The thorny issue of value

[SixasStandard]

Hello All,

Now this is a difficult one...…..and I realise that as a 'Newbie' I run the risk of rubbing some people up the wrong way by raising it......but who is it exactly that sets the values of cars when the phrase 'valued at xx' (where 'xx' appears to be some totally unrealistic figure) is quoted in so many online adverts? I'm currently looking for a 2 Litre Vitesse Saloon, which albeit a lovely vehicle (hence me wanting one) is not what I would consider a particularly exotic vehicle...…...and yet I'm seeing ads asking for 12k to 13k...…..or else cars pitched slightly lower but quoting this as their 'valued at' price. When I look on the Practical Classics Price Guide it gives the Concours or Dealer price of these cars at 7.5K...….with Condition 1 significantly lower...…..so there just seems to be a disconnect somewhere, or am I missing something?

Classic Cars are not an investment...…..not at our level anyway...….so I can only assume that these peoples' estimates of their car's worth is somehow related to how much they've spent to restore and improve them...…….not what the market says they're actually worth. Are cars actually selling at these values?...…...or do they just sit around on the classifieds ad-infinitum?

Like I said...….I've no desire to upset anyone, I just want to understand where these (what I consider) inflated prices are coming from.

Regards,

Ian

[Clive]

The Club does valuations for insurance. And their guide is probably on the website.

However, I have always worked on the rule of thumb that the selling value is about 2/3rd insurance value. 

(we have a mk3 spit with a club valuation of 18K, and it needs to be sold. I expect it to fetch about 12K)

There will always be somebody daft enough to buy an overpriced car in a dealership. Eventually. Otherwise, yes, cars do just sit there unsold.

[Guest]

Hello Ian,

As Clive has mentioned, a lot of folk believe that a car valued for insurance purposes is the actual selling value of their car - you and I have certainly seen this with Alpines. A belief that is wrongly held and continues to cause issue.

Further more when a potential seller scans the adverts and sees their same vehicle being sold at a high price they immediately think their car must fit that criteria as well. Big responsibility has to lay at the feet of commercial sales, they price high and so "Little Tommy" decides to pitch their car accordingly and so the price jam begins. Nothing being sold and no new owners, this is a case in the extreme but the principle is correct.

Sellers fear that if they pitch their car too low then they are giving it away, rather than taking a broader view and understanding the condition of their vehicle related to cost. The old adage that nobody will give you more than you are asking, is very true with classic car sales.

Online adverts, auctions and the like fuel this fire and every owner believes their car is just that little bit better then the one they have seen advertised.

You are more likely to get a better deal with a private trader than via commercial sales - especially with classic cars.

It's not a healthy situation that's for certain.

Regards.

Richard.

[JohnD]

The used car market has to be an example of pure capitalism, red in tooth and nail.        The 'value' of a used car is exactly what someone else will pay for it, no more, no less.     There is no influence from governments or banks, no taxes to pay, nothing except The Market.    And that is the answer for Ian - there is no one who sets prices, just the next customer's keenness to buy, and the owner's anxiety to sell.

John

[Paul H]

I would say Practical Classics is way off the mark and the 2/3 value of TSSC insurance value is a more accurate valuation . My mk2 vitesse saloon has s TSSC insurance value of 10k and my market value estimate is £6500 . You will see lots of adverts with sellers trying to achieve the insurance value

Paul 

[SixasStandard]

Thanks Chaps,

That's cleared that one up. I feel better informed by the day!

Ian

 

[Nick Jones]

Mostly the higher priced ones are traders, who have often recently bought the cars for several thousand less from a private seller and done little to justify the mark-up.

Presumably they do sell or they wouldn’t be doing it, though I really hope the actual selling price gets knocked down a bit!

i would have thought that £ 7.5k Would buy an absolutely top end Vitesse saloon - or have prices gone up due to rarity with so many having gone convertible?

Nick

 

[Colin Lindsay]

3 hours ago, Paul H said:

I would say Practical Classics is way off the mark and the 2/3 value of TSSC insurance value is a more accurate valuation . My mk2 vitesse saloon has s TSSC insurance value of 10k and my market value estimate is £6500 . You will see lots of adverts with sellers trying to achieve the insurance value

Paul 

I'm actually the other extreme, I tend to undervalue cars. When I (only half-jokingly) offered my Mk1 GT6 to someone in March 2018 for £7500 he told me I was indeed joking; in all honesty I'd have taken £5000...  I put in a new valuation and it's now Insurance valued at £18000, yet I still reckon that, despite it winning trophies and looking great, I wouldn't have asked more than about £10,000. A Mk2 sold locally for £14000 recently. It's just hard to appreciate how much prices have risen.

[dougbgt6]

Rule of capitalism number 1

A thing is worth what you can get for it.

db