What is the open-market value of a car and why should you know it?

What is the open-market value of a car and why should you know it? It is important to know that the open-market value of a car is the amount the owner of a used vehicle can expect to receive when selling it. In fact, in theory, it is no more than the price that car can reach on the market depending on its age, condition or regulations.

Today, many models, especially classics, have a market price considerably higher than their open-market value. One example is the BMW 3 Series from the 1980s to the 2000s. What happens in these cases?

If this amount is applied to insurance compensation, the open-market value of a car is treated as the value of the vehicle at the moment just before a loss occurs. Sometimes this equivalence does not happen, because the owner may insure the vehicle at market price rather than open-market value. To repeat, this usually happens with highly valued classic cars, both by enthusiasts and by manufacturers.

What does the open-market value of a car represent?

First of all, it is essential to mention that the open-market value of a car cannot be the value of a new car. The open-market value takes age into account. There are insurance policies which, depending on the rate chosen, pay the owner the full invoice price of a new car including the accessories covered by the policy. If the model in question has been discontinued, the price of the model that replaced it will be paid.

These payments can be made in cash or through another vehicle, as established by Article 18 of Law 50/1980 on Insurance Contracts.

The replacement value is also important to consider: it is the value of a vehicle with the same characteristics and age as the damaged model. The only difference between replacement value and open-market value is the commercial margin that includes the maintenance carried out on the vehicle before it is resold.

Can the open-market value of a car be improved?

On the market there are numerous vehicle appraisal options in which the expert determines the open-market value of a car, but sometimes a particular company prefers to improve that value. This gives rise to an improved open-market value, which sits somewhere between the open-market value and the replacement value.

To calculate the improved open-market value, reference is taken from publications such as Eurotax or Ganvam. Insurers that use these values add a percentage determined in the insurance policy.

How is the open-market value of a car calculated?

You have surely become curious and feel like calculating the open-market value of the car. As we mentioned earlier, the official amounts set by the Ministry of Finance in tables that are regularly updated must be taken into account. Here are the latest ones.

The list issued by the Ministry of Finance is ordered by make and model and runs to roughly 300 pages.

If, on the other hand, you need a quicker option, you can always use a car open-market value calculator. It takes into account the date of first registration, then the make, model, version, engine, etc. It is important to note that during the first year the value is 100%, when the vehicle is five years old the value is 39%, when it is ten years old the value is 17%, while if the vehicle in question is over 12 years old, its open-market value is 10%.

Furthermore, these percentages apply to registered passenger cars, motorcycles and off-road vehicles. It should be noted that if the vehicle has been used for more than six months as a driving school car, taxi or rental car, the value resulting from the percentage must be reduced by 70%.