Understanding What Affects the Retail and Market Value of Used Vehicles

Ideation Digital
21st Nov, 2024

When selling a used vehicle, many owners often have a figure in mind for what they believe their car is worth. However, the reality is that the retail and market value of a used car is influenced by several factors, many of which sellers may not fully understand.

At Brazen Auto, we pride ourselves on offering fair and competitive valuations for used vehicles. To help you better understand how we arrive at these figures, let’s explore the key factors that impact the value of your car and why it might differ from your expectations.

 

Key Factors That Affect Used Vehicle Values In SA

1. Vehicle Condition: The Biggest Determinant

The condition of a vehicle is one of the most critical factors when determining its market and retail value. Even if you’re selling a relatively new car, its value can drop significantly if:

• It has been in an accident or multiple accidents
• There are visible dents, scratches, or rust
• The interior is worn, stained, or damaged
• The car struggles mechanically (e.g., engine issues, alignment problems, etc.)

Buyers and valuation experts like Brazen Auto will closely inspect both the exterior and interior condition of your vehicle. A 2023 model that "barely drives straight" due to prior accidents or neglect will naturally fetch a lower price than a well-maintained older vehicle.

2. Mileage: Wear and Tear Over Time

The mileage on your vehicle gives a clear indication of how much it has been used. Cars with higher mileage typically have more wear and tear, even if they are in decent condition. This is because high mileage often translates to greater maintenance needs and a shorter remaining lifespan, which reduces the resale value.

Conversely, a car with low mileage can often command a higher price, provided it is in good condition and hasn’t been sitting idle for extended periods without regular maintenance.

3. Spare Parts Availability and Costs

A factor that many sellers overlook is the availability and cost of spare parts for their vehicles. If a car’s parts are:

• Expensive to replace, or
• Difficult to source locally, its value decreases.

This is especially true for discontinued models or vehicles from less common brands. Buyers and dealers consider the long-term costs of maintaining a car, and a high-maintenance vehicle will always have a lower market value.

4. Vehicle Age and Model Popularity

Even if your car is in excellent condition, its age and model can affect its value. Older vehicles typically depreciate more, but there’s also the matter of model popularity:

• If a particular model is highly sought-after in the second-hand market, its value may hold better.
• If a model has fallen out of favour or is outdated, its resale value will likely drop.

Discontinued models, while sometimes rare, can be harder to sell because buyers fear issues with spare parts and long-term support.

5. Economic Influences: Exchange Rates and Inflation

Used car values don’t exist in a vacuum, they’re also influenced by broader economic factors like:

• Exchange rates: If the Rand weakens, the cost of importing parts or replacement vehicles rises, which can increase or decrease the value of certain cars.
• Inflation and interest rates: Higher inflation increases the cost of maintenance and repairs, which can make a vehicle less attractive. Meanwhile, higher interest rates reduce buying power, often lowering market demand and resale values.

These economic changes can happen quickly, which is why a car valuation done six months ago may no longer hold true.

6. Supply and Demand in the Market

The supply and demand for used vehicles can shift based on:

• Fuel prices: If fuel prices rise, fuel-efficient cars tend to become more desirable and command higher values.
• Seasonality: Certain times of the year, like the start of summer holidays, may see increased demand for specific vehicle types, like SUVs or 4x4s.

An oversupply of similar vehicles on the market, however, can drive prices down, even for well-maintained cars.

7. Service History: Proof of Maintenance Matters

A complete and transparent service history is a key factor in securing a higher value for your car. Regular maintenance records give buyers confidence in the vehicle’s reliability and lower the risk of unexpected repairs.

Without these records, even a car in good condition may be valued lower, as the lack of documented care introduces uncertainty for potential buyers.

8. External Factors Over Time

Some car owners obtain a valuation and expect it to remain valid indefinitely. However, the value of a vehicle is subject to external changes, including:

• Changes in the regulatory environment: New laws regarding emissions or safety may devalue older models.
• Technological advancements: With the rise of electric vehicles and newer technology, older internal combustion engine vehicles may depreciate faster.
• Market conditions: As mentioned, shifts in supply and demand can occur rapidly.

These factors highlight the importance of acting quickly if you’re ready to sell. Waiting even a few months can significantly impact your car’s value.

 

Why Brazen Auto’s Valuations Are Fair and Reliable

At Brazen Auto, we understand that selling a vehicle can be an emotional and financial decision. Our expert evaluators take every relevant factor into account, including:

• The current market trends.
• The specific condition of your vehicle.
• The availability of parts for your car’s make and model.
• Economic and external factors affecting the automotive industry.

Our goal is to provide a valuation that is competitive, fair, and realistic based on the market conditions at the time of the evaluation.

 

Conclusion

The retail and market value of a used vehicle is shaped by many interconnected factors, from the condition of the car to broader economic trends. While sellers may have an expected price in mind, understanding these influences can help manage expectations and ensure a smoother selling process.

At Brazen Auto, we take pride in giving our clients transparent and fair valuations that reflect the real worth of their vehicles. If you’re ready to sell your car, contact us today for a professional evaluation and an offer you can trust.