What’s my car worth? That is the question that comes to mind when you begin contemplating selling your used car. You can try different approaches when thinking about secondhand prices. There is a popular opinion that the object is worth exactly the amount that someone is prepared to pay for it. If you plan to rely on this idea, you’d better be a good haggler. For two parties to meet in the middle, a lot of talking and bargaining must be done. This method is preferred in Arabic bazaar where prices differ with each customer. It’s less popular in Western culture.
There is another approach. One more popular in the US of A and all the Western world. The idea is that the market sets the price. So, you look at the market average and start from there. Use market average only as a reference, because every used car is different. Mileage, maintenance regularity, driving style, city or road car. Those factors influence the performance of the car. That’s why the same model and same year used cars can have very different prices.
How to Find the Value of Your Car?
Car value is a tricky thing when you try to find it yourself. And a very easy thing to calculate on the internet. Two of the most popular places are KBB (Kelley Blue Book) and Edmunds. Those two have many decades of experience and are trusted by dealers and consumers. Both are free.
Just provide some information about your used car and KBB or Edmunds will calculate the value of your vehicle. Both companies provide huge help when buying or selling a used car. Both are respected in the market, well known, and can help in negotiating the price. Great thing is that value is calculated combining average market value and specifics on a concrete car.
If you use both (and it is suggested to use both), you can see that most cases KBB and Edmunds will calculate a different value. Same car, same parameters but different value. Buyers and sellers use the same tools, so you’d better know why values differ. And have some arguments to defend the value which suits you best.
One more argument that can help to bargain is a valid car history report. With a history report, the buyer will be certain that car value was calculated correctly. And good history always increases the price. You can easily get the report from sites like carVertical or CARFAX.
KBB: Strong Points and What It’s Best For
Kelley Blue Books is an older company. It was established in 1926 in California. Les Kelley, a founder of the company, was an ambitious car salesman at a time. He started documenting used car prices. At first, Kelley employed it at his job, evaluating a used car that he bought or sold. When his archive expanded, Kelley began to see some business opportunities. What’s my car worth? Was even more valid question back then. Both, dealers and ordinary consumers needed professional help with evaluating used cars.
KBB car value is calculated using a complex formula. Those are parameters that have significant weight:
- Overall condition of the car.
- The popularity of the car in the market.
- Warranty and its condition.
- Local market and situation there.
When KBB calculates the value, they use an algorithm that combines information about your car and general data from the market. On the same website, you can compare the value of your car with values at various dealerships and other sellers. KBB gathers information from all states and you can easily compare prices in different states.
KBB Trade-in value of the car can also be calculated on the same website. When finding trade-in value, KBB uses the same method and parameters.
Usually, KBB shows a higher price than Edmunds. So, keep it in mind.
Edmunds: Strong Points and What It’s Best For
Edmunds was founded in 1966. Ludwig Arons, a founder of the company, named it Edmunds Publications. They published booklets consolidating automotive specifications and helped car buyers to make educated decisions.
The company grew in popularity and attracted investors. In 1988 Ludwig sold the company to Peter Steinlauf. With Peter and the rise of the internet, Edmunds grew even more and became one of the top choices for dealers and consumers. In 2000 the company introduced TMV (True Market Value). A service to calculate a used car’s value.
Edmunds car value is calculated considering many factors:
- The invoice price of the car.
- Manufacturer’s suggested retail price.
- Supply and demand of that specific model.
- Data from real transactions all around the country.
- Car brand’s popularity and reputation.
- Dealers and manufacturers advertising expenses (1-3 percent of the TMV).
- Incentives that dealers get from manufacturers (it can lower the car’s TMV).
What’s my car worth is an easy question with Edmunds. It’s one of the most popular and respected companies in this business.
Terms to Know When Selling or Buying a Car
- MSRP (Manufacturers Suggested Retail Price). As the name implies, manufacturers suggest prices to dealers to sell their vehicles at. It goes only with new cars. And even then, dealers have their calculations that inflate the price.
- Invoice Price. This is the price that the dealer pays to the manufacturer. It is also called the dealer’s cost. Again, usually, this goes only with new cars.
- Transaction Price. This is the final selling price that includes all fees. Taxes are calculated separately and are not included in the transaction price. This price works with both, new and used vehicles.
- Wholesale Price. That’s the price that a dealer pays when buys used cars. It is not very likely that you’ll be able to get a car at its wholesale price. Only desperate dealers sell without any profit at all.
- Trade-in Value. This price you get as an offer from a dealer when giving up your old car and buying a new one. Trade-in value will always be lower than the money that you can get selling to a private buyer.