26/09/2007

Valuation required for BMW with replacement engine

I own a 04 BMW 320d SE and have recently had to have a new engine installed (fitted by a BMW dealership) after 43000 miles - is there any way the website could provide me with...

...the before and after values?

Hi Stuart,

There is no way our system can work out what any car is worth with a new engine. As you say, the mileage tables will not correlate, but then this is only one issue.

The real world increase to the current value will be a percentage of the total cost of the new engine, up to a point beyond which a buyer would not consider your car against a newer one with no previous issues which have required complete engine replacement.

I am not aware of anyone who could give you a definitive answer in this instance, but you could do worse than ask your local BMW dealer what they feel is the likely premium (if any) for a car presented in this condition.

Sincerely,

John Glynn

John,

Thank you for taking the time to reply to me.

The initial reason for the question was that I have recently suffered the misfortune of my car swallowing too much water through the air intake, and therefore need a replacement engine, turbo, intercooler, and inlet manifold.

My insurance company have accepted the claim but insist that I must pay £1000 towards the cost as I will be financially better off as a result of fitting new parts. I have asked the insurance company to quantify this but they cannot, as I do not see my vehicle gaining a £1000 in value - if I did there would be no problem.

It clearly is a difficult situation with regards to the valuation, but if I was buying a car I would compare specs and age together with mileage, and would probably steer well clear of a car on at a premium due to having a replacement engine, because no matter what I say when I come to sell the car there will always be a doubt on the extent of water damage. This in turn would lessen the value of my car if anything.

Hi Stuart,

There is a net gain in having an engine fitted, that is a given. Whether it is precisely quantifiable in pound note terms is debateable, but on an 04 car I would say £1000 is in the right ball park.

The problem when you come to trade in is what the dealer would pay for an 04 with a new engine versus an 05 with the original engine, and the 05 will probably make more money in real terms, so the dealer wil pay more for it. Selling privately, the 04 car will fetch more money, as it appeal to a cost-conscious buyer on the basis of having had a huge bill for all new motor and ancillaries, so someone out there will go for that over a later car with bills coming up.

Will it ultimately return you a grand extra? Probably not. But then if the insurance company were being serious hard ballers they could say that you actually vandalised your car by driving it through a huge puddle of muddy water (I am not saying you did that) so is it worth a grand to have the car back up to speed, probably yes.

One way to tackle the issue would be to ask the insurers what the Financial Ombudsmans Service have to say on the subject of perceived benefits in such cases and whether there were any precedents set at the time of the last floods. Make the point that, if charged £1000 for an undefinable benefit, you reserve the right to appeal their decision to the FOS. That is the direction I would go in, supported by a letter from a BMW dealer or two saying there would be no increase in trade in allowance based on a new engine (if that is indeed their position).

Cheers,

John
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