Knowing the value of a used car is imperative for consumers who wish to sell their vehicles or trade them min as a down payment toward a new car purchase.
Factors That Affect Used Car Values
A car’s mileage is important when estimating its value. The average consumer puts 12,000 miles per year on his or her vehicle. Because of this, this is the scale used to determine the actual age of a car. If a car is two years old but has 48,000 miles, the car is mechanically four years old.
The more miles a used car has, the lower its value, but a used car with a lower than average mileage can be sold for a higher than average price. The area a consumer lives in can also determine the resale value of his or her used vehicle.
Other factors used to determine the value of a used car are:
- Interior damage
- Exterior damage such as scratches, nicks, and dents
- Past mechanical problems
- Dealer upgrades
A consumer that is able to provide receipts proving that the car has had regular maintenance can expect a higher estimated value.
Trade In Value Vs. Retail Value
The retail value of a used car is what it is actually worth and what an individual could expect to pay for it if it were purchased from a dealership. The trade in value of a used car is what a dealer is willing to pay the consumer for the vehicle if the car is being traded to a dealership in lieu of a cash down payment. The trade in value will always be less than the retail value.
Trade in values will also be affected by how “in demand” a consumer’s used car is. If a dealer knows he can sell the car quickly or his stock in a particular make and model is low, he may be apt to offer the consumer more than a dealer who already has several identical used cars on his lot.
Individuals hoping to get top dollar for their used vehicles, however, are much better off selling them to other consumers either through a local newspaper or online and using the proceeds to make a down payment on a new car.
Estimating a Used Car’s Value
Websites such as the Kelley Blue Book and Edmunds offer calculators to assist consumers in accurately estimating a used car’s resale value. Keep in mind that the values obtained through these sites are just estimates. The true value of a used car depends on its condition, location, and history.
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