Do apps really improve the resale value of cars?


Written by: Matthew Freeman

Should motor manufacturers be doing more to incorporate technology for the “app” generation in order to improve the resale value of their cars?

Given the profitability of tech companies, it’s not surprising that car makers are in awe of their success. In August the buzz surrounding the launch of the iPhone6 drove Apple’s share price to record highs – when was the last time that happened to a car manufacturer?

But it’s a mistake to think that mimicking companies like Apple will see some of their magic rub off on them. And automakers are always looking to build credibility with the next generation of drivers and buyers.

There are four issues to take into account on this.

Firstly, many apps are best classed as entertainment – if it’s not acceptable to play them on your smartphone when driving, you probably shouldn’t be playing them on the screen of your centre console!

Secondly, those apps which are functional, like satnav systems or DAB radio, are also potential sources of revenue for car makers, so do they really want to lose a source of revenue by facilitating a cheaper alternative?

Thirdly there’s the issue of security – cars are so reliant on electronics that a virus protecting cars from viruses is a major concern for car makers, and this could be a weak point in the system.

Fourthly there’s the matter of obsolescence – cars have a 5-7 year cycle, whereas some people change their smartphones annually or every couple of years and apps come and go in popularity, so integrating this technology is likely to have little if any impact on residual values after three years.

It’s probably a better strategy to ensure that consumers can make as much or as little use of apps to ensure your products are as attractive as possible.