One of the most frustrating things about buying a used car is knowing not how much it’s worth — its value — a fair price to pay.
Two cars of the same year, make, model, condition, and mileage can have two very different values, depending on who is making the valuation. Even the same car can have different values, again depending on who you ask.
Companies such as Kelley Blue Book (kbb.com) and Nadaguides (nadaguides.com) make it their business to publish used car value guides, where their values are based on a number of variables such as auction prices, mileage, condition, optional equipment, market supply and demand, regional differences, and past price history. With all their expertise and experience, the values they produce are nothing more than educated estimates. One company’s analysis of the data will nearly always produce a different result than another’s.
Car buyers are often confused as to why they find different values for the same car from different sources, and that those values don’t agree with the prices they see on that car at dealers in their area. There seems to be an expectation that there should be a “standard” price for used cars. Or that they can find values based a car’s VIN number. Unfortunately, that is not the case.
Actually, the people who best know car values in their area are local dealers. They know how auction prices are trending, they know the supply and demand for particular vehicles in their area, they know competitor’s prices, and they understand customers in their area. If a number of dealers in the same area are pricing a particular vehicle about the same, then that is the value of that vehicle, in that area — allowing for about a 10% markup over the actual value, or selling price.
Anyone buying a used car should determine as best they can the local value of the car they want to purchase. Use a combination of Kelly Blue Book, Nadaguides, and other online sources. Then scan local used car listings in Autotrader.com, UsedCars.com, and local dealer websites. With all this data, you’ll have a good idea of the value of your vehicle in your area. Knowing that, you can go shopping with some confidence that you know what a fair price to pay would be.