If you’re currently trying to sell your car, you’ve probably asked the question “how much is my car worth?”
However, a major challenge in determining a car valuation is that value is subjective to what the buyer is willing to pay and what you’re willing to accept.
In turn, how much your willing to accept also depends on how quickly you’d like to sell your car. Do you want to wait many months and hope that someone comes along to pay you what you think the car is worth? Or would you like to sell your car as quickly as possible and move on to your next car?
With this in mind, what you really should be thinking about is how to find the balance between your listing / asking price and the length of time it takes for your car to actually sell.
In this guide, we will take an in-depth look into car valuations and breakdown the factors that influence a car’s value, the pros and cons of the various car pricing guides that are used in Australia and simple strategies that you can use when selling your car.
What Is the Market Value of My Car?
Whether your selling or trading in your used car, it is vitally important to know the value of your car. There are numerous pricing markers that you need to look out for, including wholesale prices for a trade-in, retail prices charged by dealers and finally, retail value for a private party sale.
Once you have a good understanding of your car’s value, you can set a realistic price when selling a car and can negotiate from a research-backed position when buying your next car. Being armed with this information is not only useful when buying and selling, but also comes in handy when you are applying for a loan or claiming insurance. Entering a negotiation without this critical information leaves you in a weaker position.
Sadly, most online and book valuation tools are not accurate prices but merely estimates that provide a range of values. If you set an unrealistic price for your car, it can sit on the market for months, incurring depreciation and holding costs over that time, and dropping in value as a result.
Setting an unrealistic price is a common problem, as many people tend to over-value their car when selling it. This is what behavioural psychologists have coined as the endowment effect (yep, it’s a real thing). The endowment effect simply states that “people often demand much more to give up an object than they would be willing to pay to acquire it.” We see this play out in all sorts of markets, but most notably in automotive and real estate.
What’s the lesson in all this? That it’s important to determine the real value of your car in order to set an accurate price… recall that the value is dependent not just on the attributes of the car, but also on how quickly you want to sell.
If you want to get an accurate car valuation based on a thorough analysis of current and historical market data, then use the CarChase valuation tool to receive a fair and competitive Online Offer for your car. The estimate you will see is for an immediate, same day sale. The advantage here is that you can sell your car quickly without visiting a dealership or wading through countless text messages and time wasters.
The net outcome? You get a fair market value for your car and can effortlessly move on to your new car.
What are the Most Common Factors that Determine a Car Valuation?
Make and Model
The make and model are important factors for valuing used cars. According to Cars Guide, popular brands such as Mazda and Toyota will hold their value because they are affordable, reliable and always in high demand. Specific models within each make also stand out, e.g. the Mazda 3 or the Toyota Corolla.
The Age of the Car
Age is an influential factor in the monetary worth of your car. Unless it’s a classic or vintage car, older cars will have a lower residual value.
Whilst the year of manufacture represents the real age of the car, most car buyers use mileage as a ranking mechanism. The more kilometres your car has done, the lower it is likely to sit in a prospective buyer’s preference order. On the flip side, lower miles tend to increase the buyer’s willingness to pay, having a positive impact on the perceived value.
Conservative colour choices such as silver, grey and white are usually in higher demand because most people have conservative tastes. Yellow, orange or lime green colours are harder to sell, thus, they drive car prices down.
Accident and Repair History
Was your car previously involved in an accident? How many repairs have you done over the years? Recurring problems that need continuous work lower the value of your car. Conversely, regular maintenance evidenced in your log book is a sign of a car in good health.
Special Features and Upgrades
If you invested in superior add-ons such as high-quality sound systems, body kits, gorgeous rims and extra safety equipment, your car could sell for a higher price. But avoid accessories that will affect your car’s performance, durability and safety.
Market demand is usually influenced by the location, time, weather and the popularity of the car. A good example is the rise of SUVs over the past decade; they have become more popular than regular sedans, and therefore more desirable to a broader pool of buyers.
A Breakdown of Independent Car Valuation Guides
RedBook is an independent car pricing guide for thousands of vehicles. RedBook prepares its valuations by gathering information from a range of sources. The RedBook valuation report considers details such as added factory and aftermarket options, the car’s condition and kilometres travelled.
The valuations are not the real prices and don’t dictate what a buyer will actually be willing to pay. Redbook does not put its money where its mouth is, it simply provides a broad estimate based on averages.
A RedBook Valuation Report will cost you $33 plus GST.
Powered by Glasses Guide, Mycarprice is an independent pricing authority for used cars. You can find your vehicle from an exhaustive list dating back to 1960. The result shows three prices; (1) dealer retail-franchise (2) personal buy/sell and (3) dealer trade.
A Mycarprice valuation report will cost you $24.75 plus GST.
Both RedBook and Mycarprice do not consider current market factors that impact the price of your car, such as live market demand and the cost of maintenance, repair or upgrades done to the car.
You’ll also notice that both independent guides cost a fee.
If you’re looking for a fair and competitive car valuation, use the free car valuation tool available on our website to receive an Online Offer for your car. The key advantage of the CarChase valuation is the fact that is it not simply a theoretical value. It’s how much you will receive should you wish to exercise your option to sell your car immediately, skipping the weeks of waiting around.
We do not charge you to sell your car using our platform and all offers are no obligation.
Other Factors to Consider When Valuing Your Car
Vehicle presentation and cleanliness
Don’t underestimate the value of presentation when selling your car. Get your car professionally detailed and waxed to improve its salability. A clean car looks more attractive than a dirty car. Sounds pretty simple, right?
In the modern era, an automatic tends to be slightly more valuable than a manual. Depending on the manufacturer, new car prices for manuals can be up to $2,000 cheaper. This price difference tends to extend throughout the life of the car.
Method of sale
The medium of sale is a major determinant in a car valuation. Whilst a private sale gives you the opportunity to get a higher price, it requires more effort to prepare your car for sale, find a private buyer, arrange test drives and negotiate prices. Selling through an auction or dealership may be faster but the valuation is lower.
An online service such as CarChase bridges the gap between a private sale and dealership. You receive a fair valuation for your car that is higher than a dealership and get paid within 24 hours.
It’s easier to set an accurate price for your car when you have a researched valuation. Popular tools that serve as a benchmark include RedBook and Mycarprice but the figures are estimates, not the real car value that a ready buyer is willing to pay you. If your goal is to sell your car effortlessly and quickly, give CarChase a go to receive an Online Offer today.