How to Determine the Value of a Car
The moment you drive your new car out of the showroom is when your car value depreciates. That is the nature of the car market and why used care prices are usually more affordable. Hence, with high COE prices, it is essential to know the value of your car in your journey of car ownership, be it for getting a quote on your car insurance, or wanting to sell your car.
If you’re fresh to car ownership or want to learn more about second-hand car purchasing, check out our Buying, Owning, Driving, and Selling a Car in Singapore Course.
1. Understand how a car depreciates
By understanding how a car depreciates allows owners and buyers to gauge how much their car is worth. This is extremely useful when you want to sell your car and also when buying a new car.
Here is how the annual depreciation of a car is calculated:
Annual Car Value Depreciation = (Total cost of vehicle – sale value of the vehicle)/Number of Years in Service
With this, you will have a better grasp of the car value and make it easier to negotiate car deals.
2. Do market research
Another way to determine the car’s value is to do some online research by browsing online catalogs and car sales websites. There are a wide variety of cars, of different models and ages, that you can compare with.
Please note that some of the estimates of the cars listed online may not be entirely accurate as it is listed by dealers and may have their value adjusted according to the condition of the cars as well as the packages that they may come with.
3. Check with car dealers
If you are planning to sell your car, you can check with a few car dealers the sale value by providing the car log card and mileage. This will allow you to gauge and compare the value of your car.
4. Maintenance records/ History
If you are buying a used car, the maintenance records are another important thing to take note of as it shows how much care and maintenance the previous owner has given to the car. Please note if the maintenance is done by a car agent or third-party workshop. The car agent will do car maintenance according to the standard check procedure whereas third-party workshops will most likely just fix only the problem and not do a thorough check.
This will determine the operational value of the car and how much maintenance costs are to be factored in above the purchase value of the car. Hence it is very important to do proper maintenance to maintain the health and operational readiness of the car.
If you’re excited to begin taking greater charge over the care and maintenance of your car and want to learn more in-depth knowledge, take a look at our Basic Car Maintenance for Everyone course.