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When it comes time to sell your car, you want to make sure you’re getting the best price possible.
As the market has become more competitive in recent years, it can be difficult to decide whether you should turn in a problem vehicle and take the hit or pay to have it repaired in hopes of getting a much better price.
This includes repairing scratches and dents, replacing consumable parts, and in this case, fixing a problem that has caused a warning light to come on.
A professional vehicle valuer from one of the largest second-hand car dealers has told us why illuminated warning lights on your dashboard can cost you £500 in undercutting when you want to trade in.
Damaged paint, a spotty service history and high mileage are all factors that can affect the value of your car. And a dealer will typically reduce the amount they offer you if the vehicle has warning lights on the dashboard – but by how much?
More than 7.2 million used engines changed hands last year, an increase of 5.1 percent on 2022, meaning buyers have more choice than before.
This means that factors like high mileage, a spotty service history, and damaged paint can all affect the value of the vehicle you’re trying to sell, meaning you’ll have less money to invest in a new one.
And having a warning light on your dashboard will also devalue the price of your car.
This is because they usually indicate underlying problems and lead dealers to perceive that your vehicle is more risky and will require work to be carried out before it can be put up for sale.
However, some of the repairs required to disable these warning lights can be costly.
This means that sellers need to ask themselves when it makes financial sense to fix the problem, rather than ignoring it and taking the financial hit when the dealer offers them a price.
Owen Gregory is a professional vehicle valuer at used car retailer Big Motoring World. He says there are three warning lights that will reduce the value of your vehicle by up to £500.
Owen Gregory, professional vehicle valuer at used car retailer Big Motoring World, explains: ‘When you bring your engine to us for trade-in, we want to know how well it has been looked after because it directly affects how easy it will be for us to sell it on.
‘If you bring us a car with a warning light on, that’s kind of an indication of its general condition. It tells us that there might be a problem and that could hinder our ability to sell it quickly.
‘Don’t panic if you see a warning light, as it doesn’t necessarily indicate a major problem.
‘They are more common than one might think and may require a simple solution to a minor problem that is relatively inexpensive to do.
‘Getting the problem sorted before you try to trade in your vehicle can make your car more attractive, so it’s definitely worth looking into.’
The severity of a warning light on your car dashboard is based on the color of the symbols.
Red indicates a problem that needs to be addressed, such as a battery failure or low oil pressure, which should be checked immediately.
Orange or yellow lights indicate a problem that needs to be resolved but may not be as urgent as a red symbol.
According to Owen, there are three warning lights you should look out for before taking your car to a dealership to ensure your vehicle’s value isn’t massively affected:
1. Engine management warning light
Typical reduced trade-in price: £500
If there is an engine management warning light on the dashboard of a car you are selling, then expect a dealer to lower their offer to buy it from you.
There are two types of engine management lights you need to pay attention to.
Owen says: ‘The engine management light can refer to a number of faults, such as problems with the ignition system, faulty sensors or an engine misfire, as well as larger problems such as the clutch or catalytic converter.
‘A red light indicates that there is a serious problem and the vehicle is not safe to drive. The amber light represents a less serious problem that should not affect your ability to drive the vehicle, but either way, both should be addressed.
‘Obviously, this is a wide range of potential problems, so it’s best to contact a qualified mechanic for an accurate diagnosis. They’ll be able to reset the light once the problem has been fixed.’
Owen says a valuer would typically deduct around £500 from the offer for a car with one of these warning lights on, although he added that it would also depend on factors such as the make and model of the car.
‘The bottom line is that a car with an engine management light will fail an MOT and is therefore a red flag for dealers, so getting this sorted before you take it to a dealer will make the car more desirable, which means more money for you.’
With cars, there’s always the fear that a problem involving an engine management warning light coming on could cost hundreds of pounds to repair, but it could also have been triggered by something as minor as a loose fuel cap or problems with the spark plugs.
Replacing the latter can cost on average £150, but the loss in value from not fixing it is likely to be much greater.
2. ABS warning light
Typical reduced trade-in price: £500
An ABS warning light could be triggered by something as minor as a faulty sensor. Getting it sorted before you trade in your vehicle can pay off.
Another common light that can affect the trade-in price is the anti-lock braking system light.
Owen explains: ‘If we see the ABS light on when we carry out an appraisal, we will deduct at least £500 from the trade-in price.
“As this is a computer-controlled system, the fault could be something as minor as a sensor needing replacement, which would cost no more than £500.”
He added: “It’s important to check this before taking the car to a dealer because the light indicates a problem and is very unpleasant.”
The good news is that an ABS warning light could be caused by a problem as minor as a faulty sensor. Repairing this usually costs around £70 on average.
However, putting in a relatively small amount up front will increase the attractiveness of your car and the final payment you’ll get when you sell it.
3. Service light
Typical reduced trade-in price: £200
The service warning light should be activated within one month or 1,000 miles. Prices may vary depending on whether it is a full or longer service interval.
According to Owen, there is no need to be alarmed if the service light comes on because it is simply an alert to remind owners when their car needs to be booked in.
Typically, services are required within 12 months or 12,000 miles, whichever comes first. However, this can vary depending on the make and model of the car.
If the car you’re selling is still under warranty, then you’ll need to adhere to the recommended service intervals within a month or 1,000 miles to ensure the warranty remains valid for the next owner, so this will also influence the decision whether you should pay for a service yourself or take the hit when you take it to a dealer.
“Regular servicing helps keep your car running smoothly and efficiently and prevents breakdowns due to worn parts by replacing them. If we see a car with the service light on, it motivates us to reduce the trade-in price, usually by around £200,” says Owen.
‘When dealers, or anyone else, are looking to buy a car, it’s important that they can see that the car has been regularly maintained, so it’s best to book a service if the light comes on if you’re thinking of selling.’
A ‘full’ service typically costs between £170 and £400, depending on the size of the car and requirements. However, a ‘major’ service, which includes additional checks and replacement parts, can be much more expensive.
A dealer will take this into account when offering you a reduced amount for a car you trade in with a service light on.
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