Determining the retail value of your used car is not a simple process, and it is important to understand how retail value differs from private-party or trade-in value. The retail value is how much an individual can expect to pay through a used-car dealership, and this is higher than the price for a private party or the value a dealership would pay for the car as a trade-in.
How to Value Your Used Car
There are lots of factors that affect a used car’s retail value. Naturally, certain makes and models are worth more than others. Also, the retail value is higher when a car has more bells and whistles to set it apart from the standard stock version.
Step 1: Get a checkup from a qualified mechanic. While you may know about certain issues beneath the hood or damage to your used vehicle, there may be problems of which you are unaware.
Such issues can affect your car’s retail value. Many private mechanics will look over a car for free or for a small fee, and dealerships offer this service for a nominal fee as well.
Step 2: Gather your used car’s identifying information. To determine retail value, you will need an array of information: The registration or title of your car, the make, model and year, and any other appropriate data, such as engine size. Also, record your car’s odometer reading.
Step 3: Take an objective look at your car’s cosmetic condition. It’s easy to overlook faults on a car with which you have a bond. Take off your rose-colored glasses and critically scan the exterior and interior for damage. This can include tears in the upholstery, cracks in glass, or dings in the body.
Step 4: Turn to a used-car price guide for reference. While there are printed versions of used-car price guides published each year, it is simpler and cheaper to refer to a guide online, such as Kelley Blue Book. On the Kelley Blue Book website, click the “My Car’s Value” button to begin the valuation process. From there, select the year, make, and model from the drop-down menus, input your car’s mileage, and click “Next.”
Continue in this manner, selecting the appropriate description for your car for each field, and the final screen will display options to view trade-in value and private-party value. Take note of the private-party value of your car.
Step 5: Add 20% to the private-party value of your car. Dealerships put in a certain amount of work in preparing used cars for resale, and there is labor involved as well.
These are the most-cited reasons for retail value being higher than private-party value. To add 20% and determine your used car’s retail price, take the private-party value of your car and multiply that by 0.2. Then add that number to the private-party value of your car to get the retail value.
If you are looking to sell or are just curious about the retail value of your used car, this is a relatively straightforward way to come to a final figure. Be aware, however, that there is no guarantee your car will actually sell for that price through a dealership. There are numerous factors that may result in a lower retail price, such as a poor economy or a glut of supply on the market.