Value of Used Cars for Sale
Determining a Used Car's Value
by Gary Wiebke
One Car -- Three Values!
The very same used car can be valued three different ways (loan value, trade-in value and retail value). Not a true measure of the worth of a vehicle, loan value is a lowball estimate of a car's value. Banks and finance companies use it to protect themselves should they need to repossess the vehicle -- the less it's ""worth,"" the easier it is to sell and recover its loan value.
Trade-in value (the price the dealer puts on your car should you trade it in) is higher than loan value, but that's not to say you can't get more for your car if you sell it yourself. Retail value is as much as 50% higher than trade-in value. That's when the dealer freshens up a trade-in and then resells it for a lot more; the only way dealers can do this is to lowball you on the trade-in allowance.
As with new cars, you have a much better chance of getting a fair price when you know what the car is worth. If you can, try to sell your car for as close to full retail value as possible. Likewise, try to buy a used vehicle for at least 10 to 15 percent below retail value.
Find trade-in and retail values free of charge at the Kelley Blue Book Web site (click on Used Car Values). You can select or deselect any option and immediately get a revised price. For trade-in pricing, you can choose fair, good or excellent condition, but retail pricing is provided for excellent condition only. Note that good condition prices typically run 6 to 12 percent below excellent condition prices.
To approximate the retail price for a car in fair or good condition, note how much lower the good or fair condition trade-in allowance is than the excellent condition trade-in allowance. Apply the same percentage markdown to the excellent condition retail price to arrive at the price you want.
Content Courtesy : www.ivillage.com