How To Determine the Value of a Used Car

Price is the point where supply and demand meets. It is also often called as the equilibrium price. Because of the dynamics of supply and demand, price is not a constant factor, because it will only settle once the buyer and the seller agreed on a price.

The easiest way to determine a price is through bidding. Given a certain amount of people willing to buy, buyers will outbid each other until only one buyer can offer the highest amount for the seller. This is a case of too many buyers against sellers. On the other hand, sellers will outbid each other to lower the price until only one seller can give the lowest price at an acceptable margin, or sometimes loss. This is a case of too many sellers against buyers.

But how do you know the price of a used car? For one, the seller has to come up with the price level subject to negotiations. Price will change depending on the bargaining power of the buyer. But the buyer himself should have an idea at what price level the used car should be.

There are many ways to determine the value of a used car. Some of them are bellow. 

Find a reference price for your car. The best way is to compare your car against those who are also selling their cars online. Surf the Internet or browse classified ads pages and find for the same mode and year manufactured. This should be your benchmark price. Of course, each entry is different, so it is best to average the prices of each poster. Take a sample, say 20 or 30 cars. The average price will keep the value of the car in the middle. This should set the lowest value of the car. 

Check the kilometer reading. The lower the kilometer reading means the car is rarely used. The higher the kilometer reading, even if the car is about two years old only, should warrant a discount from the seller since the car has been fully utilized. Clients will likely encounter car problems in the future if the car has been fully utilized. If the kilometer reading is low, the buyer can put a premium price over other second hand car in the market.

Check car enhancements. If the seller is a car enthusiast, then most probably that the car has been modified already with additional equipment or accessories. The investment used to acquire and add these additional investment or accessories can then be added to the price of the car. Additional accessory would include modified sound system, upgraded mufflers, tires, steering wheel, and driver's seat.

Check the car history. If a car has been involved in road accidents then the car will not get back to its original form even if it has been repaired. Even the performance of the car on the road will most definitely be affected so it is very important to check its history.

While there are many more factors to consider in determining the value of a car, the above points should be the utmost consideration. At the end of the day, your willingness to pay a certain car or your willingness to sell at a price level will dictate the value of the car.


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