Confused about your used car value? It’s easy to get confused when there are several popular used car value sites on the internet, and none of them ever give you your car’s actual value.
The biggest problem with all of the car value sites and calculators is that they give you a seemingly endless stream of estimates and ranges - sometimes with wildly different estimates for the exact same car.
Most of these sites give you several different ranges, like trade-in value, retail value, and private party value. It can be tricky to understand which one of these categories applies to you. That’s probably the reason why you’re reading this right now.
Don’t worry. In this post, we’ll walk you through the differences between these categories. We’ll talk about retail value, trade-in value, and private party value, and which one you should be using.
Dealers Sell Used Cars for Retail Value
Simply put, retail value is the price a dealer charges for a used car after it has been fully reconditioned. It’s the price someone would expect to pay for a used car if they bought it at a dealership.
Retail value is generally the highest price on the spectrum of used car value. The reason for this is that retail value takes into consideration several overhead costs that are incurred by the dealer, like mechanical repairs, reconditioning expenses, advertising and marketing costs, sales commissions, and administrative costs.
Sometimes people see that the retail value is higher than private party value and decide, “I’m going to sell my car for retail value, simply because it’s higher.”
But try to be reasonable. The dealer has dedicated people to manage titles, registrations, and other paperwork. They have a staff of professional mechanics to tune the car up and make repairs. And they have a finance department to facilitate credit purchases.
You almost certainly don’t offer any of these services, and that’s the main reason why you’ll probably have to settle for private party value.
People Sell Used Cars for Private Party Value
Private party value is the price an individual can charge for a used car when they sell it to another person. Private party values are lower than retail values because individuals don’t provide the same services that dealerships provide during the car-buying process.
Dealers put cars through an extensive inspection and reconditioning process, and they sometimes offer warranties or guarantees on the cars they sell. But private party sales are almost exclusively ‘as-is,’ meaning what you see is what you get, and the buyer has no recourse for any problems they encounter down the road.
A private party sale will typically generate the biggest price tag of any selling method available to you as an individual. However, private party sales can also be a bit of a hassle.
You will assume responsibility for detailing the vehicle, posting classified ads, and communicating with potential buyers. You will coordinate test drives and negotiate the price. You will handle all of the paperwork and payment details on your own.
Completing a private party sale could take weeks, or even months. You will get more money through a private party sale than you will get for a trade-in, but take it from us, you’ll work for every extra dollar.
Trade-in value is the amount of money a dealership will give you for your used car when you’re buying a new car from them at the same time. Trade-in value is typically on the lower end of the used car value spectrum, for a number of good reasons.
For starters, many people appreciate the convenience of trading in their car versus selling it themselves, and are willing to accept a lower value as a result. Selling your car involves all of the work we discussed in the Private Party Value section above, and it can potentially involve additional legal liability depending on the state you live in.
Many people see the dealership trade-in process as an attractive alternative to all of that work and liability, and are more than happy to accept trade-in value from a dealer. If a driver needs to sell their old car, purchase a new car, and obtain financing for the new car - their local dealership is a “one stop shop” where they can take care of the entire transaction at a single location.
Another factor that contributes to trade-in value is that the dealer will actually have invest money to recondition, repair, and sell your car. Even if the dealer decides not to resell your car and takes it to a wholesale auction instead, there are still several costs associated with transporting and selling the car.
Every Car Is As Unique As the Person Driving It
Here at The Appraisal Lane, we have a saying, “Every car is as unique as the person driving it.” It’s true! You and I might own the same car, bought in the same year, and we might have driven about the same number of miles. But think about how different our two cars might be.
You might make every scheduled maintenance appointment, wash your car every weekend, keep it parked in a garage every night, and use the most delightful seasonal air fresheners money can buy.
Meanwhile, I might have three golden retrievers that I drive down to the creek every weekend. I might survive entirely on fast food eaten in my driver’s seat. I might park on a crowded street every single day. And I might have been chain smoking continually since the early 80s.
Based on year, make, model, and mileage - popular used car value sites will assign our two cars the exact same value. But in reality, your car is worth thousands of dollars more than mine.
Don’t risk losing those dollars. Submit your car to The Appraisal Lane today. Our live appraisers will review all of your car’s details and give you an exact value for your unique vehicle in 30 minutes or less.