The first step in selling or buying a used car is finding out its value. Once you know the value of a car, you have the leverage required to bargain or set parameters on how much you are willing to buy or sell for. To obtain a valuation, car owners often utilise a valuation company such as Glass to find the most up to date prices and figures for their car. In the past, this meant obtaining a printed guide. These days, all this information is generated off the internet and updated in real-time.
Of course, when receiving a valuation, often times all you are getting is a number, one that may vary depending on who does the valuation. This can be confusing when trying to make a decision, such as whether to make modifications or fix damages to your car before selling. As a result, often times it is just as important to know how valuations are calculated as opposed to the number itself.
What Factors Affect the Value of My Car?
When it comes to making an estimate, there are factors that are outside of your control and those that are based on how well you have taken care of your vehicle. The price of your car can also change depending on whether you are making a private sale, selling to a dealership, or trading the car in. Market forces such as supply and demand can also sway the price of your car, as well as current trends. For instance, in recent years, environmental factors have lowered the value of larger, gas guzzling vans in favor of smaller, more fuel efficient cars.
Ultimately, the heaviest indicator of how much a car is worth is what people are willing to pay for it. When calculating a free valuation, most sites will pull figures from a database of previous sales made to dealers for cars with the same make, year and model.
Free Versus Premium Valuations
Most companies will offer two types of car valuations. The free version is essentially one that uses historical data based on the type of car you are selling. It is a general barometer of the market, and may not take into account the unique factors that make your car a more valuable commodity. Premium valuations, on the other hand, will consider the following attributes:
- Mileage as opposed to year - If you drive your car less frequently, the mileage may indicate the car has more value.
- Colour - One of the more underrated attributes in private sales.
- Interior Modifications - Stereo systems, GPS navigation devices, and other upgrades.
- Exterior Modifications - Tinted windows, new rims, body kits, exhaust.
- Damage and Maintenance History - Showing the car has been well taken care of will make it more attractive to buyers.
Using valuation data can help you make decisions on whether to make repairs or alterations to your car. For instance, if the cost of fixing a dent is more than the increase in value, then it makes more sense to leave the car alone. Using the valuation tool can also show you how colour can affect value, and how the market is affecting certain vehicle types.
How Are Car Valuations Calculated?
Ultimately, each valuation company will weigh these factors differently. However, the most important data is the information provided by dealerships. Knowing how much people are paying for the car gives them a base point to make an estimate. From there, the factors listed above are weighted and added to the final valuation. As a seller or consumer, the critical thing to know is how these factors relate to your vehicle, and whether minor modifications will help increase the value or likelihood of a sale.