transparency

TRANSPARENCY. IT’S IN OUR NAME.

One of the questions we get asked most by customers is; ‘How do you set your valuations?’. There’s a perception that it’s some kind of ‘dark art’, but it’s all based on real world observations and data, as well as insight from customers, market feedback and years and years of experience. Plus a little caffeine.

Here we explain just what goes into producing our car valuations, the processes we go through and finally how accurate we are against the market and those who see themselves as our rivals.

Our promise to you

Every month we will publish our latest accuracy figures here regardless of the outcome. We will give complete transparency on exactly how accurate we were the previous month and how that’s changed over time.

You decide

Ultimately, it’s our customers who decide how accurate we are, but we’re confident that you won’t find more precise valuations anywhere else. That’s why you can take a no obligation trial of any of our products or data sets and decide for yourself - contact us to find out more.

FIND OUT HOW WE SET OUR VALUATIONS

What goes into our valuations?

We receive around 120,000 car auction sale observations from The National Association of Motor Auctions (NAMA) every month and roughly 658,000 retail observations from a variety of web portals such as motors.co.uk and AA Cars.

As well as this wealth of data our team of nine Car Editors have in excess of 3,500 meetings with customers, motor trade experts, manufacturers, dealers and auctioneers as well as car rental companies and leasing and contract hire customers. Which might explain the need for all the caffeine.

We’ve also got history, more than 80 years of it in fact, and all the learnings and experience passed on through the generations go into our valuations. Our current Editorial team on their own have over 200 years’ experience in the automotive industry. They might not all qualify as ‘classics’, but they certainly know their stuff.

VALUATION PROCESS

The valuation process

Our valuation process is vital. It demonstrates that we have followed due procedure to verify we have the most accurate and, just as importantly, auditable values in the industry.

The Editorial meeting is the focal point of the process. It’s the forum where the team discusses everything they’ve seen in the market, feedback from customers, auction houses, dealers, fleet managers and more. An agreed valuation policy to apply to the data as a whole is agreed, usually in the form of what the average depreciation percentage should be. We also highlight strong performing sectors, manufacturers or models that are exceptions to the rule and adjust them accordingly.

Every market sector is considered with the same care and attention. This means values from the initial forecasts of pre-production models through to the used values of the oldest cars have been considered by our highly experienced team.

Glass’s uses a valuation tool developed over many years that utilises a primary/secondary model structure. This is the absolute start point of the valuation process. Having the right curve in place to detail the correct rate of depreciation of each primary car (the average spec model) and its secondary cars (all other spec models) is critical. With the right curves in place, we can ensure that every secondary curve maintains a measured and consistent relationship to the appropriate primary curve. Overlaying the previous months' market activity, high quality econometric factors and short term market sentiment results in a comprehensive set of reliable, justifiable high quality market information.

At the end of each valuation period our system produces a report of any anomalies that might appear in the data so that these can be reviewed and corrected 'by hand' before the final values are set.

At any point our Editors can manually make changes to the data and values as necessary. Each month we accurately value over 50,000 models so some automation is required, but human input, judgement and manipulation is vital.

ACCURACY LATEST MONTH

PLEASE NOTE: We are currently developing a new way of reporting our accuracy to provide greater insight and transparency into our valuations, giving you more confidence in the numbers you rely on. This will be live in January 2017.

Accuracy matters

Giving you the full picture

We will always compare ourselves to the market on EVERY vehicle we can. This usually means 60,000 to 80,000 a month.

We will never cherry pick a small section of observations to make us look more favourable; we’d be lying to ourselves and more importantly, you. We have customers specialising in every area of the market so we need to be just as accurate on late plate, low mileage cars as we are on ten year old, high mileage vehicles.

Accuracy matters to us, but it matters more to you.

How do we measure accuracy?

  • 1. Trade observations are received from NAMA and matched to the relevant Glass Code
  • 2. Our standard mileage Glass Trade figure is identified from the same month as the observation
  • 3. The Glass Trade figure is adjusted to the exact mileage figure of the observation
  • 4. Auction hammer price is compared to the mileage adjusted Glass Trade value

We repeat the process with our rivals' equivalent valuations, mileage adjusted using their own methodology, before comparing the two.

We then look at the average overall accuracy figure, which is the trade value as a percentage of the observed auction price – the closer to 100%, the more accurate we are. For example, if we are at 103.8% it means on average we are valuing at 3.8% over the hammer price.

We also compare the trade valuations to the hammer price for each matched observation, to see who was closest to the hammer price for every observation.

On occasion we may be more accurate overall but our rivals will be closer to the hammer price on the same or slightly more observations. What this means is that on the observations where we are not the closest, we are closer to the hammer price than our rivals are when they are not the closest.

Why are we not more accurate?

Our variance in accuracy is affected by ‘surprise’ market movements that cannot be foreseen when producing the data. These can range from a period of exceptionally good weather that keeps buyers away from the forecourt, to a leasing or contract hire company dropping a large number of the same car into the market unexpectedly, impacting desirability, availability and therefore values. In the case of low volume models such as prestige cars, two or three extra cars in the market can make all the difference.

It should always be remembered that our ‘static’ Trade valuations are a guide only and are a UK wide valuation, so there will be regional variations that are not considered in this data set (we have a product called Radar that offers region specific Live Retail Pricing).

Why are we more accurate now than 12-18 months ago?

Because of on-going improvements in the way we analyse data and the way we work with the Editorial team. Our new reporting allows us to clearly identify areas in which the team have drifted from the observations at a level of detail we were unable to previously.

Equally, improvements in data structure and better application of recently revised depreciation curves have also facilitated an improvement in accuracy. A shift to percentage based mileage adjustment across all products has also made an impact.

In addition we have increased the size of the team and they are now spending more time in the market talking to our customers and building an even higher level of understanding of the current and ever shifting market.

ACCURACY PREVIOUS MONTH
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