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How much is my Car Worth?

How much is my Car Worth?

29 April 2018 Concept Car

“How much is my car worth?”

Not only is this one of the most widely asked questions on the car market. It is also one of its great unsolved mysteries. We now have access to huge amounts of data and can run it it through powerful algorithms. And yet, it is still impossible to determine a universal price for a used car.

No wonder, then, that drivers are still incessantly debating about it. Just take a short look at any auto forum on the web (this one, for example).

It is easy to understand why people are obsessed with this. How much you get for your last car ultimately determines what car you can afford next. Often, the difference between a good and a bad deal isn’t just a few quid – but can run into thousands of Pounds!

What are we talking about if we talk about value?

This may sound like a bit of a strange question. But the answer is not as straightforward as it may seem. After all, if you’re wondering how much your car is worth, you usually tend to think of the retail price. That, however, is only one part of the equation.

In the next section, we’ll show you all the different prices you can get for the very same vehicle. These are not theoretical, they really exist for real out there on the market. You should definitely know about these. Why? Because there can be up to £2,000 between the highest of these prices and the lowest. That’s a lot of money!

When it comes to car value, there is also something called a ‘valuation’.

Now, although some people take this to be identical to the price of a car, the two are actually entirely different:

  • A car valuation is the calculated/statistical value of your car. It can be based either on actual real world prices or merely on the asking prices of said car. It can give you an indication of what your car is worth. But there’s no guarantee whatsoever you will actually sell your car at this price.
  • The actual price of your car is what you’re selling your car for to a dealer or private buyer. It can both be higher or lower than the car valuation, although the former is somewhat unlikely.

Let’s now take a look at all the different types of prices you can achieve out there.

You can never get a price guarantee

This is because there is no such thing as a single, universal car buying situation. In fact, there are five distinct scenarios. (Plus a more theoretical sixth one) And all of them play out in an entirely different way:

Private Party Sales:

You sell your car directly to another driver. Payment may sometimes be in cash. There is no middle man and there are usually far less formalities. Because there are no transaction costs, the price you can fetch will usually be high.

Trade-in Value:

When you’re selling your vehicle to a car dealer, you will mostly likely get a far lower price than at a private party sale. The reason is simple: The dealer still needs to make a profit himself. So he will try to keep his costs down as much as possible.

Typically, your car be will worth least in this scenario.

Suggested Retail Value:

Once the dealer has bought your car, she will clean it up and perform a check-up. This considerably raises the value of the car.

Still, the Suggested Retail Value at dealers can vary considerably across the country, However, within the same city and region, it tends to be pretty stable. However, you can obviously still haggle and get a better price.

So even the Suggested Retail Value will never satisfyingly answer the question of how much your car is worth.

Certified Pre-Owned:

One of the most customer friendly innovation on the car market are CPOs. Cars that are part of this program feel almost as good as new and come with all sorts of benefits. They are great second hand value and can fetch fairly high, yet still fair prices.

Online Sales Price:


Although most people still prefer to purchase major items such as a car in person, online platforms are gaining in popularity. They are similar to private party sales, as the only middleman is the sales website (such as ebay).

Since it is easy to compare prices, competition is high, driving prices down. On the other hand, since information is easily accessible, there is very little chance of an amazing deal just because the dealer wasn’t well informed.

Even if you don’t intend to buy your car online, it can be a good idea to use online car auction sites prior to a visit to the dealer. This will give you at least a bit of perspective on what the car you’re interested in can realistically fetch.

Scrap price

The final option is to scrap your car. In this case, you sell it to a scrap dealer – or to a middle man who then in turn sell it to a scrap dealer.

If we rarely think of this option, there’s a simple reason for that: Scrapping your car is going to give you by far the worst price. There have even been reported cases, where owners had to pay to have their vehicle scrapped!

Just to give you an idea: If you own a car that would fetch you somewhere between £705 and £1200, the scrap price could be as low as £150. That’s a price difference of a whopping £600 at least.

