Resale Value of your Car

What is my Car worth?

Hello, my name is Dirk Van Der Walt. I am a founding member and co-owner of Webuycars (Pty) Ltd. I studied at Tuks University, where I completed my degree in BCom in Marketing and Communications. I have been buying and selling cars for the better part of the last 20 years. Webuycars.co.za and its selling arm Wesellcars.co.za, sell in excess of 50 vehicles per day.

So, today we are going to jump right into things and try to answer that loaded question of, “What is my car worth?”

People are sensitive about this topic as it has financial implications for them, and most people feel some sort of emotional connection to their cars. Vehicle owners dislike parting with their cars that they have cherished and shared so many experiences with it. On top of that, it is a loaded and emotional issue because people don’t trust second-hand car dealers, who are generally the people who are going to answer this question.

So what is your car worth?

The answer is, it is worth what anyone is prepared to pay for it right now. It is not worth the book value of your car. The so-called “book value” does not buy the car. It is not the worth that your braai buddy is telling you it is worth. He is just all talk and no walk, with no skin in the game and beer in his tummy. No friend of yours is going to tell you blatantly that you have an over-inflated idea of what your car is worth.

So the basic truth is that the car is worth what someone is willing to pay for it right here and now. The insurance does not buy the car from you, they have another vested interest to inflate the car’s value.

(You can bring the premium down by opting for a higher exccess. www.outsurance.co.za) The “Book” does not buy the car either, and “The Book” (So-Called “Blue Book”, Mead and McGrouter in RSA - now Transunion.) has a whole chapter right in the front of it, that explains why it is only a guide to be used and interpreted by professionals, and is by no means binding on anyone.

No, they will all tell you what you want to hear, is it not so?

So the basic truth is that a car is worth what someone unrelated to you is willing to pay for it right here and now. The insurance does not buy the car from you, they have another vested interest to inflate the car’s value. “The Book” does not by the car either, and “The Book” (so-called “Blue Book”, Mead and McGrouter in RSA - now Transunion) has a whole chapter right in the front of the guide, that explains why it is only a guide to be used and how it can be interpreted by professionals. This guide is by no means binding to anyone.

There is a saying in the motor-trade that “The book does not buy the car."

Further, there is no real relation between the settlement value on your finance, and the actual value of the car, just as the insured value is no indication of the real value of the car, or what is termed the replacement value of the car. Those are controversial and industry-specific terminologies.

Also, you have to compare apples with apples, you can’t compare a trade-in offer on your car with a cash offer. Those are two completely different things. With a trade-in offer, you are obliged to buy the car on which you are trading in. There is this thing called an “over-allowance” - they over allow on your car, to write back against the full-price sale and finance of a new car. I advise people to rather sell out of hand, then you have more power to negotiate the next deal, and you can shop and buy wherever you want.

Another important factor to keep in mind is that new cars lose about 20% to 30% of their value in the first year. A car loses a lot of value when you drive it out of the showroom and it becomes a second-hand vehicle there and then.

Keep in mind that dealers do not only value cars and money, they also value time. So they are not only thinking about how much it will sell for, but how long it is going to take and how long is it going to tie up the cash flow of the business. Dealers would rather make a little on a fast mover, than making a lot on a slow unpredictable sale.

This has a lot to do with how many buyers there are at any given moment for this particular kind of deal.

If it is a very popular, economical little city car, that has a wide appeal, it is low on maintenance, low on fuel consumption, high on reliability, and it is a well-known brand name, then it is going to be expensive, as there is a sector of the public that will be interested. In contrast, a BMW 7 series, or Merc S-Class, or such, if it does not have very low mileage on it, it is going to sell at a much lower price than what you think, because there are very few people out there who is going to buy that fuel-guzzler which is heavy on maintenance as well.

Also, most important to keep in mind is that buying and selling transactions are all different in the risk, effort, know-how, and convenience that they entail.

Dealers add a lot of value to the selling transaction in abstract forms that you may not be aware of, and you can’t offer the same to the next buyer in your personal capacity. They offer the peace of mind that their brand and their facility bring to the transaction, as well as their professionally trained staff.  They also offer finance, which you can’t do if you sell personally out of hand.

That is where our claim to fame comes in. Webuycars.co.za offer maximum convenience and utility in the transaction. The client does not have to do anything really, or go anywhere, we go to them, we do everything for them, and their car is sold in a jiffy, without them having to go anywhere. They don’t have to prepare the car, or do roadworthy or AA-Report or any such thing, we do everything for them and offer them the maximum comfort and convenience, while we still pay a reasonably fair price on their vehicle, and more often than not we outperform the dealerships and offer a better price than what they do, even on trade-in.

People trust us because they know us from the hearsay of their friends, they have read our content on consumer forums and on their friends’ Facebook comments. They see our billboards, they hear and see our radio and TV Ads, and tonight they see us on the internet as well.

So the moral of my story is if you need to buy or sell a vehicle, go and have a look at www.webuycars.co.za and www.wesellcars.co.za, and I honestly believe you will be pleasantly surprised.

Remember, it is a free and open market. The potential buyer is absolutely free to offer you whatever amount they see fit. An offer is an offer, and an offer is better than nothing. So what if someone “low-balls” you with far less than what you see as its value, at least then the process has started, at least you have an offer. Now all you need to do is to find a better offer. They are free to offer what they want, and you are free to ask whatever you want, really! If you are too low with your price, people may well stampede you to buy the vehicle, and you could have people on your lawn engaged in a fist-fight over your vehicle. If you ask too much, then the person who eventually buys the car, is going to expect a lot of responsibility and participation from your side, and he/she may come back to you at some stage with small problems and demand that you need to solve them. Also, keep in mind the legal and procedural aspects around ownership, registration, and licensing and accountability for traffic fines and toll-gate bills for your vehicle.

That is that from my side, I hope the advice is helpful to you.

Feel free to phone us on 087 230 0429, or mail us on support@webuycars.co.za

If you need to sell your car, please complete the online application form here - www.webuycars.co.za

If you are looking to buy a car, please visit - www.wesellcars.co.za