When you want to insure, sell or trade-in your car, you will want to know how much it’s worth. A car valuation helps you estimate the value of your vehicle. You could start by getting an approximate estimate from a free online tool, but this is an automated calculation without an in-person inspection. For a more accurate valuation, you’ll need to go to a qualified independent valuer or dealership. That way, you can get a car valuation certificate based on specific details about the model and condition of your vehicle.
A car valuation is helpful when taking out a comprehensive car insurance policy. If you put your car on the market, the valuation helps you set the price you expect for it, and shows buyers that this price is accurate. If you’re looking to buy a second-hand car, then you should try to get a valuation before you finalise the deal. And if you want to trade-in your current vehicle for a new one, then a car valuation certificate helps you compare offers from different dealers.
Disclaimer
This article is over two years old, last updated on May 23, 2022. While RateCity makes best efforts to update every important article regularly, the information in this piece may not be as relevant as it once was. Alternatively, please consider checking recent car insurance articles.
Each vehicle is different, starting from the make, model, and features, to how old it is and how well it’s been maintained. The factors affecting the value of your vehicle include:
The model of your vehicle and the company that manufactures it affects its valuation. Some car brands are perceived to be more reliable, so their cars tend to be valued higher than other makes. Popular models are also more highly valued as there is more demand for them in the resale market.
A car’s value reduces as it gets older. Older cars are likely to fetch lower prices on the second-hand market than newer ones as buyers have to plan for maintenance costs and insurance premiums.
The total number of kilometers that your car has covered affects the price that buyers are prepared to pay for it. A car with lower mileage is valued higher as it’s likely to have less wear and tear than another with higher mileage.
You are likely to get a higher valuation if you have maintained your car well over the years. The condition of mechanical parts, body, paint, and interiors will affect its price. Excessive rust may bring down the valuation of the vehicle. If you have been ensuring the car is serviced regularly and have the service history document, you may get a better valuation, as this gives buyers the confidence that recommended maintenance has been completed.
Most car insurance policies are based on market value. If your car is in an accident or totalled, the insurance company will need to pay you the price your car could get if it was sold while in good condition. So your insurer will conduct a car valuation, taking into account the depreciation on the original cost of the car. Such a car valuation may not consider the condition of your car before the accident and be based only on its make, model, and age. The insurance company may give a valuation that’s lower than the amount the trade-in value of your car would have been.
The other type of car insurance you could choose is called agreed value car insurance. In this case, you can specify the amount you want to receive but may need to pay a higher premium.
This article was reviewed by Georgia Brown before it was published as part of RateCity's Fact Check process.