So why even mention it here? Because you may sometimes have no other choice. If your car is badly damaged and it has become worthless to dealers or private buyers, you will still need to take it off the street. A scrap dealer can help you with that. So it’s helpful to at least be aware of the possibility.

Factors that influence the price

Obviously, where and how you sell your car isn’t the only factor deciding how much your car is worth. Even the long list we’ve compiled for you below isn’t even remotely complete.

But at least it will give you a better picture of what to look for, regardless of whether you’re selling or buying.

Initial price

The initial price of a used car is the basis for all further calculations. It gives you a rough indication of what league the car is in and the technology hidden underneath the hood.

Age / Depreciation

The older a car, the less it will fetch. It seems like a simple equation and is usually pretty reliable. Almost every car loses at least 20% of its value within its first year (see our car depreciation guide). There have been exceptions, however. If a car is particularly desirable and if there’s a waiting list for new models, sometimes a used model can actually be more expensive than a brand new one.

Also, many cars no longer depreciate once they’re about eigth years old.

Make

This goes hand in hand with depreciation. Some makes simply lose less value than others. This is hardly ever a rational factor. All experts agree, for example, that Vauxhalls offer excellent reliability. And yet, they lose their value pretty quickly.

If you want your car to be still be worth a decent price after a few years, you should therefore focus on brands that depreciate less. German cars are usually top of the league here.

Mileage

Mileage is a more exact indicator of a car’s condition than age. Obviously, a car that’s driven 100,000 miles in six years will be different from one that’s mostly sat in the garage for the same amount of time. This is why more mileage usually means a lower price.

Mileage can obviously only be one piece of the car value puzzle. After all, how you drive your car is more important than how much you’re driving it. Generally speaking, however, mileage is possibly the single most important cost factor next to depreciation.

Car Category

Car types hardly ever get mentioned when asking the question: How much is my car worth? Clearly, this is a mistake.

The last few years have seen drastic swings in popularity of different car types. SUVs have gained in popularity, for example, as have city cars. Others have lost in importance, comparatively. These changes are reflected in car prices for used cars as well.

CO2 Emissions / Fuel Efficiency / Diesel

At least in the UK and most of Europe, fuel efficiency has obviously always been an important factor determining the value of a used car. Since the introduction of CO2 bonuses in some of the major cities, this aspect has become even more vital. Depending on the model, you can save up to a few thousand Pounds by keeping your emissions down. This has sent the price of cars with great fuel efficiency through the roof.

On the other hand, diesels have become very hard to sell. With a potential ban on diesel cars still looming large, this is unlikely to change very soon.

Extras

You’d assume that more extras automatically increase a car’s value. This isn’t the case, however. Especially when it comes to gadgets that affect the looks of the car and can not be easily removed, the exact opposite may be true.

There are, however, decidedly a few accessories that will typically do well with potential buyers. Lifehacker mentions

  • a sound system,
  • sun roofs,
  • convertible tops,
  • leather seats or
  • a high class air conditioning.

All of these are strong selling points. As Lifehacker points out, though:

“Upgrading the CD player to a touchscreen XM radio won’t undo the fact that you drove your car 20k miles every year.”

Regional differences


The Internet may have made prices more comparable across the board. With cars, however, this plays less of a role than for others. Your dream car may be cheaper in the USA, for example. But that probably won’t mean it makes sense to have it shipped to you from there.

Within the UK, however, price differences can be big enough to warrant just that. According to a recent survey, the gap between the cheapest place to buy a particular model and the most expensive one amounted to five thousand Pounds – this can certainly make a little trip worth your while.

Condition

We’ve saved the best for last. It goes without saying that the condition of your car is vitally important for deciding how much it is still worth. This affects all parts of the vehicle: From the engine to the seats, from the paint to the breaks, from the smell inside to the way it drives.

Autograding can assist with the process of determining a car’s condition. This is a system that classifies used cars into one of six categories. It was developed by British Car Auctions, but can also be helpful for private party sales or dealers.

What do these grades look like?

