A Financial Advisor’s Guide to Assessing Vehicle Value for Clients

For those responsible for finding the company vehicles for their business or individual needs, you must be making the right financial choice for the organization and/or themselves.

Assessing the vehicle’s value for a client is done so with the use of reliable data sources, considering the client’s unique financial context and key depreciation factors. 

In this guide, we’ll look at how financial advisors can assess vehicle value for clients to make the right choice.

Top tips and resources for valuation

To begin, let’s take a look at what tips and resources are available for valuation.

Online valuation tools

These should be the baseline when it comes to finding out about the value of vehicles in both the automotive and insurance industries.

There are some great resources available online that provide estimated market trade-in and private party values, which can also contribute well to accurate valuation.

Edmunds in the USA and Auto Trader in the UK are two popular resources to benefit from. When it comes to nearly new electric cars, the newer they are, the more value they’re likely to have.

Market research

It’s good to take a look at the market and do research on what is best for your clients. Advising clients to compare their vehicle to similar cars is helpful. Look for cars that are advertised for sale in local areas on classified ad websites.

This also helps to gauge real-world demand, as well as actual selling prices, too.

Professional appraisals

For high-value vehicles that are classic or highly modified, a certified professional appraisal is required and necessary to help capture unique features, as well as an accurate value.

This can be useful for insurance policies or tax purposes, too.

What factors can influence vehicle value?

Several factors can impact a car’s value and, therefore, should be honestly assessed. These include:

Age and mileage

A new vehicle will often depreciate significantly within its first few years of being out on the road. A higher mileage will also indicate more wear and tear, which can also reduce its value.

Condition and maintenance history

A well-maintained car has a complete service history and minimal cosmetic or mechanical damage. All of the above can therefore command a higher price. A lack of records of visible issues will lower the valuation and should be approached with caution.

Make, model, and demand

Popular models from reliable manufacturers will tend to retain value a lot better. With that being said, it’s worth considering market demand, seasonality, and even the car’s color, as all of the above can influence its worth. 

Features and modifications

There are several features and modifications that can add value. Aftermarket modifications, though, can be a mixed bag, especially if they’re more for a niche market. Other changes reduce value to the average buyer, so it’s important to be aware of any modifications or features that are added or changed. 

It’s important to consider all of the above when it comes to assessing a vehicle’s value.