While buying a pre-owned vehicle, it is important that you do the valuation of the car to determine whether it is worth buying. Besides, if you are planning to apply for a used car loan, you need to provide the lender with a valuation report of the used car that you intend to purchase, in order for them to sanction the loan. Here are some factors that will determine the value of your car.
Factors That Determine the Value of a Car
When it comes to the condition of the vehicle, many factors come into play. Like the way you examine the exteriors for any dents and scratches, the interiors matter too. Used cars come with some wear and tear. However, the condition of the engine, braking system, gear, steering, clutch, tyres, seats, etc. are important determinants of a car’s condition. Any mechanical problems and maintenance issues can bring down the value of the vehicle.
A general notion is that a vehicle starts giving functional troubles after it crosses a certain kilometre mark. Most owners, therefore, sell their vehicles before reaching the 1 lakh kilometres mark on the odometer. Cars driven beyond this mark will likely have a very low resale value. Moreover, most people going for a pre-owned car hesitate to buy cars with an odometer reading of over 1 lakh.
The odometer reading is a crucial factor in evaluating a used car. If it shows a higher number in kilometres, its value will be lesser.
Cars older than 10 years normally have a much lower resale value owing to the fact that most of such models are discontinued after a few years and that the availability of spare parts for them would be a hassle. As a result, dealers and buyers give priority to cars that are still under production.
A car that has been subject to accidents, be it major or minor, will have an impact on its value. While cosmetic damages are less likely to affect the value of the car, the one that underwent a major repair and makeover after a direct collision will have a much lower value. In such cases, the present appearance of the car does not matter much as buyers are more concerned about the future troubles that might arise out of the vehicle. The insurance claims for the vehicle can give away a lot of information on the accident history of the car.
A well-maintained car is what everyone wants to own. A car that has undergone regular check-ups and service maintenance is likely to be in good condition. Such cars with a record maintained for regular services and genuine spare part replacements will have a high trade value.
It is important to do a proper valuation of a used car before you decide to buy it. This can be done in two ways either offline or online:
1. Offline
One should verify the above-mentioned factors as they contribute to offline valuation. If you are uncertain about evaluating the vehicle, get an expert to examine and certify the car’s condition. Direct assessment is highly essential in thoroughly scrutinizing the condition of the car and for verifying the authenticity of its documents, besides getting a fair and quick idea about its real value.
2. Online
If you are unclear about the car’s value, rely on online tools offered by car dealers. The tools estimate the price of the car based on the year of manufacture, make and model of the car, number of kilometres driven, number of owners the car has ever had, and the city where it was driven. The biggest disadvantage is that it would only give you an approximate value of the car. The factors such as service, maintenance and accident history, which are crucial factors in determining the true value of a pre-owned car, are usually not considered for an online evaluation.
Once you are done with the car’s valuation, approach a renowned financial institution for availing a loan. Used car loans are sanctioned based on the valuation report of the car that you intend to buy, and so it is imperative that you undertake the process earnestly. A thorough valuation ensures that you get the best pre-owned car that suits your budget and needs.