Grade 1 cars “may have minor interior and exterior defects that require SMART repairs”. Grade 2 describes vehicles which may additionally “require up to 1 major or minor body shop repair.” The sixth category, meanwhile, is called “unclassified” and reserved for the following situations:

  • Substantial Accident damage
  • Major Parts Missing
  • Recorded items that exceed the criteria of Grade 5
  • Multiple unrecorded items

Autograding is useful, since it standardises the grading process. However, it can never replace actually seeing the car for yourself. If you can test drive the car and take a knowledgeable friend with you, all the better.

How much is your car worth? Find out yourself!

As we’ve mentioned at the beginning, there are vast amounts of data on car prices available online. Almost every single dealership now includes a digital showroom on their website. Not all of them are equally well maintained, not all of them are up to date. They do, however, provide you with an excellent indication of what to expect.

A website like Parker’s is also highly useful. Their team literally travels across the country, visiting dealers and recording private party sales to calculate average prices for a specific model. The information on their website is priceless and is an excellent point of departure.

Obviously, you can also go down the traditional route of browsing through the classified ads and see what particular cars are fetching. Or pay ebay a visit and check out the closed auctions.

Whatever you do, however, don’t ever settle for less than you deserve. There will always be people trying to answer the question “how much is my car worth?” for you. In the end, however, you’re the one who gets to decide whom to sell it for at which price.

How to get ideas about the value

If you’re serious about selling your car, you should start thinking about how much your car is worth. But how to do that? One thing’s for sure: Don’t try to be creative and come up with a number yourself. You’re probably the worst judge of your car’s actual value. So don’t even try.

The reason you can not be objective about how much your vehicle is worth is not just that you have grown fond of that good old banger. It is also that your perspective is fundamentally different from that of, say, a dealer.

A dealer still has to sell the car on to a customer. They have overheads and they will also check the car and bring it up to speed again. In some cases, this may involve extensive (and expensive) repairs. All of this means that the price they’ll sell a car for (the retail price) will be higher than a private sale. And what they’ll offer you for the car will be significantly lower than that.

So, you’ll need to look for other options to find out what your car is worth. Here are a few ideas to get you started.

What your car is worth: Dealer estimates

This one seems quite obvious. Why not just drive up to a few local dealerships and ask them for an offer? It’s free, it usually won’t cost you a lot of time and you can already scout the market for interesting second hand cars to buy. Still, very few people actually make use of the possibility.

We get it: To some, a visit to a dealer sounds like as much fun as a visit to the dentist. You’ll probably need to revise that impression, though. Car dealerships have had to adapt, mostly because of the stiff competition from online platforms. And so, they have become more professional and service-oriented. Today, you can expect to get a first class experience even from most buy here pay here joints.

If you’re interested in a free car valuation, we’re always happy to hear from you. Just visit out Manchester showroom and we’ll gladly take a look at your current car. And while you’re at it, you can check out at all the great second hand models waiting here for you.

Autotrader & WeBuyAnyCar

These two major websites are often bunched together. But they’re not quite the same thing.

Autotrader is an online platform where private sellers, dealers and buyers meet. You can put up an ad for your car here if you want to sell it. Or you can search the database for current offerings if you’re looking for a new car. Autotrader doesn’t actually stock any cars themselves, they just mediate and take a small cut of the profit.

WeBuyAnyCar doesn’t sell any cars, it only buys them. Or, more precisely, it mediates between private sellers and dealerships. Rather than driving up to all those dealers as we described in the previous paragraph, you can now enter your car’s data and get a wide range of offers from the comfort of your home.

If you like to haggle, the price you will get from a site like WeBuyAnyCar is going to be potentially lower than a regular dealer offer. If you’re not keen to haggle, meanwhile, this concept makes it a lot easier and faster to sell your car. Depending on your preferences, you may be happy to forgo a bit of profit for that convenience.

Ebay, Gumtree, Shpock

It is well known that eBay is one of the biggest sellers of cars. That is quite amazing, if you think about it. In the beginning, eBay mainly worked for smaller items with lower values. Now, some of the products on sale there can fetch millions.

