Car Valuations: All you need to know
Here’s our rundown on how used-car values are affected by various factors.
- Valuation is market-led
Although there are several sources that give ‘book’ prices on used cars – factoring in mileage, condition, age and engine type – in general it’s the prevailing market forces that lead to a used car’s exact value. Or, in other words: look at people who are selling similar vehicles. If you’ve got a 2012 Ford Fiesta with 100,000km on the clock, and you see a 2011 Ford Fiesta with 110,000km on the clock for €7,000 and a 131 Ford Fiesta with 90,000km on the clock for €9,000, chances are yours is going to be worth €8,000.
- The lower the mileage, the higher the value
Since the turn of the millennium, it has been a fact that cars are no longer as fragile as they once were – they can now tick off 160,000km, 200,000km, even 250,000km with little difficulty (as long as they are correctly maintained) and there is no theoretical maximum limit to a car’s eventual mileage; any car could do a million kilometres and more, with the right care and attention. However, whether it’s a residual hangover from the old days of the 20th century or what, buyers still prefer a car with lower mileage showing. So if you’ve got two otherwise absolutely identical vehicles (in age, colour, trim, engine, condition and number of owners), but one has done 150,000km and the other has done 200,000km, the former will be worth more than the latter.
- High-spec equals higher price
Another one that might seem obvious, but people in the second-hand market prefer Titanium Fords to Zetecs, they want S line Audis and not SEs, they’re after Sol Toyotas instead of Luna-grade models. But don’t lie about it – if your car genuinely was high-spec when new, by all means big that up in any advert, yet don’t pretend you badged-up BMW 316i SE with M tricolour badges is an M Sport, as savvy customers will find you out quickly.
- Service history essential
Maintenance, maintenance, maintenance. Buyers want to see evidence of regular and scheduled upkeep, so don’t scrimp on servicing when the time comes. If cars are to have any chance of living the long life we mentioned above, they need to be cared for during the time they are clocking up that distance. Cars with big gaps in their service history sound alarm bells for potential buyers.
- Lots of owners reduces the value
A weird one, this, as many sports cars are bought as short-term ‘fun’ purchases and can switch hands through several owners as a result, without anything being wrong with them. However, the second-hand market’s perception is that, if a car has an abnormally high number of owners, then something expensive must keep malfunctioning on it and so owners in the past have got rid, rather than fixed it. If you’re buying second-hand yourself, try and bag a one- or two-owner car, as it’ll be easier to shift it on down the line than a seven-owner example of exactly the same vehicle.
- Repair it before sale
Scuffs on the bumper, dents on the panel, tears on the seat upholstery – none of them affect how a car operates, but signs of physical damage send a subliminal message to buyers that you haven’t bothered to look after the car properly during your ownership, even if you’ve got a fully stamped service book to prove otherwise. You might be happy to live with that ding on the rear bumper where you reversed into a bollard three years ago, for instance, but that’s no reason to expect the potential next owner of your car to put up with panel damage. Therefore, make any repairs your car needs before sale, as long as it is truly economical to do so (i.e., you’ll get more than double what you paid on repairs back when you eventually sell the car), and you’ll get a better market value for the vehicle than you would with the damage on it.
- Keep it clean
Linked to the damage point above, a dirty car or one with a grotty interior filled with rubbish and detritus is not going to sell quickly at all – even if, underneath all the mess, the vehicle is pristine. It once again sends entirely the wrong message if you attempt to sell your car with a load of road grime encrusted on it and a cabin that’s ankle-deep in discarded McDonald’s wrappers, so wash the car and thoroughly clean it out before you come to sell, otherwise you’re going to lose hundreds of Euro on the asking price.
- Timing is everything
Certain cars sell better at certain times of the year: convertibles fetch more money in spring and summer, when the weather is warmer, and 4x4s are in demand as autumn rolls into winter. If you’re selling a particular type of vehicle, do your research on when is the best time of year to sell it and you will get a better valuation on the car when the time comes.
- Trade-in prices are lower than market prices
Let’s say your car is worth €10,000 on the open market, if you decide to sell it yourself. You find this fact out and think you might, instead of all the hassle of listing it yourself and then showing prospective buyers around the car in an attempt to shift it on, just take it down to your local used-car dealership and see if they’ll take if off your hands for you. If you do, don’t be shocked when the dealership only offers you seven grand for it. Trade-in values are lower than market values, it is as simple as that, because they are a mechanism for a trade seller to get you to buy a newer, more expensive product from them in the first place. And then there’s all the work the trader will have to do in selling your old car on – getting it cleaned up for sale, putting it on their forecourt, showing buyers around and adding a warranty. The trader factors all of this extra work into the price they offer as a trade-in, and also the fact that they want to make a bit of profit off the sale too; they are, after all, running a business, so if buying your car from you and doing all the sales work costs the garage €8,000, they’ll be looking to sell it for €10,000 to make their money.
Carzone - 13-Aug-2020