What Is Your Car Worth?

Assessing the value of a car becomes important when one is either trying to sell the car or getting it insured. In both cases, the car’s worth is determined by specific factors that reflect the state and health of the vehicle. Car valuations are best done by credible auto dealers, who often assist with the sale. However, getting to know what factors influence the sale price or insurance premiums will help car owners maximise their benefits.

Resale

The selling price of a car depends on certain factors that are globally standard, including but not limited to:

• Model / Age

The car model and its age often go against the value, for older cars tend to bear the bruises of wear and tear. As a result, they don’t often justify a high sale price, unless they are vintage models maintained in impeccable shape.

• Mileage

Sparingly used cars command a higher sale price when compared to those which have clocked several miles of usage. Both age and mileage are two key determinants of resale value.

• Brand

The popularity of a particular brand always determines the demand and, hence, the sale price too. However, if at a given point in time, there is a surplus of second-hand cards from a given brand, this factor may not be a value-add.

• Form and Function

The look and feel of the car also scores high while determining its value. Cars that have been under regular maintenance and drive well can get a decent price. Interiors too need to be clean and comfortable.

In addition to the above factors, there are yet a few other things such as location and demography that indirectly impact the demand for second-hand cars and their prices. People living in a given location, their preferences and affordability drive local demand.

Insurance

Estimating the worth of a car for insurance purposes is also based on the same lines, taking into account the model of the car, and conditions and safety features. While insurance premiums depend on these factors, claims are usually paid out either on the cash value or replacement value of the car.

It is important to buy a car that has a track record for low depreciation rates so that even if one settles for a cash value payout, there is not much loss.

Debunking Value Myths

Contrary to popular belief, all upgrades and pricey customisations do not add much intrinsic value.

Choosing an offbeat colour cannot be considered a value addition, and could prove expensive to re-paint if one plans to sell the car. Navigation systems, stereo and entertainment features are a matter of personal preferences and may not count unless one finds the right buyer. Most tech upgrades are quick to get outdated and are not likely to retain their value in future.

Online Valuations

Several auto dealers offer non-obligatory online valuations that offer a rough estimate, based on the registration number of the car. Details such as the model and age of the car – which are needed for evaluation – are gleaned using the registration number. These valuations, however, do not factor in the physical condition or valuable upgrades in the car.

Shopping around for a reputed auto dealer and getting the car valued by professionals will help ascertain the right sale price for your car.