Top Hatchbacks with The Best Resale Value: Small In Size, Big On Value

Buyers consider a lot of factors when buying a new or used car. These factors include body type, fuel type, engine and transmission type and running costs. In the case of used cars, factors like the kilometres covered and number of owners are considered. Resale value and depreciation are important considerations for both new and used cars. 

In terms of body type, hatchbacks are not just the most popular used cars; they offer the best resale value and slowest rate of depreciation. 

What is Depreciation and Resale Value for Used Cars?

Depreciation measures the percentage of reduction of a used car’s value over a specific time period. Resale value is the monetary value of the car, after a specific period. For example, the depreciation rate of a used Hyundai i20 after three years is 37% and its resale value is around ₹ 4.45 lakh. 

Used cars depreciate the most during the first three years and tend to stabilize in the years that follow. Let's take a look at the hatchbacks with the highest resale values. For clarity, we have segregated hatchbacks in terms of used car prices. 

Most Valuable Hatchbacks Based on Resale Value and Depreciation

With data collected from CARS24 sales data and CARS24 Gears of Growth report, we can shed light on the hatchbacks with the highest resale value and the slowest rate of depreciation. Here’s what we found:

Used Hatchbacks under ₹ 5 lakh: Maruti Suzuki Wagon R

The Maruti Suzuki Wagon R is not just one of the top 5 best selling second hand cars in India covering 3.2% of overall sales, it also offers the slowest rate of depreciation. A pre-owned Wagon R holds 57.28% of its value in its fifth year, showing a depreciation of just 42.72%. 

The Maruti Wagon R shows a steady depreciation pattern, with a 26% drop in value in the first year as compared to 27% of its closest rival. Its 2nd and 4th year depreciation value is close to other popular used entry-level hatchbacks. The difference between depreciation keep reducing as the years go by, with the difference dropping down to less than 1% in the 5th year.

Note: The used car prices shown are calculated for vehicles MY 2014 and later and with mileage under ₹ 1 lakh kilometres. 

The Wagon R holds its resale value well thanks to its low maintenance and running costs. Also, Maruti Suzuki is a brand that’s synonymous with reliability and the Wagon R has carved a reputation as a reliable hatchback as well. 

The Wagon R is a popular hatchback, constituting 3.2 percent of overall used car sales in India. It is popular owing to the following factors:

• The boxy, tall boy design which offers maximum cabin and boot space in its segment. 
• Frugal and reliable 1.0-litre and 1.2-litre petrol engines. 
• Easily available CNG variants. 
• Low running costs thanks to good fuel efficiency and low service costs
• Low wear and tear and Japanese reliability. 

Used Hatchbacks under ₹ 8 lakh: Maruti Suzuki Swift

The Maruti Suzuki Swift is the most popular used car in India, occupying 5.8 percent of the market share. Its resale value and depreciation rate are important factors fueling its popularity. Like the Wagon R, the Maruti Swift holds its value well in the first two years. However, it has a slightly higher rate of depreciation from the third year onwards. 

The Swift loses 26% of its value in the first year which is comparable to entry level hatchbacks. In fact, it inches ahead of its rival, the Hyundai Grand i10 Nios which also has a fantastic depreciation rate. A pre owned Maruti Swift retains 63.37% of its value in its third year of ownership and 56.73% in its fifth year of ownership. 

Note: The used car prices shown are calculated for vehicles MY 2014 and above and with mileage under ₹ 1 lakh kilometres. 

The Swift is the most popular used car in India, a factor which boosts its resale value. Besides sporty looks, its frugal petrol and diesel engines as well as a choice of manual and automatic transmission options make the Swift a preferred buy. The Swift is one of the most reliable hatchbacks in its segment and also impresses with its low running costs. 

There are many factors influencing the Swifts' popularity. Here are some of the important ones:

• The sporty styling coupled with premium feel in later generation models. 
• Frugal petrol and diesel engines with a choice of manual and automatic transmission options. 
• Low running and maintenance costs thanks to affordable service and parts prices. 
• Typical Japanese reliability in bodywork and engines. 

Used Hatchbacks under ₹ 12 lakh: Hyundai i20

While Maruti Suzuki dominates the hatchback segment, Hyundai has carved a name for itself both in the new and used car arena. The i20 is in the top 10 list of most popular used cars in India. The premium hatchback’s popularity enhances its resale value and slows its depreciation, which is similar to the Wagon R and Swift in the first two years of ownership. 

Interestingly, while Toyotas have the least amount of depreciation, the i20 beats the Toyota Glanza albeit by a slim margin. Like other premium hatchbacks, a pre owned i20 loses most of its value in the 3rd, 4th and 5th year of ownership. The hatchback retains almost 64% of its value in its 3rd year of ownership and 57% of its value in its 5th year of ownership.  

Note: The used car prices shown are calculated for vehicles MY 2014 and above and with mileage under ₹ 1 lakh kilometres. 

 The i20’s premium feel and fantastic build quality help boost its resale value. The premium hatchback impresses with its blend of space, features, quality, reliability and smooth petrol and diesel motors as well as a healthy dose of manual and automatic transmission options. 

The i20’s popularity stems from many factors. Here are the important ones:

• Premium styling and fantastic build quality. 
• Spacious interiors with an upmarket cabin and large boot space.
• Host of class leading features. 
• Smooth and reliable petrol and diesel engines.

Conclusion

As a bodytype, hatchbacks offer better resale value and a lower rate of depreciation. There are a lot of factors that affect used car prices, like car body type, brand, variants, engine type, running costs, reliability, mileage and number of owners. 

Under ₹ 5 lakh, a used Maruti Wagon R has the least depreciation rate making it the most valued used car in that bracket. The hatchback is popular for its space, reliability, low running costs and practicality. 

Under ₹ 8 lakh, the Maruti Suzuki Swift offers the least depreciation. The Swift is popular thanks to its sporty body style, value for money quotient, reliability and low running costs. The Hyundai i20 offers the most value for second hand hatchbacks under ₹ 12 lakh. It is preferred for its premium styling and cabin, high quality materials, reliability, cabin and boot space and a choice of refined engines and transmissions. 

A lot of factors affect resale value. However, the three cars here share a few common attributes that affect resale value. Attributes like brand value, reliability and low running costs that mainly define the resale value and rate of depreciation of a car.