Monthly Archives: August 2015

Used Car Pricing

Anyone who has ever been part of the process to buy or sell a used car has become aware of the many factors that go into determining the final sales price. Used car pricing must be determined for each deal. The main influence of the price category is under which circumstances the used car is being sold and to whom. It is important for potential used car buyers and sellers to understand these terms.

Kelley Blue Book Price
One thing that many people do not realize is that cars actually have multiple Blue Book values. Depending on the circumstance, there are Blue Book prices for dealer retail sales, private party sales, and trade-in values. Different types of data are used to calculate these different prices and buyers and sellers should make sure that they are using the right KBB value for the transaction. Another listing price is the Edmund’s True Market Value, which is the average market value of the car across a range of different circumstances.

Retail Value
The retail value for a used car in Tampa is the price that a dealer will ask for a vehicle and is generally the highest value that can be assigned to a used car for sale. Retail value is determined using resources like the Kelly Blue Book value and the True Market Value. Listings for and transaction prices of similar vehicles are also used to help determine the appropriate retail price.

In most situations, the retail price is the most that the dealer can hope to get for the vehicle and they expect the buyer to negotiate the price down. Overhead costs such as advertising & sales commission among others are built into the asking price. The ability to offer financing to the buyer also justify the higher price in comparison to a private seller. A car that sells near retail price is expected to have a clean title history, has been fully reconditioned, and possibly could include a warranty or some sort of guaranty.

Private Party Value
The private party value is the price that one can expect to pay for a used car when buying from a private seller. This price can also be one you want to take note of when considering selling your own vehicle or in determining fair market value from an insurance company.

The foremost reason why a private party transaction will produce a lower selling price that one sold at a dealer is that is in almost all cases the used car is sold “As Is”, or does not come with a performance guaranty unless the original factory warranty is still in effect. This means that it completely falls on the shoulders of the buyer to analyze and assure that the vehicle that is being bought will not fail you once you have surrendered funds and transferred title into your name. This is why many buyers of private seller used cars make arrangements with a local auto mechanic to do a full inspection before making such a commitment. Private sellers also cannot offer financing options and most time do not professionally restore the used car.

Wholesale Price
The wholesale price is the amount that the dealer paid to acquire the vehicle. It can be helpful for a buyer to know the wholesale price, but you should realize that the dealer has expenses to cover and they are not going to sell a vehicle for the same price that they purchased it for.

Trade-in Price
This is the price that a dealer is willing to offer for the used car you currently own. It is typically one of the lower values that you will get for your used car and it is usually close to what the dealer would pay for the car in a wholesale situation.

Depending on the context, all of these used car pricing structures may be used in the Tampa region. Whether you are a buyer or a seller, you need to know the value of the vehicle and understand how to apply the appropriate price category.

Asking price
The asking price is just what you may have assumed it to be, the price that a seller is asking for a vehicle. In a practical sense, the asking price starts close to the retail price because it is the most that the seller is hoping to get for the used car and it is usually assumed it’s the starting point for a negotiation.

Tips on Inspecting a Used Car

If you find the right deal buying a used car can be a great investment of your car purchasing dollars. Keep in mind it does require the individual to expend some time and effort to make sure that are getting a vehicle that works well and one that is worth the money. A buyer needs to protect against the possibility of purchasing a car that is in poor condition by taking every car for a test drive and inspecting several integral elements of the vehicle. This may seem like a daunting task to a potential buyer, but many of the potential pitfalls can be easy to spot when you know what to look for. Inspecting a used car the proper way will assure this.

Exterior
When you are inspecting the exterior of a used car, you will make note of dents and scratches for negotiating purposes, but what you are really looking for are signs that the vehicle has underwent any significant bodywork in the past. Signs of previous bodywork include inconsistencies in the finish, a new paint job or seams and fenders that are not properly aligned.
You will also want to inspect the quality of the glass, whether all of the lamps work and the condition of the tires. Check the glass for any cracks or dings and make sure that all of the windows work. Inspect the tires for wear, check the pressure and look to see if they are all of a matching brand. Also, take the opportunity to inspect the interior of the trunk and the spare tire. Make sure there is a spare and all of the hardware for changing a tire is present. As for lighting, you want to go around the car and check every bulb light one-by-one.

Interior
As for the interior, you will want to look for any aesthetic damages to the seats, interior upholstery, and check the dashboard for cracks. You will also want to check all of the interior electronics like the radio, horn, locks, and interior lights. Most importantly make sure that all of the gauges work and turn the car on to see if any of the warning lights come on, and especially when buying a used car in Tampa check to make sure the air conditioning system works at full capacity.

Mechanical
Open the hood and check the oil filter and quality and level of the oil. Check the belts and hoses for any signs of wear or corrosion. You will also want to check the battery cables and the terminals for signs of corrosion along with checking the age of the battery itself. Bounce each corner of the vehicle to test the suspension (springs and struts). If you hear any creaking or if different corners react differently, it could be a sign of a problem. You will also want to look under the vehicle to check for any signs of leakage. After you have inspected the vehicle, it is time to take it for a test drive. During the test drive, you will want to pay attention to how the engine sounds and how the transmission responds to acceleration. You will also want to test the brakes and the steering in a variety of ways. Not taking the time to inspect the vehicle before you test drive it can lead to a major loss of money and the purchase of a car that has more problems than are worth fixing.

