How to Determine the True Value of a Second-Hand Car

Used Car Value

For some car owners, estimating the actual value of a vehicle can be easy. But of course, it’s not an exact science. There are several factors that you need to consider when finding out the price of a second hand car. These factors include mileage, present condition, make, service history, reports on possible accidents, model, and the trend for the specific unit in the market at the moment. You must understand that potential buyers use various tools to effectively determine a fair value of a used car that they intend to buy. To start off, you can make comparisons of cars that appear similar to your potential purchase. You can refer to car classified online sites, they are usually the most reliable sources for getting a reasonable secondhand car value.

Checking on Classified Ads For Cars

http://www.dreamstime.com/royalty-free-stock-photo-classified-ad-image24513075But you shouldn’t stop on classified pages, they may be reliable since more people refer to them but most of the time, they are not accurate when it comes to actual value estimates. And you’ll have no way to find out if the car that you’re planning to buy is a good bargain or a lemon, except if you meet up with the seller to see the car for yourself. Another good source are car valuation online services. There are websites that don’t charge on the first report so get moving and find them. These reliable websites refer to the Auto Dealers’ Guide to come up with an accurate value for any used car. Buyers and sellers are not the only ones who make use of car valuation sites. Insurance brokers and car dealers also look up to them as a guide as well. Car valuation guides also assess the overall condition and mileage of the car that you’re planning to purchase.

Basically, a valuation report provides you with trade and retail price ranges of a car, this way, you can juggle choices and come up with a reasonable market value. The following terms are frequently used in the automobile industry and business, especially in selling used cars. You may want to keep them handy:

Trade price – otherwise known as book value, this term refers to the average price of your vehicle if a secondhand dealer would buy it. The trade price depends on the condition of the car, it may be less if the vehicle need tire replacement or body work servicing. If you sell your car privately, for instance, a friend, trade price is defined as the lowest estimated value of a secondhand car.

Retail price – this refers to the value of the car if you get it from a showroom floor or a well-known car dealer. It also refers to the highest possible valuation of a secondhand vehicle

Market value – this is the resulting average price between the retail and trade prices. Market value is usually utilized by insurance companies. Here is an easy formula for determining the market value of a used car:

MV (market value) = (trade value + retail value) / 2

Bear in mind that whatever market value you could come up with after this calculation, it will serve as a starting point for determining the reasonable value of any used car that you are planning to buy. To sum it all up, the trade price indicates a car’s value’s low point when it is sold in a dealership. Retail price on the other hand establishes the highest point of your car’s potential value.

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