When it comes to buying a new car, the first thing to think about is what you’re going to do with your old one. Used car values are higher than they have been in a long time and now is a great time to sell or trade in your old vehicle.
While that’s an interesting conversation in itself, understanding your car’s current value, the factors that affect it and what you can do to keep it at its highest is important regardless of what’s going on in the wider market. You can check your car’s worth right now with our free valuation calculator. But what’s behind that figure?
What are the main factors that affect car value?
Even in a pandemic-stricken year, used car sales in the UK totalled over 6.75m units in 2020. With such a high quantity of transactions going through year-on-year, tracking companies can take this data and paint an accurate picture of car values in the market, as well as the most important elements that affect them.
A car’s worth is built on a number of things, good and bad. Here are the key ones to consider.
· Age: The fundamental factor behind depreciation of your car’s value and usually a fair indicator as to the car’s likely condition, features and desirability. By and large, the older your car is, the less it is worth – with the obvious exception being vehicles with classic appeal.
· Mileage: The more miles on the clock, the less valuable your car will be. With the 12,000-15,000-mile mark being considered the annual average for cars, anything above is considered “high mileage” while anything below is “low mileage”.
· Condition: Mileage is often considered an indicator of the condition of your vehicle, as the more miles it’s done, the higher the wear and tear on the vehicle will probably be. The actual assessment of the condition is a little more opinion-based – for example, a vehicle in great mechanical health might suffer due to a few scratches on the paintwork, while a vehicle with more underlying issues might be overvalued because of good aesthetic condition. General speaking, more diligent valuations will get to the bottom of a vehicle’s true condition.
· Options and add-ons: The more features and optional extras on your vehicle, the better – usually. Options on a car can be quite hit or miss, but there are some distinctive features that tend to aid value like high-quality upholstery and good entertainment systems. Additionally, the absence of fundamental features like air-con and power windows will work against a car’s price, while basic colours sell better than more out-there ones. Another thing to bear in mind is personalisation such as car mods. Often, these more niche touches will negatively impact a car’s value rather than help it.
· Brand reputation: Just as in the new car market, some brands and models are more popular than others. This extends into the used car market, where popular cars that carry with them a good reputation and more prestige will hold their value better.
· Location: This isn’t as much of a factor in the UK, but where you are based may impact the desirability of your vehicle when selling locally. An all-terrain vehicle may do better in an agriculturally focused area, for example, while a city car might sell quicker in urban areas.
· Market conditions: The market will dictate your value to some degree. Right now, all used car values are higher because of the effects of the pandemic. At an individual level, you might find better deals on trade-ins with your dealer at certain points on the calendar – say at the end of the month or quarter when they’re thinking about targets.
Don’t discount depreciation
One thing new or nearly-new car buyers always need to be aware of is the significant effect depreciation has on new cars – particularly in their first three years of ownership. If you buy a new car, it will lose around 15-35% of its value. Once you hit the three-year mark, usually around 50% will be lost from the price you paid, with a further but more gradual decline in value as time goes on.
If you do buy a new car, bear in mind depreciation factors when considering selling down the line.
How can you enhance your car’s value?
The question of “how much is my car worth?” is often one you can influence yourself by looking after your car correctly. Of course, every car model has a roughly set value, but there are ways to enhance your car’s value when it comes to sale or trade-in time:
· Think ahead: With the average length of car ownership sitting at around the four-year mark, it makes sense to think ahead to a future sale when buying. This might impact the type of car you go for, as in the brand or the model, or its age and condition – and it’s also a factor to bear in mind through your ownership period as you take care of the vehicle.
· Keep it clean: First impressions count in a sale, and the better your car looks to a private buyer or dealer, the easier it will be to get a better offer. In many cases, cleaning is almost a necessity for buyers to do a reasonable and fair evaluation of the condition of your vehicle, while keeping it clean throughout your ownership period will help prevent any unnecessary damage to the paintwork and body.
· Stay on top of servicing and repairs: A regularly serviced car is naturally going to offer a lot more reassurance to a buyer than a vehicle with no service history to its name. Likewise, if you look to repair any minor dings and scratches to your vehicle that you run into while you own it, you will see the benefit of that approach come sale time.
· Keep hold of key documents: Serious used car buyers want your vehicle’s documentation to get an idea of its true condition. Certainly, when you’re part-exchanging a vehicle, you will be expected to produce a number of documents for your car. If you can keep hold of all of your key paperwork (including your car’s V5C, a valid MOT certificate, original owner’s manual and original proof of purchase) and are able to provide a documented service history, you’ll find yourself in a stronger selling position.
· Invest in features: We’ve discussed above that some features on a car can really add to its value. If you invest in the right ones, it could well pay dividends when getting the value you want on your car.
· Time your sale: If you’re not desperate to sell, take your time to choose a period where conditions suit your sale and don’t be afraid to look around to get the best deal.
How can I find out how much my car is worth? Use our free car worth calculator today
The first question you should be asking yourself before heading into any sale, part-ex or trade-in deal is “what’s my car worth?”
While we’ve just discussed above the differentiating factors that can contribute to or take away from a car’s value, your starting point should be to get a reasonably accurate steer on a fair price for your car. Our free valuation tool allows you to check your car’s worth quickly and effectively, so you’ve got a good idea of where you stand going into any trade-in.