How To Get Your Car Valued Before Selling It
How to Get Your Car Valued Before Selling It
How much is your car worth right now? Most people have no clue what their car’s current value is. Figuring out your car’s value is the first step to selling it. But there’s more to a car valuation than estimating what you think you deserve for the car. From demand and market conditions to your car’s overall condition and even its colour, getting your car valued before selling it requires an understanding of how to get it right.
If you’re considering getting your car valued, there are more ways than just getting a free online valuation. By establishing a more in-depth and comprehensive view of the existing worth of your vehicle, you can obtain a clearer idea of what else you can do to boost its value before selling it and how much you could really be getting for it.
This quickfire guide on car valuation will help you get started nailing down a reliable number for your wheels. Whether you’re planning to sell or are just interested in finding out what your car is worth, calculating your vehicle’s value with accuracy and confidence is always a good idea.
Why you need to get your car valued
Before you sell a house, you must ask somebody to come and tell you what it’s worth. Nobody sells classic art without knowing how valuable it is. And if you’re looking to sell old jewellery, you’ll want to know what most people are willing to pay, rather than how much the one jeweller you visited is offering.
The same goes for cars. Like a home, art or jewellery, cars are valuable items that are in demand and worth good money. Since people are willing to buy your vehicle and are prepared to pay a decent sum for it, you should know the value of this opportunity.
Keeping track of an important asset
Managing your money means knowing what you’re worth. If you can accurately tally up your assets, you can control your money more effectively and manage your finances better. This means understanding what one of your biggest ticket items – your car – is doing for your overall wealth.
Getting your car valued will help you decide whether you even want to sell it in the first place. Find out your car is worth a whole lot more than you thought, and you’ll be able to upgrade to a nicer ride. Discover that your wheels are worth less than you hoped, and you may think twice before investing heavily in keeping it going.
Insurance
Another reason for getting your car valued is for insurance purposes. Insurance companies need to know how much they’d have to pay out to replace your vehicle if it is written off. So they take its value and calculate a premium you must pay every month that they believe will cover the risk of you claiming.
What many insurance companies count on you to forget about, though, is depreciation. As your car gets older and you drive it more and more, its value slowly decreases. However, many people are paying insurance premiums based on the initial insured value of their car rather than the current amount. Getting your car valued allows you to revise this amount with the insurance company, lowering your premiums.
Capital
Cars are assets, and assets represent capital – money or leverage you can use to buy other things or pay off important items. These assets can be exchanged for cash (selling), swapped for something else (trade-in) or used to pay off debts. Either way, an asset is only worth as much as its value, so you will want to know how much that is before you can do anything with it.
This capital can then be used to purchase new assets – like a new used car to replace the one you just sold – once it has been converted into cash.
The difference between your car’s price and its value
Many people confuse a car’s value with its price. The two are not the same, and they represent different measures of the worth of the car.
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Car price – What you paid for the car or the amount a dealer will likely try to sell the car for. Price usually includes profit margins, commissions and fees and any other costs and expenses.
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Car value – How much most people, dealers or institutions are willing to pay to you for your car if they were to buy it from you or you were to trade it in. This metric is determined by looking at many elements and changes over time.
While a car’s price is a great guide to its value, it is not an accurate representation of a vehicle’s worth. It should only be considered later on in the car valuation process.
Types of vehicle value
There are various kinds of car value that it is important to understand. While you should be aiming to establish a single number for your car’s value, dealers, potential buyers, and financial institutions use different methods for calculating your vehicle’s value, across different valuation categories and for different purposes.
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Book value
The book value is the general price guideline used by the automotive industry, financial institutions and insurance companies to assign an approximate value to a particular vehicle make and model based on M&M codes*. This value is pegged to a typical model in average condition and with an average mileage based on its manufacturing year.
*M&M Codes - M&M codes are given to each car model and are used to track and update the general pricing guidelines. Data is constantly collected from the manufacturer, dealers and auction houses to update the book value of different models using M&M codes.
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Trade-in value
The car book value is also often used as a trade-in value. In other words, how much a dealer is prepared to discount a new vehicle you want to buy using the value of your current one in exchange. The trade-in value is often very close to the car book value, but different dealers may change it based on inventory, demand, and your car’s condition. Here's a little more on what it means to trade in your car.
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Market value
The market value for your car represents the actual price you could get for selling it. This value is determined based on your particular car. It is calculated by estimating how much you could stand to get for selling your car in a competitive or open market. The market value will generally be higher than the trade value of your car, but less than its retail value.
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Retail value
This is the price that the dealer stands to get for selling your car to someone else. It is usually higher than the market value (what the dealer paid you for it) since it includes their profit, servicing, advertising and other investments the dealer has made to sell it.
