Valuations
car valuation

What dictates the value of your car

You’ve probably heard a thousand times that something is worth only what somebody will pay for it, but what dictates how that figure is set? Why is one car worth £500 and another 10 or 100 times as much?

It’s down to a multitude of factors but at a simple level a car’s value is driven by the balance of supply and demand along with its original selling price. So if it was expensive to start with and very sought after, it will continue to be valuable – but if there’s little demand for it, its value will quickly drop. Conversely, if a car is cheap to start with it’s unlikely to become more valuable, so will always be worth relatively little.

For more on car depreciation and residuals check out our blog on the subject. In the meantime, these are the key things that will affect your car’s value.

Image

Arguably the thing that makes the biggest difference to your car’s value is something that’s subjective and driven at least partly by reputation. In the UK we like our premium marques whereas mass-market products aren’t so highly regarded. As a result we’re happy to pay a higher price for a car from an upmarket brand, even if the car isn’t as reliable or such good value as a cheaper alternative. Sometimes a car doesn’t have much of an image because of limited awareness through a lack of marketing – and it’s these that can make the best used buys.

Condition

If you’ve got a mainstream car to sell, one of the things that will make the biggest difference to its value is its condition. If it looks abused nobody will want to buy it – why would somebody buy a car with grubby paintwork and stained interior trim when they can find a better example elsewhere? Buyers will pay a premium for a car in immaculate condition and the same goes for one that’s covered a low mileage and comes with a full service history.

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Valuations
car valuation

Why you should get a car valuation

Five reasons why you should get a car valuation

The value of anything is driven by the balance of supply and demand, and it’s no different for cars. How well a car retains its value depends on how desirable it is and how many of them are available – so even if there’s a good supply, you can still pay plenty if there’s also a strong demand.

Just look at cars such as the BMW Mini, Audi A3 and Range Rover Evoque. There’s one on every corner, but because they’re also held in such high esteem by used car buyers, you’ll always pay plenty to buy one.

The thing is, there’s no way of knowing what your car is worth without referring to some kind of valuation service. Just because you paid £10,000 for it a year ago, it’s impossible to say what it’s worth now. Besides, if you bought it from a trader you’ll have paid top whack for it, and it’ll immediately be worth significantly less than you shelled out for it if you then sell it privately or trade it in. To understand this better, check out our blog on how depreciation works.

And here we’ve opened a can of worms, because your car doesn’t have a set value as such. Instead it has a range of values depending on whether it’s for sale at a dealer, being traded in against another car or being sold privately. It might also be going for auction – in which case that’s yet another value you can put against it.

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