Anyone who has bought or sold a used car in South Africa are likely to have heard the terms ‘book’ and ‘trade’ value.
The ‘book’ value typically refers to the prices published in the Transunion Auto Dealers’ Guide, explains Jamie Surkont, director at used car retailer getWorth.
“The book is used as a guide or base pricing instrument and one must still take into account many other factors that can affect a car’s selling price or market value,” he said.
“Factors such as the condition and history of the car, its colour and mileage, demand, the state of the economy or inflation rate can all impact the car’s actual value.”
He explained that the book value is therefore a price guideline that the automotive, insurance and car finance industries us to arrive at an approximate value.
“The market (or trade) value, on the other hand, is the price that can actually be obtained by selling an asset on a competitive or open market. Therefore, in car terms, it is the price you will be able to sell it for,” he aid.
Surkont said that the guide shows two numbers for each car variant and year – a retail price and a trade price. “When many people refer to ‘book’ value, they often aren’t aware there are two prices within the book,” he said.
This leads to some confusion as South Africans have been led to believe that the book value is what their car is worth in the open market – however this is not the case, he said.
“The book value is a rough guide to what you might get paid. Real market values might be higher or lower – sometimes by quite a large amount.”
How much is your car actually worth?
According to Surkont, the best way to estimate the market value of your car is to do your homework.
“Go onto websites and compare similar cars to yours. Be realistic about the condition of your car and inspect your car with fresh eyes, as if you were a buyer,” he said.
“Blemishes, damage and mechanical issues will affect what you will get. Then make allowances for the dealer’s margin or the discount that someone buying privately would normally expect. Older cars, slow sellers or cars that are difficult to price would require a higher margin.”
“Popularity of a car doesn’t necessarily mean it will command a high price – it depends on the market at the time. For example, Hyundai i10s and Volkswagen Polo Vivos might be popular cars, but when the rental car companies flood the market with thousands of ex-rentals it will depress the prices.”
Surkont offered these tips on how to ready your car for a sale:
- Clean your car, inside and out. A dirty car full of trash makes a negative impression, and a buyer will ask themselves whether the car was also poorly cared for.
- Be honest about the condition. It’s not going to increase your price, but honesty will increase your chances of a successful sale.
- If it is close to a service, then get that done before selling. If a buyer knows that a car has recently been checked mechanically, their confidence in the car will be higher.
- Make sure your basic maintenance is up to date – if the brakes are shot, or the tyres bald, replace them.
- Should your car require minor cosmetic panel work, instead of fixing it yourself, rather sell it to a reputable car retailer that will get it fixed properly. You will save money in the long-run.
- Get your admin together. Find your registration papers, find your spare key, find your service book.