| If you are in the market to buy or sell a used vehicle, | | | | method by which buyers or sellers can somewhat |
| you may be wondering about how the value of | | | | accurately determine the value of a vehicle as |
| pre-owned cars is determined. It is easy to figure out | | | | pertinent to his/her own perspective. |
| what sorts of characteristics add to the value of a | | | | Step 1 - Appraising the Vehicle |
| used car - low mileage, strong engine, straight body | | | | Prepare to conduct your own used car appraisal. |
| among others. When it comes to actually figuring out | | | | Collect information about the car such as Make, |
| how much should be charged or paid for any given | | | | Model, Year, Options, etc. Get the VIN number from |
| used car is a bit more complicated. Because the value | | | | the car and run a CARFAX report to research the |
| of two seemingly similar used vehicles can vary | | | | car's history. This will ensure you don't get stuck with |
| greatly in age, condition, options and more, used | | | | a lemon that's had major damage or a car that was |
| vehicles must be valued on an individual basis. | | | | ruined in a flood. |
| Price Levels Based on Sales Format | | | | After you've got all the basics down, it is time to |
| The value (i.e. price paid) for a used car will be | | | | evaluate the condition of the car. A used car can be |
| different depending on whether the car is being sold | | | | rated as: |
| by an auto dealer or being sold by a private party. | | | | - Excellent - pretty much still in new condition |
| The value will be altogether different if you are | | | | - Good - Only minor mechanical/electrical problems |
| considering using a used auto as a trade-in on a | | | | and very little wear |
| newer model. | | | | - Fair - Car may have mechanical problems, but |
| The value a private party can expect to be paid on | | | | engine runs; interior and exterior may show significant |
| any given used vehicle is generally considered a | | | | wear |
| baseline value. Retail value, or what you can expect | | | | - Poor - Car may have severe mechanical problems, |
| to pay for a used car at a dealership can be up to | | | | exterior will have damage and rust |
| 20% higher than private party value. Trade-in value, | | | | Step 2 - Market Research |
| on the other hand, is typically about 20% lower than | | | | Once you have a good idea of the car's options, |
| private party value. | | | | history and condition, it's time to figure out it's value. |
| Valuing the Vehicle | | | | Start by researching the value on Web sites such as |
| Simply put, used cars are valued based on their | | | | Kelly Blue Book or NADA. After doing so, look for |
| specific characteristics (including all aspects of the | | | | similar vehicles that are for sale in your local area and |
| condition) and the local and national used auto | | | | compare the prices. If you can get 2 or 3 different |
| market. As aforementioned, because each used | | | | prices for roughly the same used car, you can take |
| automobile is unique and has it's own value, there are | | | | the average of the prices to come up with a |
| no hard and fast rules about the value of any given | | | | relatively fair market value. |
| make or model. On the other hand, there is a | | | | |