Ask the seller what major mechanical procedures have been performed on the used car. This would include replacement of the timing belt and anything regarding the engine and/or transmission.

Once the process of inspecting a used car is completed and everything checks out to your satisfaction the negotiation process can begin based upon your completed inspection and testing.

Three approaches for selling a used car

Whether you live in Tampa or anywhere else in the United States, you have three options when it comes to selling a used car (Trade-In to a car Dealership, Sell to a private buyer, or use a cash for car service). There are however, a range of factors that will play a role in which of each of these 3 methods is the best choice for your situation. Each one of them has its pros and cons, and before you decide which way to go, you will need to weigh all of these factors.

Trade-in to a car dealership
Trading your used car to a dealer does have its advantages, especially if you are trying to buy a car from the dealer. They will negotiate a trade-in price with the seller and even help them to finance the new vehicle. This can make for a convenient transaction. Nevertheless, there are some issues with trading in to a car dealership that can make it a less than ideal option.
Firstly, a car dealer is very unlikely to offer you more than the fair market trade-in value for the vehicle. If you are trading the car in, they might offer you a better price than if you are just trying to the sell the car for cash, but the dealer is going to want to make a profit on your used car and their profit is going to come from getting you to accept the lowest price possible for the vehicle. You will want to take a look at the Kelly Blue Book (www.KBB.com) valuation and make note in the difference between Trade In value in comparison to the Private Party suggested sales prices.

Private sale
On the financial end, the private sale option is probably the best option for selling a used car. When you sell the car on your own to a private buyer, you are not dealing with a buyer that is looking to turn the car around for a profit and in turn, the individual is more likely to be willing to negotiate a fair price for the vehicle.
The one negative to private sales is that it tends to require more effort from the seller. When you sell the car on your own, you are responsible for every aspect of the selling process. That means that you have to market the car to potential buyers, take the time to show the car to buyers and you have to be willing to commit this time and effort to the process.

Cash for cars services
If you are looking to sell a used car, there are services that offer fast cash for used vehicles. While this may sound like the simplest solution it most times is the one that will bring in the least amount of capital.
Most of these services will take cars regardless of the age, condition or value, but they usually do not offer the best prices for the vehicles. This can be a good option if you are selling a car that is essentially junk or if you are in a situation where the sale is particularly urgent.
All of these options are available to individuals that are trying to sell a used car in Greater Tampa. To determine which of these methods is right for you, it is important to consider things like the condition of the vehicle, how much money you need to get for the used car, how much effort you are willing to put into the selling process and how long you can wait to complete the sale.

How to determine the condition of a used car

When it comes to selling a used car in Tampa, one of the most important parts of the selling process is assigning the correct value to the vehicle. While you want to make sure that you get as much money as you can on the sale of your car, you also want to make sure that the price is fair and attractive to potential buyers.

In setting the price for a used car, there are several factors that can either add or subtract value from a vehicle. Along with details like the make, model and age, the process to determine the condition of a used car is one of the key elements in pricing the vehicle. The vehicle condition categories include excellent, very good, good, fair and poor. The seller will need to address and evaluate a range of different points concerning the vehicle’s condition to help them figure out which of these categories their car belongs.

Condition categories

While in some ways the condition categories can be a little flexible, here are some general descriptions of the different categories to help you understand which vehicles should be assigned to which categories:
,
• Excellent: This would be vehicles that have no mechanical problems and no cosmetic issues. Essentially, these used cars are in a condition that is next to perfect.
• Very Good: These vehicles may have some minor issues, but any reconditioning should be limited. The vehicle is mechanically sound and really only needs some touch-ups.
• Good: A vehicle of this condition may have some mechanical or cosmetic problems. However, the vehicle should not need extensive reconditioning work.
• Fair: This category would include vehicles that, while serviceable, require some extensive work in regard to reconditioning.
• Poor: This is the broadest category and it includes vehicles that are essentially beyond repair or vehicles where the reconditioning would cost more than the value of the vehicle.

Factors to Consider

In an attempt to determine the condition of a used car, it might be helpful to make a checklist and objectively evaluate a variety of different features. The three key areas that you need to concern yourself with are the interior, the exterior and whether the car is mechanically sound.

• Interior: The condition of the upholstery, whether the dashboard and panels have any damage, do all of the interior electronics work, do all of the windows and doors work, etc.
• Exterior: Has there been any body or paint work done, are there any scratches or dents, the condition of the wheels, the condition of the glass, etc.
• Mechanical: The condition of the engine and transmission, the brakes, the suspension, the steering, the climate control system, will it pass an emissions test, etc.

Other factors that you should consider when you determine the condition of a used car is the status of the title, whether there are any aftermarket parts on the car and whether you have a complete and verifiable maintenance history for the car. In the process of assigning a value to your used car in Tampa, you will want to be honest and objective. In some cases, two different people may have different views as to which category a car belongs, but if the differences are slight it won’t likely have an impact on the sale. However, if the buyer feels that your evaluation is dishonest, they are unlikely to trust you and it could make selling the car difficult.