Factors that determine the value of a used vehicle

Are you trying to work out how used cars are valued? Whether you’re trading in, selling privately or looking for a cash offer, the price a buyer will pay comes down to a handful of factors. Some are fixed the day you buy the car; others depend on how you look after it.

Drawing on our experience valuing and buying second-hand vehicles, we’ve outlined the main things that change your car’s value over time, and what you can do about the ones within your control.

The car’s make and model

The make and model of your car is one of the most important factors in any valuation.

A brand’s reputation matters a great deal to second-hand buyers, and resale values vary noticeably from one manufacturer to the next, as well as between models from the same manufacturer. Popular, well-regarded models attract more buyers, and more buyers means stronger prices.

German brands are a good example. They are well known for their engineering and build quality, and many buyers are willing to pay more for a used BMW, Mercedes-Benz, Audi or Volkswagen because they trust the badge. You can see which models tend to hold up best in our guide to European cars with the highest resale value.

Body style plays a part too. In Australia, utes and SUVs remain in strong demand, so a well-kept example of a popular model usually finds a buyer quickly. The exact variant also counts: the engine, transmission, trim level and factory options all influence what the car is worth.

Mileage

The odometer reading is one of the clearest indicators of a vehicle’s wear and tear. A car with very high kilometres has been used heavily over a long period, and every major component has done more work.

That makes high-kilometre cars harder to sell. Most buyers prefer lower kilometres because they expect fewer problems and smaller repair bills in the years ahead.

Buyers and valuers judge kilometres in the context of the car’s age. A three-year-old car that has covered far more distance than is typical for its age will be marked down, while one that has covered less will usually attract a premium. Unless your car is a collectable classic, unusually high kilometres will mean a noticeably lower resale value.

Fuel efficiency

Fuel consumption has become a key consideration for many buyers. Fuel is a regular part of most household budgets, and few people want a car that uses it at an excessive rate.

Running costs aren’t the only reason. Fuel-efficient cars generally produce fewer emissions, and with more hybrid and electric vehicles on Australian roads, more buyers are paying attention to how much a car uses. If you’re buying with an eye on selling later, an efficient model can make the car easier to sell and help it hold its value.

The interior and exterior condition

How your car looks is a critical factor in its resale value.

Make, model and fuel efficiency are largely fixed once you’ve bought the car, but its condition is down to you. Keeping your vehicle in the best possible shape is one of the most reliable ways to protect its value.

On the outside, that means:

• Looking after the paintwork and repairing obvious chips, scratches and dents
• Fixing kerb damage to wheels and replacing cracked lights or mirrors
• Keeping the car clean and protected from the sun where possible

On the inside, it means:

• Repairing torn, stained or worn upholstery
• Fixing damaged dashboard, trim and door panels
• Keeping the cabin clean and free of smoke and pet odours

Some wear and tear is normal after years of ownership, and buyers expect it. Still, anything you can do to make the car look cared for will lift its overall value. Our checklist for preparing your car for sale covers the details.

Regular servicing

It might seem obvious, but regular servicing is essential. It keeps your car running reliably and protects its value at the same time.

A complete service history, ideally recorded in the logbook with receipts to back it up, gives buyers confidence that the car has been looked after. Gaps in the history raise questions, and buyers will often lower their offer to allow for unknown problems.

It’s also worth investing some time and money in rust repair and other minor fixes. Small issues left alone tend to become bigger ones, and they are easy for a buyer or inspector to spot. If you own a European car, our tips for maintaining European cars for resale go into more detail.

Other factors that affect the price

Beyond the main factors above, a few other things can move the number:

• Age: most cars lose value fastest in their first few years, and newer cars generally attract stronger offers.
• Accident and damage history: repaired damage, especially structural damage, can reduce what buyers are willing to pay.
• Colour: neutral colours such as white, silver, grey and black tend to appeal to the widest pool of buyers.
• Market demand: prices move with supply and local conditions, so the same car can be worth different amounts at different times.

Find out what your car is worth

Are you wondering how your own car would be valued? Talk to the team at Sell Your Car Australia for a free, no-obligation valuation. Our owner has been a valuer, wholesaler and licensed dealer since 1992. Once you submit a few details, we’ll call you to discuss your car and give you a genuine cash offer rather than an automated estimate.

We currently buy vehicles from 2021 onwards with 100,000 km or less, of any make, with strong demand for European and prestige cars, utes and SUVs. If you still owe money on the car, that’s fine too: we work directly with your lender to settle the finance.