Car valuation is more than just consulting a guide and setting a price. A used car can be as unique as fingerprints on a snowflake, depending on the personality of its previous owner.
Values too can be altered by a number of details you never even considered, from the current trends in automobile fashion to the age of the buyer.
By paying close attention to factors such as location, documentation, and economic climate, you can obtain the maximum value when you sell.
Going Beyond the Guide Price
One of the common dealer complaints regarding guides such as CAP or Glass’s Guide is the data is outdated by the time the book is published. Free online car valuations are more current, but often stale and incomplete.
The buyer’s market, after all, is made up of a diverse range of people, all with their own individual quirks, tastes, and desires for what they envision to be the perfect car. A truly thorough analysis takes into account everything that makes a car attractive.
Colour
This may seem superficial, but people are very particular about colour. An obscure colour in demand can drastically inflate the price and set it apart from competing sellers.
Mileage
Higher or lower than expected mileage for the year can affect your valuation. On average, a car is driven 10,000 miles per year with the market price at £30 – £50 per 1,000 miles for a typical car.
Documentation
Many cars on the lot are ostensibly in great condition, masking the damage and repairs. Having documentation and service history goes a long way to not only proving the car was well maintained but that its previous owner is the type of diligent, painstaking individual that files everything away and takes good care of their car.
Upgrades
Any quality accessories, such as adding a satellite navigation, leather seats, high-end audio system or sparkling alloys can add to the value of your automobile. Other options such as power steering and air conditioning are not really upgrades, given that almost all cars are equipped with them.
Fashion and Location
Certain brand models may be fashionable and fetch a premium price, such as the recent push toward eco-friendly cars. Location of dealerships also plays a role in adding value, such as a powerful 4×4 in a rural setting as opposed to the city.
Repair Costs
When the economy struggles, many consumers begin to scour the market for a discounted fixer-upper. Calculate the cost of work and weigh it against the value of a fully repaired car. It may be that leaving it alone makes it an easier and more profitable sale.
All of these factors can help augment or decrease the value of your car with regard to the book price as much as 10%. Going online and finding out what your car is actually selling for will also help you gauge the market. When you negotiate the price, keep these aspects in mind and decide an absolute minimum from which you won’t budge.
Separating Retail and Trade Value
The first step in car valuation is deciding whether you will test the open market or swap the vehicle at a dealership. The difference between retail and trade value is often referred to as “top book” and “bottom book.” When you trade in your car at a dealership, you will only get the trade price, regardless of its condition, as the dealer hopes to maximise his own profit.
If the dealership is offering more than the trade price for an exchange, it is likely a bargaining tactic to sway you into purchasing a more expensive new car. On the surface, you may rationalise this as a discount, but ultimately the point is to coax you into spending more than you intended.
You may feel an unhealthy attachment to your old car and the plethora of memories it holds. This may cause you to look upon it and determine its value should be much higher than the trade price. However, from the dealer’s perspective, it is simply another tool to turn a profit.
Even if the used car is in amazing condition, it will still require a number of servicing costs before it is showroom ready, including repair, valet, taxes, and warranty. If the car is tatty, it will likely be sold to a trader who will in turn put the car up at an auction or take the time to sell it in the open market.
Some car buyers will go so far as to parade their old car to various dealerships before they even settle on a car they want to purchase. By knowing the value of your current vehicle, you can get a better idea of what kind of new car you can afford.
Private Car Sale
While a dealership may provide an easier, less bothersome sale, a private car sale will almost always result in a better price. Nevertheless, the difficulty in marketing a private sale has been mitigated by the advent of the internet. By listing your car online, you can locate just as many potential buyers as a traditional dealership.
Then again, so can everyone else. So can the dealers. As a result, often times attracting potential buyers comes down to providing more information. The apprehension most people have when buying anything used, after all, is from a lack of knowledge regarding wear and tear. There is no guarantee that a 5-year old car isn’t in far worse shape than a 10-year old one of the same make and model. This is why a private car sale relies heavily on user documentation and written proof of maintenance.
Another thing worth considering is to obtain a professional valeting service to overhaul the interior, especially in cars with weathered dashboards and scruffy seating. There is a stark difference between clean and showroom level clean, and the visual condition of the car can greatly affect the price of the sale. This also goes for replacing the interior car mats and utilising repair products for various marks and scratches. Increasing the overall valuation will be worth the minor investment.
Make sure all the minor bureaucratic details have been handled. Again, not only does it make for a smoother transition, it reflects well on your stewardship over the car.
- Vehicle has a valid MOT
- Documentation of service history
- Road legal tyres
- Required road tax
Ultimately, the used car market is extremely competitive, and the best way to maximise your car valuation is to arm yourself with information. Familiarise yourself with the market. Learn what dealerships sell what cars and for how much, and whether that positively or negatively influences the book price. Even the season, such as selling a convertible in the winter, can affect the overall valuation.
While most sellers are content on just consulting a guide, equipping yourself with additional knowledge will help grant you leverage with both private buyers and savvy dealers.
