at Trade-in Time

Features that Matter Most at Trade-in Time

Additionally, especially on American cars, consumers could choose from a host of engine options, each raising the price, but also bringing more power and, in some cases, refinement.

How a car was equipped could have a profound impact on its value come trade-in time. An Oldsmobile Cutlass Supreme with a V8 engine and air conditioning would have commanded much more money than a similar example with a V6 and no air.

Today, cars are commoditized, with most new vehicles fitted with more-or-less the same equipment, save for luxury features and trim levels. Still, there are a couple of ways to equip a car at purchase time to help improve trade-in value down the road.

Of the two most impactful resale-value features are AWD, and a hybrid powertrain.

Let’s look at each of these options and examine their value come trade-in time.

AWD

Cost new: $1500-$3000

Value at trade-in time (5 years): $1000-$2000

All-wheel drive is an interesting feature because its value is regional. Folks living in Chicago—or anywhere in the Snowbelt—fully appreciate the sense of security an AWD system brings them when the snow starts falling. That said, AWD always adds to the value of a trade-in, it just adds a little more in Northern states.

Upgrading to AWD generally adds around $2000 to the bottom line, but the feature can be significantly more expensive on some European luxury models and/or performance cars.

At trade-in time, an average 5-year-old crossover with AWD will typically bring at least $1000 in additional value, and sometimes as much as $2000, making the option almost free to own. Note, however, that AWD typically lowers fuel economy by about 1 mpg.

What we are not talking about here are the 4WD systems found on pickup trucks and large trucks (think Chevrolet Tahoe or Ford Expedition). The 4WD options on those trucks can cost much more than the AWD setups found on most crossovers, though the resale value improvement realized from having 4WD is similar.

Hybrid

Cost new: $1500-$4500 (Typically $2000-$4000)

Value at trade-in time (5 years): $2000-$4000

With gasoline prices cresting at historic highs, consumer interest in hybrid-powered vehicles has increased as well. For those not in the know, hybrid cars and crossovers are gasoline-powered vehicles with systems that collect some of the energy wasted through slowing and braking, and use that power—stored as electricity—to help power the vehicle via an electric motor. You can read more about how hybrid vehicles work here.

Despite adding $1500 to $4500 (though $2000 to $4000 is typical) to the price of a new vehicle, hybrids have become much more popular in recent years, and have surged in demand since gas prices increased earlier this year. One recent survey suggests that hybrids will make up more than a third of all U.S. new-vehicle sales by 2030.

There are few safer new-car options than going hybrid, at least financially. Currently, 5-year-old hybrid vehicles are commanding as much as $4000 more than similar non-hybrid cars and crossovers. This means that going hybrid costs car owners virtually nothing.

Additionally, as hybrid vehicles typically use about a third the fuel of non-hybrid vehicles, owners should be coming out ahead. Also, in many cases, hybrid vehicles delivery better acceleration than their conventional counterpart. Truly a win-win-win situation.