What Is Vehicle Valuation? – Determining your Car's True Market ValuePublished Monday, March 27, 2023
When you plan to buy or sell a vehicle or want to get insurance for its true value, you need a vehicle valuation.
You can get a car valuation for depreciation calculations, get finance, find the right insurance policy, and for estate management purposes.
However, you may still have some questions about it. What is car valuation? Is it essential to know your car's actual value? Read on to find the answers!
What Is a Car Valuation?
Also known as vehicle valuation, it takes a look at a particular car to determine its true market value. In order to do that, this process considers different factors, including the car's age, model, make, and service history.
During a car valuation, any modifications, its current condition, and recent sales values of similar models may also be considered.
When Is a Vehicle Valuation Necessary?
A car valuation is common when you're selling or buying a car. It allows all parties involved to know if they're paying or receiving a fair amount for the vehicle.
In addition, this process is also essential to get insurance. Actually, car owners can rely on vehicle valuation to know their vehicle's value and get fair and comprehensive insurance policies.
Let's learn more about these options:
Is Car Valuation Mandatory When Buying a Car?
If you plan to buy a vehicle, getting a car valuation can help you know if it's available for a fair price and make sure it reflects the current market value.
It's the best option for those who want to buy cars that are not easily checked, such as vintage or classic vehicles, or when establishing a true market value is difficult.
When you get a car valuation, you know that the car is worth exactly the price you're paying and is what the seller says it is. Classic car owners use it to prove that their vehicles are not replicas or have not been modified, for example.
In other words, a car valuation can help you make the right decision if you want to buy a car and determine if the seller's asking price truly reflects the market value.
Is Car Valuation Necessary When Selling a Car?
If you're the seller, a car valuation can help you too! It's the best way to get a second opinion on the price of your vehicle, as it will reveal exactly how much it is worth.
Sometimes, your car is worth more than you might think. That's when a vehicle valuation comes in handy! In addition, it can help you know what you have and can be a bargaining chip with potential buyers.
With a car valuation, you can find out the actual value of your car and back it up to get the amount you deserve for it.
Why Do You Need Car Valuation for Insurance?
When taking out a new insurance policy for your car, this valuation is also essential. Most insurance companies have pre-set car prices that don't always reflect the true market value.
However, if you get a proper car valuation done, you can make sure that you insure your vehicle for its actual market value and get comprehensive insurance coverage in case it's damaged, stolen, or written off.
Do You Need Valuation If You Plan To Sell Or Buy a Used Car?
Whether you plan to buy or sell a used car, a valuation can help you determine its real value to set or pay a fair price.
Many rely on a car valuation to get the best offer when they want to buy or sell used cars, as this process determines a vehicle's worth based on its age and conditions.
If you want to buy a new car, a valuation can also help you know if the dealer's asking price reflects the market value and if you are not paying more than the vehicle is actually worth.
In other words, valuations come in handy whether you buy a new car privately or through a dealer and when you invest your money in a reliable used vehicle.
Moreover, it can help you set a fair price for your used car and back it up if you want to sell it.
How Much Is a Car Worth? Factors Considered to Determine a Vehicle's Value
Whether you plan to buy/sell a new or used car or want to determine your vehicle's value to get a fair insurance policy, these are the factors that a valuation considers.
Vehicles tend to depreciate in value over time. As your car ages, its value goes down. Only rare or highly sought-after cars can buck this trend if the market changes.
However, most new cars typically lose at least 22% of their value in the first year. Therefore, even if it's second-hand, a vehicle may sell for more than an older one if both have the same mileage and condition.
Car Make and Model
Vehicles manufactured by popular, well-known, and reputable brands tend to cost more since the demand for them is higher.
However, cars made by the same brands can have different prices depending on their features, styles, and attributes. Therefore, the car's model is another key aspect considered during a valuation.
When it comes to buying or selling a used car, its mileage is also a key factor in determining its value. A vehicle with fewer kilometres travelled will likely cost more.
An increase in kilometres is usually related to excessive wear and tear. Therefore, if your vehicle has travelled fewer kilometres than the average for its age, its value will be higher.
During a car valuation, its interior, exterior, and mechanical condition are also evaluated. Overall, it can impact a vehicle's value, especially if there is paint or structure damage.
This process also considers different car parts, such as electronics, tires, lights, and upholstery. If they're functional, the value is higher.
Vehicle History and Registration
Written-off vehicles often have a lower value than others. The same is true for cars with serious panel repairs.
However, models with a clean history can sell for a higher price. Buyers often pay more for vehicles that have never been in an accident and have a well-documented service history.
Whether you plan to sell or purchase a car, a valuation can help you determine its value and pay or set a fair price for it.
Contact Westside Auto Today!
Do you need help to know your car's value, sell it, or buy a used vehicle? Westside Auto can lend you a hand. Call us today!