The motor trade use a variety of methods to arrive at car valuations, two of them being The Glasses Guide and Cap’s Black Book. Although, as any car dealer will say, they are only a guide to a cars value, they are both integral parts of the everyday workings of the car business. Today however the guides have seemingly parted company with each other in terms of agreement on the values of many cars. In the last few months events have taken everybody by surprise but in reality what we have seen has been more of a correction from the freefall in values which occurred in the last few months of 2008. Glasses’ has been more reluctant to chase the market whilst Cap has now, according to many commentators, gone too far the other way.
The auctions and many re-marketing and leasing companies traditionally value their stock by “Cap average” which is more mileage and condition specific, whereas many franchised and independent dealers value by way of Glasses’. The interesting and slightly confusing thing, however, is the dealers valuing wholesale and customer part-exchanges are unsure whether the massive profit gains they have achieved at auction on their non-retailable trade-ins will continue at current levels.
Usually if a Ford garage is presented with a Vauxhall part-exchange they would ask a franchised dealer to underwrite the value of that car in order to complete the sale. In the past they may have said ‘’it books at x what would you give for it?” Now though more dealers, when obtaining intercompany values, are likely to say ‘it Caps at x’’ knowing that in some cases it could be valued at £2,000 more than Glasses’.
Until the business settles down used car values will be very subjective and could vary hugely from dealer to dealer, and from a customer’s point of view when searching on-line for a used car, do not be surprised to see a potentially large swing in asking prices between seemingly similar age, mileage and specified cars.
It may also be rather advantageous to ask your dealer how they intend to value your current car because if it is Glasses guide it could be worth much less than if it’s Cap!
Many dealers have decided to take the two and split the difference.