• Used Car Valuation Process

    There are many factors taken into consideration when setting value for a used car. While the car valuation process remains more or less the same for all vehicles, it is worth noting that not every car is the same. The valuation of two cars belonging to the same brand and same model might differ in many cases because of their condition.

    There is no exact science when it comes to determining the accurate value of a car. No matter how reasonable you try to be, certain amount of subjectivity from the owner’s point of view is unavoidable. It could be a daunting task to assess the exact value of a car considering the fact that owners always prefer to get more money from a resale. However, the car valuation process given here can guide you on arriving at the true value of a used car.

    The value of a car is usually determined by the following factors.

    • Condition of the vehicle
    • Number of kilometres driven
    • Year of purchase (vehicle model)
    • Service history
    • Accident history
    Condition of the Vehicle

    The external look of a car is important in making a good first impression. If there are any scratches or dents, it could bring down the value of your vehicle even if the interiors are in great condition. Make sure that you fix the exterior damages before you put your car up for sale. A car is considered to be in good condition if it has proper maintenance records, no major mechanical problems, and passed all inspections set forth by state regulations.

    It is common for a car to suffer normal wear and tear consistent with its age. To arrive at the exact value, it is necessary to check the car’s engine condition, gear smoothness, clutch, braking system, steering ease, tyre tread, etc. Based on the wear and tear suffered by these systems, you can get a fair assessment of your car’s condition. Also, make sure that there is no unnecessary noise coming from the car. If you don’t have any expertise in assessing these systems, you can bring in an expert to check the car and provide a fair assessment report.

    Number of Kilometres Driven

    It goes without saying that the number of kilometres driven is inversely proportional to the value of a car. In order words, the higher the number of kilometres in your car’s odometer, the lower its valuation. The general thinking here is that a car can be driven for a certain number of kilometres before it starts causing frequent troubles. Most people in Indian metros drive around 10 thousand to 15 thousand kilometres per year. If the yearly average is much higher than this, the valuation is likely to be less.

    Most car owners try to sell their cars before they reach the 1 lakh kilometres mark. Cars that have more than 1 lakh kilometres in the odometer reading are likely to have very low resale value even if they are well maintained. This is because many people have a psychological barrier in choosing a car with over 1 lakh kilometres. Odometer reading is one of the most crucial factors in valuing your car. During a car valuation process, you must take this into consideration.

    Year of Purchase

    In addition to the number of kilometres driven, the year of purchase is also an essential factor to be considered in the car valuation process. If a car is older than 10 years, it will significantly impact the price of the car. In certain cases, a particular vehicle model may be discontinued by the manufacturer. In such cases, it might be harder to find spare parts for those vehicles. The valuation of these vehicles might be lower than the valuation of vehicles that are still in production.

    Sample Car Valuation Grid*

    Here is a sample valuation grid for petrol and diesel cars based on the depreciation they go through in a year and the number of kilometres driven.

    Age of the car Depreciation up to 12,000 km Depreciation from 12,000 to 25,000 km Depreciation from 25,000 to 35,000 km Depreciation from 35,000 to 50,000 km Depreciation from 50,000 to 60,000 km
    1 year 15% 20% - - -
    2 years 20% 25% - - -
    3 years 25% 30% 35% 40% -
    4 years - 30% 35% 40% 45%
    5 years - 35% 40% 45% 50%

    This is a sample grid that can be used in the car valuation process. For instance, let’s assume that you have bought a car for Rs.5 lakh. After one year and 10,000 kms driven, the vehicle will be worth Rs.4.25 lakh (depreciation 15%).

    Cars that are driven for more than 1 lakh kilometres typically experience more than 85% in depreciation. Moreover, cars that are older than 15 years can be sold only for scrap value.

    *The table given here is not an absolute one used to calculate the value of a car. It gives a sample estimate on how a car can be priced. The actual purchase value of a car may vary based on its condition, service history, accident history, and other parameters.

