There are loads of reasons why car valuations are important. You might simply be wondering: how much is my car worth? But you might also be concerned about getting a fair deal – which applies whether you’re buying or selling. Or you might need to know the car’s value for insurance purposes.
It’s particularly important to use a reliable and accurate source of car valuations right now, as used car prices have been all over the place the last couple of years.
Why is used car pricing so critical right now?
A remarkable series of exceptional events have combined to cause, if not chaos, then certainly unusual trends in the used car market, which has significantly impacted prices.
These include the covid pandemic, which not only halted or reduced the production of new cars for a period but has also resulted in ongoing supply chain issues, which continue to disrupt new-car production. And then there’s the war in Ukraine, which has caused further issues along similar lines. Both of these issues have also had a dramatic impact on inflation.
The net result is that demand for good used cars rose sharply while brand-new cars were less easy to buy. This has driven up prices, and although that trend is slowing down, you will still find that older cars are worth much more than they used to be.
This makes getting an accurate valuation more important than ever.
Why is a car valuation important when buying a car?
Buying or selling car valuations is important to ensure you get a good deal.
When buying, you want to ensure you’re not paying too much – which, for the above reasons, can be difficult to judge right now.
Car traders are obviously in the business of making money, so they are likely to make a big fuss about the number of miles the car has covered, the options it has fitted, and whether it is a rare model in an unusual color. The best valuation services will consider all of this – which is perhaps particularly vital for the last two points.
After all, sometimes a car is rare because it’s not desirable, and not many were sold in the first place – this doesn’t automatically make it worth more money. Similarly, an unusual paint choice is often the same as an unpopular one, which may make the car more difficult to sell later (and therefore often worth less).
Why is a car valuation important when selling a car?
As with buying a car, it’s important to know the value when selling to ensure the price is right. This isn’t just about getting a fair deal but also making sure you can sell your car in a timely fashion – over-price the vehicle, and you may be stuck with it for much longer than necessary. Under-price it, and you are doing yourself out of some money.
A good, used car valuation will also guide you on the different prices you can expect depending on how you plan to sell. For example, the trade-in price against a new car will be lower than selling privately.
And just as a main dealer will likely charge more for a car than a typical second-hand garage – the amount you get in trade from a franchised dealer versus a regular garage will also vary.
Why is a car valuation important for insurance?
When you insure a car, it’s important to make sure you value it correctly, just in case the worst should happen. Undervalue it, for instance, and you may find the cover isn’t adequate to allow you to buy a direct replacement.
Some insurance companies do ‘agreed valuations’ to avoid this sort of thing, but for that to work in your favor, you must again accurately know what the car is worth when you insure it.
When else might an accurate car valuation be important?
The value of a car is also important when a finance deal nears its end.
With a PCP deal, for instance, you may find that the optional balloon payment is so much lower than the car’s second-hand value that you could pay the balloon and then sell the car on the open market for a tidy profit.
Or you may find that the optional final payment is far higher than an equivalent used car, which would again allow you to make a decision that saves you money.
Featured Photo by Antoni Shkraba: https://www.pexels.com/
