Most car buyers nowadays opt to go with the trade-in option while buying a new car, rather than selling it separately. The trend for trade-in has caught up not only due to the increase in average disposable incomes, but also because it’s being seen as a more hassle free option. Did you know that selling your car directly to the buyer can actually fetch you more money?
Read more about all the factors which affect the car valuation.
1. Trade-in value / Wholesale price & Retail price
It’s important that you know that many car manufacturers like Mahindra, Ford etc. have a used car businesses that they use for re-selling the cars that you trade-in. These cars are then sold to car buyers looking for used car options on which the manufacturer earns some nominal profit.
The trade-in value that you get for your car will always be less than what you would get by selling to a direct customer for retail price. It’s better to know both the values and sell your car at a maximum profit. Online tools like Indian Blue Book can provide both values.
2. Odometer Reading
While a car comes with a fitness certificate that’s valid for 15years, but a car has practically not aged if it has not been driven at all, so actually a car that’s being used less actually commands more value in accordance with its propinquity to the fitness expiry as mentioned on the registration certificate.
You should also know that while on an average, petrol engines are rated good for 2 lakh kilometres, a well kept diesel engine would actually have twice the life of petrol engine. Not only that since you pay more for the diesel, it should return more value at the time of resale.
3. Car's Condition
The condition of the car makes a great difference to the car’s valuation. Generally, a car’s condition is rated between fair, good and excellent. Expect a good value if the car’s visually appealing, a car with least amount of modifications done to the exteriors attracts better value. In general, it also gives an idea about how the car’s been driven and taken care of. A clean engine bay and interiors is another factor that adds great value something that an evaluator / buyer would definitely notice.
4. Car Make & Variant
It is common knowledge that some brands offer better resale value than others in general. However, you should also know that only right kind of buyers can offer good value for cars that are respected otherwise and not for sales or for the brand that they belong to, and are therefore considered as risky to buy as a first car option.
Some of the driver focused cars like Punto, latest generation Fiesta are such options. They may not offer great resale value in the wholesale market. However, if sold to the buyer who appreciates the cars would offer better value. The higher variants that offer more features would practically provide better resale value too.
5. Year of Manufacturing
A car that’s aged on paper, has aged according to the norms of country's automotive authorities, which would make it unfit for plying on road, regardless of it's odometer reading. Therefore, a car that has been used sparingly and has only say about 2-3 years of life left, is actually nearing towards being scrapped.
Unless government comes up with measures that can practically access each car’s condition and provide fitness certificates accordingly, cars that have aged on paper will continue to get scrapped regardless of their actual condition. It’s one of the biggest factors that affect the valuation price.