Car valuation is a key consideration when buying or selling a used car in Singapore, where the market for pre-owned vehicles is highly competitive. According to the Land Transport Authority, there were over 630,000 registered vehicles in Singapore as of 2020, and about 20% of those were used cars. In 2021, the top three best-selling used car models were the Toyota Corolla Altis, Honda Vezel, and Mercedes-Benz C-Class, with each model accounting for about 8-9% of the total sales in the used car market. Determining the fair market price for a pre-owned vehicle can be extremely challenging due to various factors that affect its value. To maximize the value of your car when selling, to understand all of these factors, and have a few tricks up your sleeve for ramping up its price — in this article we’re going to give you the skinny on what to watch out for and what to consider when calculating your used car’s valuation.
What is used car valuation?
Whether it’s Singapore, New York, Caracas, Buenos Aires, or Timbuktu, there are certain things that remain the same when selling off a used vehicle — and all of them are summed up in a rather loose, almost off-the-cuff calculation known as “car valuation.” What exactly is this mysterious algorithm and what factors are considered when coming up with the final tally?
Let’s find out.
Used car valuation is the process of determining the fair market price for a pre-owned vehicle based on various factors such as brand, model, mileage, age, and condition. It’s important to note that the value of a used car is not fixed and can fluctuate depending on market conditions and demand.
In Singapore, three main factors that affect car valuation are the Open Market Value – OMV, Registration Fee – ARF- and Certificate of Entitlement -COE.
- The OMV is the price of the car before any taxes or duties are added. It’s an important factor in determining the ARF,.
- ARF, meanwhile, is a tax imposed on the OMV of the vehicle when it is first registered.
- The COE, on the other hand, is a quota license that allows the holder to own and use a vehicle in Singapore for a period of ten years. The price of the COE is determined by demand and supply, and it can have a significant impact on the value of a used car.
All of these three factors are critical to a car’s valuation in Singapore — and they are inherent to the region since they are tied to the local government and economy. Nonetheless, there are other factors, universal at that, that also push and drive a car’s market value.
The brand value of a car can significantly affect its resale value. Popular and reputable brands tend to retain their value better than less well-known ones — when it comes to second car valuation a global brand, or one with international prestige, can drive up the price into the stratosphere.
Mileage and usage
The mileage and usage of a car can also affect its value — its used car valuation. Cars with higher mileage tend to have a lower resale value, while cars that have been used sparingly tend to retain their value better. There’s also a question of usage. Cars employed mostly for travel on highways, as opposed to those used in urban settings tend to cost more. Why? Because brakes, speeds, and shifts are used sparingly on the highways as opposed to a rather hectic city environment.
Condition and maintenance history
The condition of the car and its maintenance history can also affect its value. Cars that have been well-maintained and are in good condition tend to have a higher resale value than those that have been neglected or poorly maintained. In many cases, the best car valuation services have a detailed chronology of each service and maintenance performed on the vehicle.
Modifications and upgrades
Modifications and upgrades can also affect the value of a used car. While some modifications can increase the value of a car, others can decrease it. It’s important to understand which is which — which is an asset and which is a liability.
The accident history and insurance claims of a car can also impact its value. Cars that have been in multiple accidents or have a history of insurance claims may have a lower resale value. Accidents leave scars — and used car valuation takes those into account. Things from long ago may pop up and affect the way the car functions.
Insurance claims are a crucial factor in determining the car’s value, as any past accidents or repairs can lower its worth. It is essential to check the car’s accident history and obtain a report to assess any damages or repairs made to the vehicle.
Market conditions and demand also play a vital role in used car valuation in Singapore. A car that is in high demand will have a higher cost, while one that is in low demand will have a lower value. Market trends and the economy can also affect the value of used cars. For example, if there is an oversupply of a particular model, the value may decrease. On the other hand, if a car model is trending and is in demand and limited supply, the value may increase.
Some tips to really ramp up your used car valuation in Singapore
You bought a car and now want to keep it as close to a viable financial asset as possible — you want to earn some dough when it’s time to sell it off. Well, here are some invaluable tips to boost your used car valuation.
- Keep your car in good condition: Regular maintenance, cleaning, and repairs can increase the value of your car.
- Maintain a comprehensive record of the car’s maintenance history: Keep all receipts and records of repairs and services to show the buyer.
- Make necessary repairs before selling: Fix any issues with the car, such as dents, scratches, or broken parts, to increase its value.
- Clean the car inside and out: Ensure that the car is clean, spotless if possible, and presentable before putting it up for sale.
- Highlight any modifications or upgrades: If you have made any modifications – weird or not – or upgrades to the vehicle, make sure to highlight them to potential buyers.
- Disclose any accident history: Be honest about the car’s accident history and provide a detailed report if necessary — remember, buyers can contact insurance companies and get this info on their own.
- Price the car competitively: Research the market value of your car and price it competitively to attract potential buyers.
- Consider selling to a dealer: Selling your car to a dealer may offer a lower price, but it can save you time and effort in finding a buyer.