Car Valuations: How do They Work and What do You Need to Know
Buying or selling a used car can represent a very real financial investment. This can be a particularly tricky process if you are not entirely certain of its inherent value. After all, you never want to ask for less than the vehicle is worth when selling and obviously, you will need to pay a fair market value when buying. This is when a process known as a car valuation can come in very handy. Let-s take a closer look at this concept as well as some of the variables which will be taken into account.
A Look at the Real Value Versus the Production Value
Age will be an important consideration when determining the value of your car. You will need to pay close attention to what is known as the depreciation of the vehicle. Host United Kingdom companies agree that a car will lose up to 60 per cent of its value after the first three years. Of course, this is a general statement and some vehicles will fare better than others. For example, high-end brands such as a Mercedes-Benz or an Aston martin may only lose ten per cent of their initial price. This will ultimately be determined by a handful of other variables, which brings us to our next main point.
Mileage is the second main issue to deal with. It should be apparent that vehicles with higher mileage (particularly over 100,000 miles) will lose a significant portion of their initial value. This can be as high as 20 per cent. The reason for this is quite simple. Cars that have been driven for longer distances will tend to exhibit more mechanical issues.
Another variable to consider is the physical condition of the car. Worn interiors, headlamps which are not functioning properly, a damaged body and a corroded undercarriage are all factors that need to be addressed when buying or selling a vehicle. Repairing these defects can cost well into the thousands of pounds and they might not be worth it in the long run.
The next concern involves how the car in question handles. This is normally determined by a test drive. There are several conditions to monitor. These include:
How the car handles turns and tight corners.
Shifting between gears (both manual and automatic)`
Any noticeable noises within the engine
Never forget that there is much more than meets the eye in terms of a car valuation. While a vehicle may appear pristine on the outside, its engine could require a major overhaul such as a head gasket replacement. This is why appreciating the internal mechanisms is so very important.
Where to Get an Initial Idea of the Value
One of the best places to begin is by either purchasing the official Blue Book or by accessing it online. You can quickly look up the make, model and year of any vehicle. This guide will then tell you the approximate value based off of its condition. There are other websites as well which can come in handy. Forums are excellent resources as well, as you will often find collectors and other experts who are more than happy to lend a hand.
Things to Take Into Account After a Valuation
Let-s assume for a moment that you have completed the valuation. The next logical step before any type of transaction is to examine the MOT history of the vehicle as well as if any accidents occurred in the past. These can lead to future financial headaches which should be avoided. Sellers and buyers should always be straightforward with one another from the very beginning. There is also normally a grace period immediately after a transaction has taken place. This accounts for any hidden surprises that may impact the commitment of the seller or the buyer.
Car valuations are not necessarily complicated and yet, a good amount of research is nonetheless necessary. If you still have doubts, it is wise to speak to a mechanic or even to contact the manufacturer in question in order to learn more about your options as well as to determine whether or not the valuation is correct.