Santam has provided a guide to help consumers understand how vehicle prices are calculated and how to find out how much your vehicle is really worth.
Selling your vehicle privately could get you more cash. But, for some, life’s too short to field calls and do weekend test-drives.
A trade-in is a much more convenient option: you have an abundance of dealerships and vehicles to choose from and they make everything easy and hassle-free for you.
But hassle-free also means you will need to contend with some drawbacks, namely that dealerships generally pay less for your pre-owned vehicle.
The factors that impact vehicle prices
The pre-owned vehicle market fluctuates daily so you can never completely pinpoint a price. There are several factors that determine a vehicle’s value, such as:
- The vehicle’s age
- The overall condition of the vehicle
- Previous accidents and the quality of the repairs done
- Costs of reconditioning the vehicle
- Prevailing market forces and popularity of vehicles – which could differ from region to region
- Factory or non-factory fitted extras of the vehicle
The demand for vehicles in the pre-owned market space also has an influence, Santam said.
For example, when the rand weakens and interest rates and fuel prices rise, consumers will naturally put the brakes on spending. The current economic climate in South Africa has also caused a renewed emphasis on the acquisition of vehicles in the pre-owned or ‘used’ market.
How trade-in values are determined
Santam noted that the TransUnion Auto Dealer Guide is widely regarded as the must-have vehicle information resource for used vehicles’ trade and retail values.
Each month, TransUnion receives information from major dealerships nationwide on typical trade and retail prices, which is then evaluated on a central database to provide retail and trade values contained in their guide.
“It’s important to remember that the retail prices of vehicles you see on showroom floors or on websites such as Auto Trader include the dealer’s mark-up and any services it had to do or parts it provided to make it sale-ready.
“The trade price – also called book value – of a car is the average remuneration paid for particular used vehicles by major pre-owned dealerships linked to the TransUnion database.”
How to get an accurate trade-in estimate
There are many ways to determine an average value for your model of vehicle, and it’s a good idea to apply the below methods to arrive at reasonable trade-in value:
- Do online research: Look for similar models/year of manufacture as your vehicle on the likes of Autotrader and Carfind to see how much they typically sell for.
- Call a few dealerships: They may not want to give you an estimate without seeing the condition of the vehicle first but it might give you a rough idea.
- Use an independent source: TransUnion’s vehicle Value Report offers insights into the retail and trade-in value of your vehicle. Zoopla and Bookvalue are two additional options to explore, while many insurers also offer vehicle evaluation calculators.