A new car starts depreciating in value the moment you drive it out of the dealership after purchase.
On average, cars in Australia drop in value by 15% each year in their first three years. This is a substantial decrease considering that a car worth $25,000 will have a selling value of around $14,500 after only a handful years. With the price of used cars varying, it is important that you know how much your car is worth when you are looking to sell your car, so you can be confident that you are getting a good deal.
There are many approaches to getting a used car valuation and it can be tricky for you to understand what a fair price is in current market conditions. It also depends on how fast you are looking to sell a car and the method you choose to sell, whether you go for a trade-in, auction, a private sale or a seamless solution offered by CarChase.
It’s important for you to understand the key variables that impact car valuations as it can help in your decision making process, both when buying a new car and selling a used car.
What are the major factors that impact a used car valuation?
- Car age: Age is perhaps the biggest factor in deciding the price of a second-hand car. As mentioned above, new cars in Australia lose their value fairly quickly in the initial years of usage. Unless your car is a prized vintage, you will realize that the relation between the car price and its age are inversely proportional.
- Car model & make (popularity): Not all cars come with the same quality of built and prestige. This is why different models from different brands have different values. Better made cars are generally more popular. Commonly driven cars, from reputed brands, in Australia tend to have a higher demand in the used car market and, hence, fetch favourable prices.
- Car mileage: Cars driven in Australia stack, on average, 14,000-15,000 kms in mileage, each year. The more miles your car has been driven, the lower its market value will get generally. Cars with higher mileage on the odometer tend to be exposed to greater wear and tear, and are more likely to require a greater focus on maintenance and repairs. Mileage is also a key ranking factor for prospective used car buyers – the general rule of thumb being that a car with lower miles is viewed more favourably by buyers.
- Car service history (logbook record): By keeping and maintaining your car service logbook, your car’s value will gain a boost. The logbook shows all the fixes and updates your car has gone through, which allows the buyer to have confidence in what he or she is getting.
- Body type of car: Recent years have seen a huge increase in the demand for Utes and SUV in Australia. Utes in particular hold their value in today’s market much more given they are mostly used for commercial purposes. SUV’s, on the other hand, are increasingly popular with families and have the perception of being safer than hatchbacks and sedans, so this helps them retain their value for longer.
- Car damage history (any accidents): By providing a damage history report for your car, you will again help it gain a favourable valuation and attract more prospective buyers. A damage history report is evidence proving that the car has never been involved in an accident and, hence, is not having any major repairs.
- Car colour (some cars may have limited edition colours): Popular colours usually garner more attention from potential buyers and therefore are easier to sell. Some cars may come in limited edition colours, which can be difficult to sell; however, these cars usually find a higher than usual price when successfully sold.
- Car exterior features (body, paint, body kit upgrades etc): The external modifications made to your car will affect the valuation of your vehicle. Examples of such modifications include new paint, body kit upgrade, tail wings, etc. Similarly, any dent, rust or scratches on the body of the car will lower the car’s market price.
- Car internal features (Condition of the interior, sound system upgrades, leather seats, reverse camera and any other upgrades): Interior condition and features of your car can lead to an increase or decrease in your car’s value. Things like a dirty dashboard, scratched seats, blown out speakers, etc. will decrease the price your car can fetch. On the other hand, installing unique features like GPS, parking camera, upgraded sound system, etc. will give a boost to your car’s value.
If you are thinking about selling your car, then a car valuation is a critical step in the process.
Get in touch with CarChase if you are interested in understanding how much your car is worth in today’s market. Our data-driven approach to pricing forms the basis of our Online Offer, which is the exact amount that you will receive when choosing to sell your car with CarChase.