    Service History

    A car’s service history can provide a lot of information about its present-day quality. There are many car owners who perform periodic checkup even if there is nothing wrong with the car. If a car is serviced regularly at authorized service centres, it is highly likely to be well maintained. Some owners prefer to get their cars serviced at private garages rather than authorized service centres. Bear in mind that it is not uncommon to see private garages provide service quality as good as (or even better than) authorized service centres.

    When reviewing a car’s service history, it is necessary to look at the spare parts changed for the car. Cars that have genuine replacement parts value higher than the ones with OEM (not made by the manufacturer) parts. Also, minor things like periodic engine oil replacement can help value a car better. If you maintain the complete service history of your vehicle, you could negotiate a better price with a buyer.

    Accident History

    It is quite obvious that damaged cars are worth less in value. However, this also holds true even for cars that are fully repaired after an accident. If the damages are only cosmetic, the resale value of a car may not be heavily affected. On the other hand, a car involved in a full on collision will be worth a lot less than its trade-in value. The car might be fully repaired, but buyers are always going to have doubts about any secondary problems that may emerge from the vehicle. If your car has sustained any major structural or mechanical damages, it could significantly bring down its price in the car valuation process. In most cases, buyers prefer to look at the insurance claim history of a car to know the accident history.


    There are many car owners who like to personalize their vehicles with some aftermarket modifications. Strictly speaking from the resale point of view, this kind of customizations may not add any value to a car. In fact, these modifications could hurt the value of a car. Buyers might doubt the quality of modifications performed in a vehicle. Moreover, a vehicle owner’s sense of personalisation might differ from the mainstream view. Hence, this might affect the price of a vehicle in the car valuation process.

    Other Factors

    In addition to the ones listed here, a few other factors may also have a moderate impact during the car valuation process. For instance, the location of a vehicle is also likely to affect its resale value by a certain extent. Certain vehicles tend to perform well in certain locations. This could mean that the demand for used car vary based on specific locations. Other factors like colour of the car and number of owners may also impact the resale value of a car.

    Used Car Valuation Online

    Based on the above-mentioned factors, you can get a fair idea about the resale price you can expect for your car.If you are not sure about how to value your vehicle, you can use an online tool to get the approximate price of the car. There are many websites that can help you with this task. All you have to do is enter the vehicle details including brand, model, version, location, ownership, etc.

    Once you have entered these details, you can get the approximate price you can expect for this vehicle. It must be noted that this tool considers the depreciation value of the vehicle, but it does not account for any damages that may have sustained during an accident. The actual trade-in value of the car might differ a little from this estimate price.

    How to Get Better Valuation for a Car?

    Used car valuation is influenced by the above mentioned factors. A used car will go through a certain level of depreciation no matter what you do. However, there are certain things that you can do to get better valuation for your car. Focus on the following tips to get better value when selling in the used car market.

    Focus on the exteriors- The exterior look of the vehicle is the first thing that impresses a prospective buyer. If the car is full of scratches and dents, the valuation will be low no matter how good the engine condition is. Hence, fix all the exterior scratches and dents before you negotiate its value.

    Maintain a service history- Some car owners neglect this aspect of vehicle maintenance. In addition to maintaining the vehicle, it is also essential to save the service records. By showing the service history, you can provide proof that the vehicle is well maintained. Through this way, you can get a better valuation for your car.

    Ensure proper driving- Most buyers often get expert help to check the condition of a car. If you are a rash driver, an automobile expert can easily identity it through the condition of the car. Moreover, a collision will drastically affect the resale value of a var.

    Use genuine replacement parts- Replacing worn out parts is a common thing in vehicle maintenance. When you have genuine replacement parts in your car, you can use that to get better valuation for the car.

    When you sell a car, negotiate with more than one prospective buyer before finalizing the value.

    To Sum Up

    Among the factors listed here in the car valuation process, the condition of the car and the number of kilometres driven take the top two spots without a doubt. While there are no hard and fast rules in the valuation process, various factors contribute to the resale value of a car. If you want a better resale value for your vehicle, make sure that it is well maintained and properly serviced. If you focus on the major factors listed here, you could negotiate a better resale value for your car.

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