Ebay is a great place to find out about car values. It is very lively, meaning that you can get current information here. It is also huge, which means you should be able to find exactly the car you’re looking for. Most importantly, the prices on eBay can both be private sales prices as well as dealership prices. This allows you to get a very detailed impression of the full price range for any given model.

Competitors like Gumtree and Shpock complement this offering. They’re not necessarily better than eBay. Rather, they offer subtle spins on the concept. If you want to be really thorough, include them in your car price analysis, too.

Parkers, Glass, CAP

And then, there are car valuation sites like Parkers and guides like Glass. These are obviously very useful as well.

It would be wrong to think of car valuation as worthless. Quite on the contrary, it is a highly useful tool to assist you in finding out the value of your car.

A car valuation by Parkers is essentially a summary of all the different prices for a given model on the market. Let’s say you have a 2015 Polo and want to sell it. Drive it to the nearest dealer and you get one potential price. By looking at eBay, you can significantly expand your basis of research.

But you could never ever get the same insights as a car valuation company. Parkers spends countless hours talking to dealers and analysing their offerings to find out about current car prices. Their valuations are an average of thousands of prices from around the UK. They are not an expression of what you can expect to buy or sell a car for, but of the prices that dealers ask prior to the negotiation process.

On the downside, this means that you will probably never get the exact price quoted by Parkers. In fact, you may sometimes get a whole lot less. But on the upside, it also means that you can get a great picture of the overall price level for your car.

Combine this with the more hands-on prices to be found on eBay or Autotrader, and you get a pretty good reply to that question: How much is my car worth?

Depreciation: A question of the right model

Obviously, the more expensive a car is at the moment of purchase, the higher will be its residual value after a given time. Clearly, there are cars that depreciate better than others. Car valuation company CAP has compiled a list of those cars which depreciate least within each category:

  1. City car – Peugeot 108 – 49%
  2. Supermini – Audi A1 – 52%
  3. Lower medium – Toyota Prius – 55%
  4. Upper medium – Mercedes-Benz C-Class Coupe – 54%
  5. Executive – Jaguar XF – 53%

Okay, so these are probably not the kind of cars you’d usually buy.

Instead, here’s the same list from a more mainstream perspective. We arrived at this after filtering out the most expensive entries:

  1. Peugeot 3008
  2. Volkswagen Caravelle diesel
  3. Toyota CH-R hybrid
  4. Kia Niro
  5. Volkswagen Tiguan
  6. Subaru Impreza
  7. Seat Ateca
  8. Toyota C-HR petrol

Any of these is going to sell a lot better on the second hand market than its immediate competitors. If you’re buying, meanwhile, and want to keep costs low, you may conversely want to steer clear of them.

When

Now, this is a completely logical factor. But it is all too often forgotten: When you buy and sell your car is as important as all of the other aspects.

For one, the holiday season is the time when most people prefer to buy. It seems to make sense: You want to take a long trip, you would like to do it in a new vehicle. And generally, you feel like spending more in the Summer, compared to the dark and depressing Winter months.

And since most people part-trade their old car for a new one, this means that most cars are sold in the Summer as well.

So this naturally means that it’s the worst time to buy or sell if you want to achieve the best prices. Instead, hold off a little and wait for the end of the year. Not only can you get better prices due a more favourable supply and demand situation. Dealers will also want to move their unsold inventory. So you can get a lot better prices for many models.

An imperfect science

We started out this article with a question: What is my car worth? We’ll end it with a somewhat sobering conclusion: It depends. More significantly, you won’t ever be able to get a fully convincing answer to that question.

Here’s why: Car valuation is not a science. Or if it is, it’s a very imprecise and imperfect one. Why some models do so much better than others at any given moment is hard, if not impossible to answer. More often than not, taste plays a bigger role than technical specs and objective quality. That may be disappointing. But it’s always been like that.

You can’t make these logical breaks go away. What you can do is to learn and use them to your advantage. Sometimes, all it takes to get a better price is to wait a little until your model comes back in style. If you play it clever, you won’t just get what your car is worth – but even a little more than that.

29 April 2018 Concept Car