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.
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.
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.
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.
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.