Busted: the myth that Volvos have poor resale values

Busted: the myth that Volvos have poor resale values

“Volvos have poor resale values.” This is the statement that is still heard sometimes in South Africa. Yet, nothing could be further from the truth.

The reality is that the brand performs exceptionally well in the used car arena and many Volvo models are best-in-class when it comes to resale values.

According to Greg Maruszewski, Managing Director at Volvo Car South Africa, the perception of poor resale values for Volvos is a uniquely South African problem. “This situation doesn’t apply anywhere else in the world.

On the contrary, Volvos are perceived to have good resale values in other markets – and this is also the reality in South Africa. In Europe, dealers don’t want the cars to cross borders, so they will often pay a premium to retain them. However, turning to the local situation, possibly because of a legacy of low resale values, some South Africans believe that this remains the case today. And it certainly doesn’t!” he comments.

While three-year-old XC40 and XC60 are best-in-class when it comes to resale values, one-year-old Volvos retain a presentable 87 to 90% of their Manufacturer Suggested Retail Price (MSRP).

But what factors influence resale values? This is a somewhat complex issue – because values are affected by both tangible and non-tangible factors. The perception of the brand and the popularity of the model, for instance, come into play. So too does the vehicle’s condition, mileage, engine type and transmission (most people want an automatic). Awards can also play a role – the XC40, XC60 and XC90‘s bulging trophy cabinets have also bolstered their resale values.

Kriben Reddy, head of Auto at TransUnion Africa, says that several Volvo models retain strong resale values when compared to their competitors in the local pre-owned vehicle market.

Volvos are becoming increasingly popular on our roads. They put a lot of focus on the SUV segment and are strategically offering the South African consumer attractive, high-specification vehicles at significantly lower prices than their rivals. This is going to drive higher resale values as more consumers see the value in these remarkable vehicles,” said Reddy.

Then there are some cars that are simply star performers in the used car market. The Volvo C30 is one such case; you would generally pay over the book value, and you will sell over book value too. Buyers take great delight in acquiring one of these Volvos – because you get a lot of car for relatively little money.

However, ultimately, resale values can be impacted by training and education. For this reason, Volvo Car South Africa regularly educates both its dealer network and used car managers from outside of the network, who trade in Volvos. Focus areas include performance and safety as well as pricing (Volvo has implemented fewer price increases than some German rivals). It’s a case of informing/educating, managing perceptions and – most importantly – debunking myths.

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