Almost three quarters of UK motorists are unable to accurately gauge a used car’s value, according to a recent study.
The survey of 2,000 car buyers, commissioned by leading automotive marketplace CarGurus, found 71% incorrectly identified the current market value of each vehicle, despite 58% of respondents claiming they were confident in assessing what a car is worth.
Participants in the Taking the Guesswork Out study were shown a selection of the five most sought after used vehicles in their respective classes and asked to gauge that car’s value.
Consumers were asked to value the following vehicles, assuming that each vehicle was two years old and had covered 20,000 miles:
- Ford Fiesta – £12,181*
- Nissan Qashqai – £18,524*
- Range Rover Sport – £66,645*
- BMW 320d M Sport – £27,893*
- Nissan Leaf – £19,565*
In total, participants consistently over-estimated the value of the cars. 38% of respondents over-valued the BMW 3 Series by at least £4,000, while a tenth of participants over-valued the Ford Fiesta by at least 25%.
The discrepancy was greatest when it came to the all-electric Nissan Leaf, which respondents over-valued by a whopping 20.3%, adding £3,978 onto the true value of the £19,565 EV – the recommended price given by CarGurus’ Instant Market Value (IMV) tool.
The expertise provided by CarGurus was shown to be particularly of need for the youngest cohort surveyed.
Although 80% of 18-24 year-olds felt confident in their ability to value a car, compared to just 64% of 35-44 year-olds, their confidence was not borne out in the results. The older generation consistently outperformed them by a sizeable margin when it came to accurately valuing the cars in the survey.
The knowledge gap was particularly evident in the case of the BMW 3 Series with just 8% of 18-24s identifying its correct price vs 30% of those aged 35-44. Generation Z didn’t fair any better with the Nissan Leaf, with only 7% choosing correctly, while 22% of 35-44 year olds selected the correct answer.
There was also a significant difference when it came to confidence levels of men and women. Almost three quarters of men (72%) were confident in valuing what a car is worth compared with 46% of women. Yet the gap in actual knowledge was significantly smaller, with men choosing the right answer 28.4% of the time on average, compared with 26.8% for women.
With such a high percentage of car buyers struggling to know if they’re getting a good or bad deal, the IMV tool is the ideal resource to help take the guess work out of car shopping for consumers.
Updated daily using millions of data points, the IMV tool analyses every car currently and recently listed for sale on CarGurus and tells consumers if the model they are considering is either a great, good, fair, high or overpriced deal.
Chris Knapman, Editor at CarGurus UK said: “The UK’s used car market has rebounded strongly following the COVID-19 lockdowns, driven by a combination of pent-up demand, an increased desire for personal mobility, and a global semiconductor shortage that is stifling new car production and therefore driving people to search for used models instead.
“This increased demand means that, compared with a year ago, the average days on market for cars listed on CarGurus has fallen by 18% while prices over the same period are up by 29%.
“With used cars selling faster and for more money, it can be even more difficult for shoppers to accurately value models without the help of third-party tools. That’s where CarGurus’ Instant Market Value tool comes in, using millions of data points and a simple interface to give buyers the knowledge to shop for a car with confidence.”
When it came to which factors buyers said gave them confidence that a car was worth the price being asked, a full service history (57%) topped the list.
Other confidence-inspiring factors included a good warranty (50%) and the opportunity to speak to the dealer in person (35%), although once again respondents placed faith in their own judgement, with the chance to inspect the car in person (37%) trumping an independent report on the car (30%).
Car buyers can put their own knowledge to the test with CarGurus’ Carculator quiz https://www.cargurus.co.uk/Cars/car-valuation
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