How to Know When You’re Getting a Fair Deal: FAQs About Valuing Your Vehicle
One of the most endearing aspects of the human race is how diverse and unique we all are. However, there are some ways in which we are unified. Death and taxes are popular examples, of course, but there’s another thing that brings us all together: no one likes to get the bad end of a deal. Compromise is great, and coming out ahead is even better, but no one likes to feel like the loser. That’s why it’s important to know how to value your car.
When the time comes to sell or trade in your vehicle, it is every driver’s strongest desire not to get ripped off. There are many ways to research your model’s value, but how do you know what’s right? And when the time comes to get the appraisal, how do you know whether or not you’re getting a fair offer? We tend to make a lot of assumptions about how model values are calculated and what dealerships are looking for when you bring your car for a trade-in. Here are some frequently asked questions about valuing your model and the process of vehicle trade-ins to help demystify the process and help you feel more comfortable the next time you consider selling or trading in a vehicle.
What Factors Are Included in My Vehicle’s Value?
A lot of the factors included in valuing your vehicle are pretty obvious. If your car, truck, van, or SUV is crawling with rust, obviously dented or dinged, or clearly missing something pretty important, the value is going to drop significantly. The same is true of drivability. The outside of your vehicle can be in pristine, gleaming condition, but if the brakes are spongey and turning a corner requires the help of your front seat passenger, you should not expect an exceptionally high estimate. If your vehicle has a lot of experience – that is to say, plenty of miles on the odometer – that may reduce its value, as well.
That being said, some wear and tear is actually expected in used vehicles, especially those that have been on the roads for over five years. Many inspection reports take into consideration small stains, tiny scratches, or drivability issues that can be easily fixed. However, some of the factors may surprise you. Your location may have a significant impact on the value of your vehicle, especially if you are looking to trade-in at a local dealership. Demand is one very important factor in determining a car’s value, so if you’re driving something unusual or less practical in your region, you might not be in the right market for optimal value.
Additionally, if a dealer already has a flux of this particular make and model, it may not be as appealing to that particular dealer. On the other hand, another dealer might be eager to take that car off your hands so they can meet customer demand. You’re always welcome to get several appraisals of your vehicle from different dealerships.
What’s the Difference Between Trade-In Value and Private Party Value?
When you trade-in a vehicle during the purchase of a new one, the dealer applies the value of your trade-in towards the new car. This value is based on the condition and driveability of your car, as well as its overall desirability. These numbers reflect what the dealer believes they could receive for your trade-in if they were to sell it or put it up for auction. If you have a particularly popular car or one that the dealer feels is in exceptional condition, you might receive a higher amount for your trade-in. Market values are a huge influence on trade-in values, which means these numbers can fluctuate.
You might wonder why this number is so much less than the retail price of the dealer’s inventory. When your dealer invests in your trade-in, they will likely give it a thorough inspection and repair, replace, or restore anything that might impact its value. They’ll have to pay for those parts as well as the technicians who perform the work.
Private party value is what you might expect someone to pay for your car if you were to sell it to another individual. This number is largely based on regional market value and how popular your vehicle is in your area, as well as its overall condition. If you’ve made any major repairs or upgrades to your vehicle, you can expect to see that reflected in the private party value.
However, you’ve probably heard the saying, “something is only worth what someone else will pay for it.” This is very true when it comes to private party sales. You might find someone willing to pay extreme amounts of money for the privilege of owning your specific car…or you might find yourself watching it age in your garage without a buyer.
Why Do I Get a Different Value From My Dealer Than I See Online?
There are plenty of online calculators to help you start the process of valuing your vehicle. These are extremely helpful tools to help you get an idea of a price range you might be offered for your car. It’s important to remember, though, that these online calculators cannot actually see your vehicle in person. They don’t know how the brakes occasionally catch or how the “low tire pressure” light comes on every Tuesday. Your vehicle probably has a few quirks that can’t be captured with an online survey.
When your dealer evaluates your model for a trade-in, they’re looking at a potential investment. They aren’t going to keep your vehicle for their own; instead, they’re looking at what it would take to turn it into a great value for the person who will buy it next. Your trade-in offer is going to be based on what the dealer reasonably thinks he will need to invest in it, as well as how much profit he can make on it going forward. This value is then passed down to you in the form of a discount on the new vehicle you hope to purchase.
How Can I Get a Better Price for My Vehicle?
You can’t necessarily restrict how many miles you put on your car. After all, you bought your car to drive, not for the resale value – though choosing a car with a high resale value is a great way to increase your trade-in value. Still, make sure you keep up with all required regular maintenance. Today’s vehicles are designed for longer lives, which means high mileage isn’t necessarily a bad thing, as long as all of the parts are up to date and working well.
It could be argued that you can’t always keep your car ding, scratch, and stain-free, especially if you plan on driving it frequently. However, when you choose to trade in your vehicle, preserve its value by getting it fully cleaned and detailed before you bring it in for appraisal. Yes, this means paying more money for a car you don’t want anymore, but it can make a significant difference in the value you receive for your trade-in, especially if most of the problems were simply cosmetic, to begin with. This includes the glass, as well. If there are any cracks or chips, have them fixed or the window replaced before taking your car in to be valued. Again, consider it an investment in your trade in value.
Valuing Your Vehicle at a Glance
Unfortunately, there is no solid, one-time value set for each and every vehicle out there. In fact, you might receive a variety of different offers based on where you are located, which dealership you work with, and what vehicles are popular at that exact moment. Market trends deeply impact vehicle values.
Also, keep in mind that the trade-in value will take into consideration the price of the vehicle you’re looking to purchase, balanced with the anticipated profit margin of your current car. Your dealer may need to put a little or a lot of work into your trade so that they can make a reasonable profit on it. You can help them with this process by taking good care of your car. A little wear and tear is expected, but you might need to invest a little money to bring your car to as near to mint condition as possible.
It’s important to understand the value of your vehicle so that you can receive the best value possible. Remember there are many factors that impact this number, and do plenty of research to make sure you’re getting a fair deal.