Used Car Prices What s My Car Worth Myths And Facts
Below is a MRR and PLR article in category Vehicles -> subcategory Trucks-SUVS.
Used Car Prices: What's My Car Worth? Myths and Facts
Summary
Determining the value of a used car is a complex question, even with over 20 years of experience in the automotive industry. Despite the abundance of information available today, car prices and values can still be confusing.Misunderstandings About Car Values
An email conversation between Ted, a dealer, and Rich, a customer, highlights common misconceptions about retail car prices and trade-in values.
Email Exchange
Ted to Rich:
Hi Rich,
Donna loves the 2006 Volvo?"it's a perfect fit! The retail value is $23,800. At Medway Imports, we can offer:
- 2006 Volvo S40 Price: $18,995
- 2001 Chevy Impala Trade-In Value: $4,000
Note: The Volvo is still under its factory warranty with roadside assistance.
Rich to Ted:
Hi Ted,
Thanks for the info. The Volvo is priced well, but isn't my Impala worth $6,000-$7,000? Kelley Blue Book lists a private sale value around $7,995, and ads show a range from $7,000 to $9,000. Adjusting for sale price discounts, I expected $6,000-$7,000.
Ted to Rich:
You're right about the Impala’s "retail value," but it sells for around $4,000. By your logic, the Volvo's price should be $22,800. Realistically, neither car will sell for these "book" values in today’s market.
Rich to Ted:
I could lease an Infiniti for less per month. They’re offering $7,000 for my Impala. Your thoughts?
Ted to Rich:
The $7,000 offer is a "feel good" number. Dealers use it, then inflate the car price. I’d give you $7,000 for your Impala if you pay $22,800 for the Volvo. This trap occurs daily because of misleading retail numbers from guides like blue books.
Website values are subjective and based on averages. Seven sites will give seven different values.
I can find any car you want at a great price, but can only offer $4,000 for the Impala. We don't inflate trade-in values by increasing the sale price, so our offer appears low, but $4,000 is an honest figure.
If you sell it privately for $7,000, you'd need to handle advertising, repairs, and tire replacements.
The value of a car is complex and varies widely. We’re providing a true and fair value for your Impala. You're getting a square deal, even if it doesn't feel like it with the Impala.
Rich to Ted:
If I finance around $14,000 for the Volvo, my monthly payment would be roughly $430/month over three years at 7%. I might lease a 2007 Infiniti for less.
Ted to Rich:
Leasing has benefits, but after three years, the Infiniti’s value to you is $0. The 2006 Volvo's residual value is $9,625. Leasing leaves you with no equity.
Feel free to lease or buy elsewhere. I can ensure a great value for your money. $18,995 for a Volvo priced $4,805 under its low value is fantastic. $4,000 for an Impala needing over $1,000 in reconditioning is a fair price.
You can't buy at wholesale and trade at retail. Interestingly, the current Volvo wholesale price is $19,000-$20,000. I can’t even purchase it for $18,995.
I hope this helps in your decision-making process.
Conclusion
This conversation highlights the gap between perception and reality when it comes to used car prices. Pricing must be contextual; arbitrary values from websites and books often mislead buyers and sellers, fostering distrust and confusion. The auto industry should aim to provide clarity, not add to the confusion.
?"Ted Olson, Medway Imports
Making Sense of Used Car Prices
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