“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!
As great as it would be to fully resolve this problem, though, you have to understand one thing:
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. 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.
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.
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.
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.
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.
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 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 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.
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.”
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.
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 with the best information on the subject – and it is ultimately you who gets to decide whom to sell it for at which price.