How Car Valuation Companies Value Vehicles


Establishing the value of an automobile is hugely important in the used car market. The seller wants to set a fair price for the vehicle and make sure that they do not undercharge, whilst the buyer will want to find out an accurate valuation so that they do not overpay for the automobile.

Influencing Factors

Identifying the value can be tricky as no two cars are the same and there are various factors that influence the value of a car. Just a few of these include the make, model, year, condition, mileage, MPG and safety features. Other important factors are demand in the market, sales figures and the time of the year.

Valuation Methods

How much is my car worth?” is a question that every seller will need to ask themselves and there are a few different ways that you can come to a figure. These include looking in the classifieds for a similar car, asking at a dealership or using a valuation company. The latter is the most effective tool as it provides the most accurate valuations and this is how insurance companies, dealerships, vehicle manufacturers, importers and others in the industry value vehicles.

How Valuations are Made

Car valuation companies value cars in a number of different ways. This includes monthly car auction sale observations, retail observations from popular web portals, market trend surveys and auction visits. Additionally, these valuation companies constantly meet with motor trade experts, manufacturers, dealers, auctioneers, customers, rental companies and others in the industry to gain a deeper insight into current values.

With all this data, these companies then meet each month where they analyze the observations. Depreciation curves and differentials are reviewed and applied before “real world” experiences are overlaid by editors.Values can then be set and data cross-checked with any exceptions and anomalies addressed. It is important that this process is carried out each month as the market can fluctuate greatly.

These companies then provide their findings to those in the industry so that they can set fair prices and maximize profit. It is a lot more accurate than browsing the classifieds or asking at a dealership and this is why they are relied on so heavily by people in the industry.

Car valuations are hugely important for everyone in the motor trade industry, but they can also be tricky to get right. Car valuation companies do all of the hard work and pull important data and observations so that the right value for a particular car can be established.