auto

Can a car's brand image hurt resale value?

Tara Baukus MelloDear Driving for Dollars,
I've never really paid attention to a car's brand image when I have bought a car, including any of the brand perception awards that some auto manufacturers advertise. I always figured that if I did good research, I could buy a car that suited me and that I could sell it for a decent amount down the road.

But my current car doesn't have such a good image right now, thanks to some car recalls and some overall issues with the car brand. I was just looking up its value online because I'm thinking of selling it, and it's worth a lot less than I imagined. Can a lousy image affect a car's resale value?
-- Eddie

Dear Eddie,
You can find out the resale value of car models that you're considering, but an unexpected event can put a dent in the price that you can ask for that car.

According to ALG, which calculates so-called residual values and provides them to dealers, lenders and others in the industry, a car's brand image is a factor in calculating its resale value. In fact, ALG has created its Brand Pricing Score to help those in the industry understand how various brands are affected by the same factors.

You were right to call out the car recalls and overall issues with the brand of your car as factors affecting your car's resale value. When you buy a new car, it's a great idea to do online research about the projected resale values for the cars you are considering. However, those numbers are only projections and, while there's a lot of research and data behind them, they aren't foolproof. That's because no one can factor in the unexpected, such as a major recall, especially one that has negative publicity attached to it. The same holds true for an economic event, such as the big spike in gas prices that caused many people to want to sell their sport utility vehicles in favor of smaller, more fuel-efficient cars.

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If you have a car question, email it to us at Driving for Dollars. Read more Driving for Dollars columns and Bankrate auto stories. Follow her on Facebook here or on Twitter @SheDrives.

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