To crack down on wealthy residents living in public housing, it was reported that the Housing Bureau will pay closer attention to vehicles parked in public housing parking lots and consult with the Transport Department to gather information on vehicle prices. If it is found that the vehicle belongs to a public housing resident, the value of the private car will be included in the asset calculation. But can the value of a vehicle really be determined solely based on the records from the Transport Department? What are the factors that influence car prices? Today, Kwiksure will share with you the 5 factors that can directly affect a vehicle’s value.

Are Luxury Cars Always Expensive?

Brands like Mercedes-Benz and BMW have always been considered luxury vehicles. A brand new Mercedes-Benz or BMW can easily cost hundreds of thousands, even over a million. However, it's not hard to find a used Mercedes-Benz or BMW on used car websites for just tens of thousands of dollars. Why is it that a new car valued at hundreds of thousands of dollars can drop to just tens of thousands on the second-hand market? Here are 5 factors that might directly affect a vehicle’s market value.

1. Vehicle Brand

A vehicle’s brand is one of the key factors influencing its value. For example, German brands are more popular among Hong Kong car owners than Japanese brands, so new car prices for Mercedes-Benz, BMW, and Audi also tend to be higher. However, Li Yiu Pui, Honorary President of Hong Kong, China Automobile Association, states, "You cannot evaluate a car based solely on its brand; you must also consider factors such as ownership duration and the number of previous owners."

2. Manufacturing Year

Newer vehicles are generally in a better overall condition, reducing the need for major repairs, which also makes the car more valuable. However, used cars in Hong Kong depreciate relatively fast. For example, a 7-year-old BMW 2 Series tourer may retain only 20% of its original value due to high maintenance costs. By contrast, a 7-seater Japanese vehicle of the same age might retain more of its value because it’s more popular among users and has lower maintenance costs, resulting in less depreciation. Therefore, the effect of the year of production on a vehicle's market value also depends on its brand and type.

3. Mileage

Vehicles are consumables; the more miles a vehicle is driven, the greater the wear and tear, increasing the chances of needing repairs and lowering its value. Generally, in Hong Kong, an annual mileage of around 10,000 to 15,000 km is considered normal, and exceeding this range can lower a vehicle's value. So the market value of a vehicle is not something that can be judged solely based on its brand or look.

4. Number of Previous Owners

In Hong Kong, there is a common perception that the fewer previous owners a vehicle has, the higher its value. However, the number of previous owners does not fully reflect the condition of a vehicle. The crucial factor is whether the previous owners have maintained the vehicle properly. If the vehicle lacks regular maintenance, even a car with few previous owners could still develop significant mechanical issues.

5. Vehicle Type

In recent years, electric vehicles (EVs) have become mainstream in the car industry, with new car prices continuously dropping. Although the government has reduced the cap on the first registration tax concession for EVs (under the "One-for-One" scheme) from HK$287,500 to HK$172,500 starting April 2024, many people continue to be attracted to EVs, which directly results in a continuous decline in the market value of used petrol vehicles.