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How to Work Out the Market Value of Your Car

Find out about the factors affecting your car's market value and how to assess its worth with Savvy's informative guide.

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, updated on March 6th, 2024       

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Car Insurance Banner - Young couple working out the market value of their car on a tablet while sitting in the boot

For many individuals, a car is one of the most significant purchases they’ll make. Whether you're buying, selling or insuring a car, understanding its market value is essential to make informed decisions. In this useful guide, we’ll look at what market value is, how to value your car and whether to choose market or agreed value when insuring your car.

What is the market value of my car?

When it comes to cars, ‘market value’ means the current estimated price at which a specific car model can be sold in the market. Knowing your car’s market value is important when purchasing a vehicle or putting it up for sale, helping to ensure you get a fair deal, and in an insurance context determines the amount your insurer will pay if your car is written off or stolen.

A number of factors can affect a car’s market value, including:

  • Age: cars typically depreciate over time, with newer models generally holding higher value than older ones, with the exception of certain vintage or rare vehicles.
  • Mileage: lower mileage generally translates to a higher value, as it indicates less wear and tear and better overall condition.
  • Make and model: popular and reputable brands tend to retain their value better due to higher demand in the used car market.
  • Condition: the interior, exterior and mechanical condition of your car significantly impact its value, with well-maintained cars fetching higher prices.
  • Engine and transmission: automatic transmissions often come with a higher price tag in both new and used cars.
  • Vehicle history and registration: a clean, accident-free history with documented service records enhances a car’s value.
  • Colour: colours like silver and white are more popular and can increase a car's desirability, while more unique colours may lower its value.
  • Extra features: certain features, like leather seats and advanced technology, can boost a car’s value, while excessive modifications may have the opposite effect.

How do I determine my car’s market value?

A car valuation, also known as an appraisal, is an estimate of your vehicle’s current price. This figure serves as a benchmark when buying, selling or trading in a car, and can help with determining suitable car insurance coverage and affordability.

You can get support finding out your car’s approximate value in several ways:

  • Online appraisal tools: online valuation tools may help you figure out the approximate value of your car, though keep in mind these often provide automated estimates and may not consider all relevant factors.
  • Professional valuers: an independent valuer or dealership can perform an in-person evaluation that will consider specific details and features of your car.
  • Car valuation reports: some platforms offer personalised valuation reports that consider factors like kilometres travelled, car condition and additional options.
  • Compare similar cars online: use websites to search and compare used cars for sale by make, model, year, transmission type, and more, helping you understand the average range for a vehicle like yours.

Should I insure my car for its market value or agreed value?

When you take out car insurance, you may be given the option to insure your vehicle for its market value or an agreed value. The agreed value is a set amount agreed with your insurer at the start of your policy, and is the amount you’ll be paid in the event your car is written off, even if its value has depreciated. Both options have their pros and cons, so it's essential to understand the difference between them to make an informed choice when insuring your vehicle:

  • Market value: cost-effective with lower premiums, but if your car depreciates significantly, the payout might be less than expected.
  • Agreed value: guaranteed payout in the event of a write-off, but premiums are generally higher.

Which to choose depends on a variety of factors, such as your car’s age and condition, your budget and whether you have a unique or modified vehicle that is more valuable than a standard model.

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Disclaimer:

Savvy (ABN 78 660 493 194, ACR 541 339) provides readers with a variety of car insurance policies to compare. Savvy earns a commission from our partnered insurers each time a customer buys a car insurance policy via our website. All purchases are conducted via our partners’ websites. The integrity of our comparison service is unaffected by our partnerships with those businesses and our effort remains to bring further brands that do not already use our comparison service onboard.

Savvy’s comparison service includes selected products from a panel of trusted insurers and does not compare all products in the market. Any advice presented above or on other pages is general in nature and doesn’t consider your personal or business objectives, needs or finances. It’s always important to consider whether advice is suitable for you before purchasing an insurance policy. We always recommend readers to consult the Product Disclosure Statement (PDS) of different policies before purchasing your car insurance.

Car Insurance Banner - Young couple working out the market value of their car on a tablet while sitting in the boot

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