How to determine used car value
This article was originally published in November 2019 and has been updated.
If you’re considering selling or trading in your new car, ask yourself, ‘how much is my car worth?’. Price it too low, and you risk cheating yourself; too high, and you may not be able to sell it as quickly as you’d like, or at all.
Here’s some tips on how to calculate the value of a used car, and the key factors impacting what buyers are willing to pay. With second-hand vehicles currently in high demand across the country1, it may be more than you think.
1. What are the factors that determine used car value?
One of the most important steps in valuing your used car and setting a sales price is understanding what impacts your car’s worth.
Car age
Cars are a depreciating asset. As your car ages, its value decreases. Highly sought-after, rare or vintage vehicles can buck this trend as can changes to the market but generally, a newer second-hand car of the same make, model, mileage and condition may sell for more than an older one.
Car mileage
The lower the kilometres, the better your used car value. An increase in kilometres often correlates to an increase in a vehicle’s wear and tear. The average Australian vehicle travels 12.1 thousand kilometres a year2. Your car will likely be more valuable if it has done fewer kilometres than average for its age.
Car make and model
Popular and reputable models and brands typically hold their value and command a higher price because there’s more demand for them in the second-hand market. Different makes and models have varying features, styles and attributes contributing to their value.
So, what makes and models of cars have good used car values Australia-wide? According to research conducted by Drive.com.au in 20203, the used cars most likely to hold their value include (sorted brand alphabetically):
- Ford: Mustang, Ranger
- Holden: Colorado, Commodore
- Mazda: 3, CX-3, CX-5
- Mitsubishi: Outlander
- Nissan: X-Trail
- Porsche: Porsche Macan
- Range Rover: Range Rover Sport
- Subaru: Forester
- Toyota: Camry, C-HR, Corolla, HiLux, Kluger, LandCruiser, LandCruiser Prado, RAV4
- Volkswagen: Golf
General condition
The interior, exterior and mechanical condition of your car can also impact its value. The used car value diminishes with any apparent body or paint damage. The condition and functionality of things like upholstery, electronics, tyres, lights and mechanical parts also affect used car value.
Engine and transmission
Your car’s valuation can vary depending on the transmission type (automatic or manual). Automatics are typically more expensive to purchase new. Second-hand automatics are also worth more, but exceptions include some off-road, sports and luxury cars.
The vehicle’s history and registration
Previously written-off vehicles, or those with serious panel repairs, may hold less value than cars with a clean history. Buyers may pay more if your car hasn’t been in an accident and has a documented service history. Registered vehicles with roadworthy certificates can also secure higher sales prices.
Car features
Non-standard features like leather seats, automatic headlights, navigation, multi-media systems or reversing cameras can also increase the resale value of your car. Modifications and custom extras like super-sized wheels, stereo speakers or a rear spoiler don’t necessarily add monetary value to your car and can even lower it.
2. Compare similar used car values Australia-wide
Looking at comparable cars for sale online can help you see the average range for a vehicle in the same condition as yours. Prices can fluctuate depending on location, so it’s best to compare similar used car values Australia-wide.
On sites like Carsales and CarsGuide, you can search and compare used cars for sale by make, model, year, transmission type and more. Remember that advertisers list their asking price, and cars often sell for a negotiated value. Keep this in mind when considering how to determine your used car value.
3. Get a car valuation
A valuation can provide a detailed estimate of a car’s value in today’s market based on key factors influencing price. For some, that estimate can change dramatically over the years. If you’re stumped on how to calculate the value of a used car, consider using a valuation tool.
For a quick, online valuation, it’s useful to plug your car’s details into a free online valuation tool. Popular tools like carsales.com’s car valuation tool, Redbook’s online research and used car value tool and Drive’s online calculator consider a range of factors such as used car values Australia-wide. Most online tools give you an average price range for your used car in today’s market, broken down by private sale price versus trade-in price.
For a more personalised online report, sellers can use Redbook’s online Personal Valuation Report. It considers important details such as the kilometres travelled, the car’s condition, and any added factory and aftermarket options.
Online valuation reports usually provide automated estimates without needing an in-person inspection. If you’re after a more detailed and tailored appraisal, taking your car to an independent valuer for a professional valuation may offer you a more precise estimate that better considers your car’s condition and features. Whether you decide to sell privately or trade in – an independent report may help you negotiate confidently.
Protect your asset with insurance
If you’re buying a new car or holding on to your old one, protect it with the right insurance coverage. If you’re selling, insuring your car until the sale is final means you and your car stay protected until the last minute.
Find out more about the different levels of coverage that QBE offers with our guide to car insurance.
1 https://www.news.com.au/technology/motoring/on-the-road/bananas-neverbeforeseen-used-car-prices-in-australia/news-story/8515aec052ae1031a7e96387a270b18a
2 https://www.abs.gov.au/statistics/industry/tourism-and-transport/survey-motor-vehicle-use-australia/12-months-ended-30-june-2020
3 https://www.carsales.com.au/editorial/details/new-cars-that-retain-the-most-value-revealed-131735/
QBE Comprehensive Car Insurance is issued and underwritten by QBE Insurance (Australia) Limited (ABN 78 003 191 035, AFSL 239545). Any advice provided is general only and has been prepared without taking into account your objectives, financial situation or needs and may not be right for you. To decide if this product is right for you, please read the relevant Product Disclosure Statement (PDS) and Target Market Determination (TMD).
