Car Valuation Is a Job for Professionals

Car valuation is determining its worth as of a given date, taking into account the vehicle's current condition. An expert car valuation is needed in all sorts of situations, such as settling an inheritance or dividing property in a divorce. A valuation is mandatory when a car is used as collateral. An independent car valuation is also needed when you have to set a price for selling the car, or when buying a car on credit.

Handing a vehicle over on lease, gifting a car, damage to a car from fire, a natural disaster, flooding, or the actions of third parties — these situations also call for an independent appraiser. Companies turn to an independent car valuation when they need to set a rental price for a given vehicle, when any property disputes arise, when they need to set a starting price for an auction, or when the vehicle is being written off the company's books. Forming an organisation's charter capital may also call for an independent appraisal. It's genuinely hard to determine a car's real worth without professional help, since that requires staying on top of the vehicle market, understanding the technical side of carrying out such a valuation, and avoiding mistakes along the way.

These days there are plenty of companies offering expert car-valuation services that, for a reasonable fee, will determine your car's market value and explain in detail exactly what shaped that figure. In some cases, specialists at such companies can offer consultations online or by phone. That way you can get a preliminary sense of your car's worth. In that kind of situation, though, the expert doesn't have enough information, and the report may not quite accurately reflect the car's market value.

What's more, that kind of report isn't official and carries no legal weight. It's more sensible to approach a valuation company directly. An independent car valuation is carried out using one of three approaches (comparative, cost-based, and income-based). The comparative approach is the most practical to use, since there's free access to information on car prices. The cost-based method is needed when determining the cost of repairing a car. The income-based approach applies only to rare, vintage cars, provided they generate income for their owner — for instance, the owner might rent them out for a film shoot. An expert car valuation requires information such as: the vehicle's name, make and model, factory number and series, manufacturer's data, technical passport, the dates of manufacture, purchase and entry into service, inventory number, and technical documentation. The expert may also need a document stating the vehicle's original price, servicing information, data on major overhauls, preventive maintenance and other repairs, and any defects in the car.

Some data can be arrived at through expert judgement. This includes, for example, information about repairs carried out, upgrades made, and the conditions under which the car was used. If mileage data is missing, the specialist factors in the average annual mileage for the specific region, based on reference tables. Under the agreement, the client ordering the independent valuation is responsible for the accuracy of the data they provide. The independent appraiser gives you a detailed valuation report for your car, drawn up in accordance with state standards.