The residual value of your new car

residual value

For the last few days I have been hearing the ad on the italian radio for the new Alfa Romeo Giulietta and the part about maintaining its value in the used car market according to Eurotax and Quattroruote (the most important italian automotive newspaper) really caught my attention.

I wondered: is it really true what they’re saying in the Giulietta ad? And, if it is true, why advertise it during a new car ad?

Probably, in today’s market situation, the Giulietta is in great demand and there’s a shortage of used ones since it’s only been on the market since last year and there are very few people who sell their cars only one year later.

What purpose is there for those who are buying a car today and will sell it in three or four years to know that Quattroruote and Eurotax say that it is the car that maintains its price the most on today’s used car market?
Knowing this information could be useful for those who are deciding to sell their Giulietta today, who purchased it a year ago, but it’s meaningless to someone who is undecided about buying one. Personally, I see it as an advertisement that makes the consumer think something that is not true or at least something that is only true today but insignificant for the future. As soon as I heard the ad I was led to believe that if I were to buy a car today in the C segment, I should choose a Giulietta considering the enormous quantity of money that is lost when reselling a car. Upon reflection, however, I also had some doubts on the method for appraising a used car.

For the Italian market, Eurotax relies on Sanguinetti Editore who operates using the method described on their website:

They collect data through correspondents who interview a network of official dealers, 450 to be precise and continually expanding, who are interviewed for the individual brands only, on the premises of the sales network for that particular brand, in order to avoid abnormal judgments dictated by competition.

Once the data is collected it is processed by specialized editors who establish the prices; they aren’t calculated on the application of fixed depreciation percentages but on the weighted average of the values applied in the various areas, depending upon supply and demand.

Are the dealers truly the intermediary between the manufacturer’s interest and the customer’s interest as they claim?

It is logical to think that if an Alfa Romeo dealer is interviewed he will tell me that he has received numerous requests for a used Giulietta and quite a few less for a Golf, and vice versa.

Wouldn’t it be better, in the interest of the customers, to refer to unofficial dealers or those who perhaps deal in only used cars, in order to gather more realistic data?

And how much influence do demo cars have on used car appraisals?

Paolo Camerin

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