Things that affect your vehicle’s value
While most dealers or buyers rely on the car book value of a model as a starting point in establishing a car’s value, each vehicle is different. Some have higher mileage than others, some have been involved in accidents, some are in high demand, and some are in bad condition.
There are many different things that buyers consider when determining a car’s value, but some of the most impactful ones that make the biggest difference include:
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Mileage
Lower mileage means more value. While some cars are built to last, other makes have developed reputations for starting to cause issues after having covered a certain number of kilometres.
Mileage also indicates how much work the car has done by looking at its manufacturing year and calculating how far it travelled on average annually.
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Modifications
Modifications and customizations kill car value. Spoilers, paint jobs, road kits, engine enhancements – all are bad news when trying to maximize your car’s value. Unless you’re driving a rally car, remove and repair any modifications or try to avoid them altogether. Some smaller changes are OK, but they’ll need to be declared and should only improve the car overall.
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Condition
From dings and dents in the bodywork to the state of the seats and the health of your rims, the better the car’s condition, the higher the value. If you’ve managed to look after your vehicle or have replaced any worn or broken components, you’re likely to maintain a higher value for the vehicle. This is the big differentiator between used cars of the same model on the market.
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Demand
Believe it or not, demand plays a big role in your car’s value and is an important influencer of those M&M codes. High demand for a vehicle model increases its value, as does lower supply. However, when demand drops, or there is an increase in the supply of a particular model, its car book value comes down.
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Economic climate
The economy can impact your car’s value, too. When interest rates, inflation and unemployment are high, people are less likely to buy things like cars, meaning retail values are lower, bringing your car’s overall value down as well.
How to get your car valued before selling it
Getting your car valued can be as simple as using an online car valuation calculator, but you’ll only be getting a very rough estimate of its book value. Other online tools and companies will provide a free valuation for your car and even offer you an amount to buy it.
However, investing a little more time and effort in getting your car valued before selling it will help you to ask for a fair price. Here are some useful ways to get your car valued accurately.
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Know how much you paid for it
Remember the agreed price you settled on when buying the car. Whether you got it new or as a pre-owned vehicle, knowing this price as the starting point in your car valuation is critical. If you still have the original proof of transaction, keep it handy.
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Consider outstanding costs
Is the car still being financed, or does it require any repairs or servicing work? These outstanding costs will need to be taken into account when valuing your car. While they won’t necessarily play a role in the physical value of the vehicle, they will affect how much you’ll make for selling it.
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Work out the car book value
Look up the M&M code for your vehicle and find the corresponding car book value. There are different resources for doing this online – here’s a great place to begin - or you can ask someone to provide you with one. You should have your vehicle’s VIN on hand to make the process easier as well.
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Get a view of the model’s market value
Establish the current market value for your car. Look at demand by searching for trends and vehicle sales data for preceding quarters. Look at supply by searching used cars for sale inventories. And you can simply ask by reaching out to a car dealership and engaging with them about what estimates they can give you for how much they’d pay for your car.
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Establish trade-in value
Once you’ve got a general idea of how much your car model is going for on the market, you can move on to narrowing down its trade-in value. Make sure that you have all your documents in order, including a full service history, previous ownership records and reports on any accident-related work. Then, approach a dealer to ask if they’d consider a trade-in for your car.
The potential buyer or dealer will consider depreciation, inflation, your vehicle’s age, its history and any other elements (including what you’re considering trading your car in for) before giving you an offer. This will be your car’s trade-in value.
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Get your car professionally appraised
Another car valuation option is to get your vehicle appraised by a professional. These people often don’t have a reason to over or under-inflate the value of your car and may charge you for coming to inspect it and assign a value. This is usually the most accurate car valuation option.
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Test your car’s value against the market
Once you’ve got the most accurate idea of your car’s value, check if it’s in line with the typical retail value of the model’s similar used cars. Look at other vehicles for sale in a similar condition and with a similar mileage. This will help you to finally land on a realistic car valuation for your vehicle. Click here for a wide range of quality used cars you can use to get an idea of the market value of yours.
Conclusion – Your car is a valuable asset
Car values are always changing. As demand shifts, new models are launched, and your car gets older, its value will adjust. Staying aware of your car’s shifting value will help you to save on insurance, pick the right moment to sell and motivate you to keep your ride in good condition by getting it serviced regularly and keeping on top of any issues that need checking.
Our extensive inventory contains quality used vehicles that have been appraised and listed at retail prices that represent their real value in a highly competitive market. Remember, your car is valuable, and when you’re ready, you can use it to cover your next ride.