How car buying services calculate an offer
What is actually happening between you typing a registration and a number appearing, including the part of the process the industry would rather you did not think about.
· 5 min read
We are one of these, so read this accordingly. What follows is an accurate description of how the category works, including the parts that do not flatter it and the parts that do not flatter us.
The number is always the same calculation
Every buyer in this market, us included, is doing one sum:
What the car will eventually sell for, minus what it costs to get it there, minus the margin the business needs.
That is it. Everything else is detail about how each of those three terms is estimated.
The first term is the interesting one, because it is where buyers genuinely differ. A buyer who will retail your car themselves is estimating a retail price. A buyer who will send it to auction is estimating a hammer price, which is lower. A buyer with a specific customer waiting is estimating what that customer pays. And a buyer sending it somewhere with different demand — the case we have set out in why UK cars get exported — is estimating a price in that market rather than this one.
Same sum, different first term, different answer. When two offers on your car differ significantly, that is usually why.
Where the inputs come from
Trade valuation data. Subscription services aggregate what cars like yours have actually sold for. This is the starting point for essentially everyone, and it is why offers cluster: most buyers are reading similar numbers.
Auction results. What comparable cars made recently, which is a floor.
The buyer's own stock position. Genuinely underrated. A buyer who already has three of your model is less interested than one who has none. This is why offers vary week to week on the same car, and it is not something you can see or influence.
Your registration. It returns make, model, derivative, year, fuel and often colour. That is enough for a rough number and nowhere near enough for a firm one.
What you tell them. Mileage, condition, history, specification. This is the biggest source of variance and the reason a number given before anyone has spoken to you cannot be reliable.
Why the online figure and the real figure differ
Here is the mechanism, described plainly.
An instant online valuation is generated from your registration and mileage. At that moment the buyer knows the model and roughly the year. They do not know your specification, your service history, whether the interior has been used by children or by nobody, whether there is finance outstanding, or whether the car has a marker on its record.
So the instant number is a guess about a category of car, not a valuation of your car. Some buyers present that guess as an offer.
What happens next depends entirely on the buyer's business model, and this is the fork that matters.
One approach is to publish an attractive guess, get you to commit time and emotional energy, and then adjust when the car is inspected. The adjustment is framed as a discovery about your car. Frequently it is nothing of the sort — it is the difference between an optimistic opening number and a real one, arriving at the moment you are least likely to walk away because you have already driven somewhere and mentally sold the car.
The other approach is to gather enough information first to make a number that does not need adjusting, then hold it.
We use the second one. Our offers stand for seven days and do not change on collection. But you have no reason to believe a company's own website about this, which is why the practical advice below matters more than the assurance.
What to actually ask
Two questions separate the approaches quickly.
"Is that the figure you will pay when you see the car?" Listen for a straight yes. Hedging here is the whole answer.
"What would have to be true for that number to change?" A good buyer has a short, specific list — significantly different mileage, undisclosed damage, undisclosed finance. A buyer whose list is long, vague, or delivered as "it depends on inspection" is telling you the number is provisional.
A third, if you want it: "Where is my car going?" A buyer who knows is a buyer whose number is grounded in something.
Why we ask what we ask
When we call, the questions are not a test and they are not stalling. Each one closes a variable that would otherwise have to be priced pessimistically.
Specification, because on premium cars it moves the number by thousands and most owners underdescribe their own car.
Service history and, on some models, oil change frequency — on the Ingenium diesel in an Evoque that is directly connected to the failure mode buyers price for.
Condition, honestly. Damage described up front is priced in cheaply. Damage discovered later is priced expensively, by whoever discovers it.
Finance, because it changes the mechanics rather than the value.
Every answer you give converts an assumption into a fact, and facts price better than assumptions. That is not a favour we are doing you, it is how we can commit to a figure and keep it.
The margin, stated plainly
We buy your car to sell it again at more than we paid. That gap is the business. Anyone in this category implying they are doing you a favour is being slippery.
What you are buying with that margin is real: no listing, no strangers at your house, no test drives with people you have not met, no payment fraud risk, free collection, and money in your account before the car moves. Whether that is worth the gap is your call, and for some people it genuinely is not. If you have time and patience, a private sale will usually net you more — we said so in our comparison of the three routes and we meant it.
The advice that costs us money
Get at least three offers.
We say this on every article because it is the single thing that most improves a seller's outcome, and it occasionally means we lose a car to somebody who wanted it more that week. That is a reasonable trade. A seller comparing three grounded numbers is a seller who can recognise a good one. A seller with a single number is trusting a stranger.
We would rather compete against other offers than against your uncertainty. On the cars we actually want, we tend to do well in that comparison, and on the cars we do not, you deserve to find the buyer who does.
When you want a number to compare, we will give you a firm one within two hours from a person who trades these cars.
