5 Things to Look for When Finding Used Cars Worth
Have you ever gotten ready to sell a used car only to struggle over deciding how much it’s worth? Or perhaps you’ve been a used car buyer questioning whether or not a car you’re interested in is really worth what the current owner is asking for it. If you’ve experienced either of these scenarios, you’re not alone. To help you in the future, here are five things to look for when trying to determine how much a used car is worth.
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Used car values are a difficult thing to nail down for several reasons. There are so many different factors that go into determining the value of a used car it is difficult to say with certainty how much a car is worth on any given day. In the end, a good rule of thumb is to trust your gut. It’s better to avoid a transaction you’re unsure of than to make it and regret it down the road.
Consider the Mileage
At the top of our list in determining a used car’s worth is its mileage.You’ll need to pay attention to two things: total number of miles and how those miles were racked up. Both factors give you an idea of how much wear and tear the engine has seen.
In terms of total number of miles, what’s important is the current engine. In other words, you may find a 15 year-old car with an odometer reading of only 60,000 miles. But if that 60,000 miles is on the original engine, the car will likely have a higher value than if you’re talking about a second or third engine.
The odometer reading tells you how many miles are on the engine that is currently installed in the vehicle.
It is illegal in every state to tamper with the odometer to make a vehicle appear as if it has fewer miles on it than it really does.
In the state of Maine, for example, it is a crime for anyone to alter an odometer reading with the intent to deceive. Resetting the odometer back to zero with the installation of a new motor is not considered deceptive, since the odometer reading is directly related to the engine rather than the vehicle as a whole.
As far as how the mileage was achieved, there is quite a difference between highway mileage and city mileage. It is generally accepted that the stop-and-go driving we do around town is harder on an engine than highway miles. So if you were to purchase a fleet vehicle from a company whose employees put on excessive highway miles, the car still may be in better shape than a similar vehicle with fewer city miles. Keep in mind that you are relying on seller honesty in this area.
Consider the Body Condition
The condition of the car’s body goes a long way in determining its worth. First and foremost, being visual creatures we are unlikely to be interested in spending a lot of money on a car with a body ravaged by rust and accident damage.
That’s why used car dealers go to such great lengths to repair damage before putting a used car back on the market. Then again, there’s also the issue of safety.
If the body of a used vehicle appears to be excessively rusted, there’s a good bet you could crawl underneath it and see similar amounts of rust. Rust is a big problem in terms of safety because it can destroy brake lines, cause fuel leaks, weaken the car’s frame, cause engine mounts to break loose, and so on.
Accident damage can also be a safety issue if the frame and other critical components were not properly repaired after a crash.
If you’re purchasing a used vehicle from a dealer, they may be required by law to disclose the extent of body damage. In North Dakota for example, any vehicle less than nine years old and being sold by a dealer must come with an appropriate form explaining the damage, if the monetary value of that damage exceeds 40% of the retail value of the car. Most other states have similar laws.
Consider the Geographic Location
One of the things that people forget to look at in terms of a used car’s worth is its geographic location. For example, cars from the northeastern United States tend to be of lower value than those in the southwestern states because of the difference in weather conditions.
In the Northeast, is not uncommon for communities to use road salt as a means of combating winter snow and ice. Unfortunately, road salt is extremely corrosive, according to the Salt Institute. If a car from the Northeast has had proper rust coating applied and maintained throughout its lifetime, it will retain a higher value than one that has been neglected.
By the same token, cars from states like Arizona and New Mexico tend to have a greater probability of engine damage due to exposure to high heat. If an owner pays attention to regular maintenance by keeping coolant levels high, performing regular oil changes, and paying attention to belts, his car’s engine will endure less wear and tear. That will make his car more valuable on the resale market then the driver who fails to perform the same tasks.
Consider the Blue Book Value
Dealers typically use one of two guides in order to determine the value of a used vehicle on the retail market. Those two guides are known as the Kelley Blue Book and the National Automobile Dealers Association (NADA) guide. Both of these guides are put together using a variety of factors that take into account a used vehicle’s reliability and future life.
The one caution involving these guides is that they should not be taken as the final word in a car’s value. According to a 2010 article featured in the Washington Post, organizations like Kelley Blue Book don’t do any independent testing of vehicles; they use the research and testing results of others. That means their valuations can be somewhat skewed depending on the sources they use.
That aside, resources like Kelley Blue Book and the NADA guide can at least tell you whether or not the value placed on a specific used car is in the right ballpark.
On average, the valuations from these guides are fairly close. You can view the guides online or purchase paperback versions from the appropriate organizations.
Consider the Current Market
The fifth thing to look at when trying to determine a used car’s worth is the current market for that vehicle. This is a big issue for a lot of private sellers as they tend to think their used vehicle is worth more than the market will bear. In reality, the value of any product or service is only what the average buyer is willing to pay for it. It is not determined by some mathematical formula or a cost analysis offered by an industry expert.
Where you see market conditions really become an issue is in the area of used cars that have been modified.
For example, consider the vintage Rolls-Royce shown on an episode of TV’s Pawn Stars this past spring. The owner had heavily modified the vehicle during the restoration process and was asking for some $30,000. He could not make the sale when it was explained to him how vintage car collectors want to see vehicles restored to their original condition rather than being modified.
The point to understand here is that, just because a car owner puts thousands of dollars into a vehicle installing high-performance parts or other customizations, doesn’t mean its market value is going to go up.
What one owner may find attractive as an upgrade, a purchaser may find to lessen the value of a car. It is rare for a restoration hobbyist to get all of his money out of a vehicle unless he restores it to near original condition.
Buying or Selling
Determining a car’s value is a different process depending on whether you’re the buyer or seller. If you’re the buyer, you want to get as much vehicle for your dollar as possible.
You need to consider all the things we’ve listed here in relation to how long you think the car will last, how often you intend to drive it, where you intend to drive it, and so on. If you suspect a vehicle will not perform up to your expectations, it’s certainly not worth a high price tag.
If you’re the seller, you want to get as much for your used car as you can. But be realistic in assessing the worth of your car based on the realities of the current market. Be realistic about mileage, overall mechanical and body integrity, and how your vehicle will be perceived by purchasers.
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