The value of a used car can vary considerably, depending on the market and geographical location of the car in question. Many resources exist to help the consumer determine a fair price for a used car when buying or selling, but unfortunately even these resources offer only a guide.
Types
Used car values come in a variety of types, even for the exact same automobile.
Retail value is the value placed on a car being sold at a dealership.
Trade-in value is the baseline value assigned to the same car should it be offered as a trade-in towards another car. The trade-in value assumes some work will need to be performed on the car and allows for the retailer to make a profit.
Private sale value is the value of the car if it is sold to another individual. The private sale value tends to be somewhere between the trade-in value and the retail value.
Significance
Used car values take several factors into consideration. Among the most important is the mileage on the used car. Also taken into consideration are any options the car has, such as power steering, leather seats, and aftermarket or premium wheels. The car's condition is also considered when establishing a value. If you have all of this information, it is relatively simple to establish a used car value with Internet research or publications such as "Kelley Blue Book."
Geography
The climate and environment where the car was used impacts its condition. A car from a salt air environment such as coastal California, or a car used in an area where road salting is frequent performed may be more prone to rust. A car from hot, dry areas of the country may have fewer problems with rust, but the paint may be damaged from heat and sunlight if the car has not been consistently garaged. Some cars are simply more popular in certain areas, which makes research critical. Occasionally, selling a car in a different state can increase its value enough to warrant the trip.
Considerations
Used car value is not a exact science. Often, the actual value of the car is a matter of what the market will bear and has little to do with the quality or condition of the car. A 1967 Chevrolet Camaro, for example, has a relatively high value even though another car of the same year may be worth little. Keep in mind that when a car is offered for trade-in, you can expect to receive the lowest reasonable value for the car. The dealership must clean the car, repair damaged or worn parts as necessary, and then sell the car for a profit. Whenever possible, sell the used car to an individual and take the cash to the dealership rather than trading in the car.
Warning
Many used car dealers are less interested in selling cars than they are in selling car loans. Used car financing allows many dealerships to sell cars at a loss but still earn a profit from interest and financing fees. When buying a used car, pay cash or consider borrowing the money on a large equity item such as a house or other real estate. Many used car dealers avoid disclosing the actual sale price of a car until the final stages of the deal.
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