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Know the car's cash value before you negotiate
Last updated: May 2014
Whether you are buying from a dealership or a private party, it's important to know a car's current cash value. This depends on a number of factors, including the vehicle's age, mileage, condition, trim level, optional equipment, and even the region where it's being sold. For any used car there are two prices: retail and wholesale.
Retail price. This is the higher of the two prices, and is what you would expect to pay for the car if you were buying a car at a dealership. If you are buying it from a private seller, you can usually expect to pay a somewhat lower price. Retail is also considerably higher than the price you'll receive for your trade-in because it includes a profit margin for the dealership.
Wholesale price/trade-in value. This is essentially a car's trade-in value to a dealer, who will likely sell it to someone else for profit. Understandably, the trade-in price is much lower than the retail price, and it is unlikely that you will be able to buy a used car for this price.
But it's a figure you should know if you're trying to decide whether to trade in your current vehicle or sell it yourself.
In the wholesale end of the business, a car can actually command several prices. One is what the dealer offers a customer as a trade-in. Then there's a dealer-to-dealer price when one dealer sells that car to another. If the car goes to a wholesale auction, which many do, then there is an auction price. Dealers and brokers may buy auction cars for resale. Every step of the way, the middlemen take a markup and the car acquires a new "value."
Find the car's book value
The first step in assessing a used vehicle's true worth is to check its book value. This is the figure you'll find in pricing guides and used-car pricing websites, which lists a vehicle's base retail value. To get a more accurate figure, you must factor in any options as well as mileage and condition. Most websites let you do this online and then give you adjusted figures.
Or, you can check websites or printed pricing guides including those from Consumer Reports, as well as Kelley Blue Book, the National Automobile Dealers Association, and VMR. Printed guides can often be found in libraries. Checking several sources will give you more pricing information when you begin haggling with potential buyers.
What are the sellers asking?
While printed pricing guides and website estimates can give you a general idea, you can often get a better fix on a car's worth in your region by localizing your search, whether it is by checking the classified and dealer ads publications, and some of the online used-car selling sites. Sometimes it's difficult to sort out the private sellers from the hidden dealer ads, but it's a good place to start. Look for vehicles that are similar to the one you are considering in terms of model year, mileage, trim level, options, and condition.
You can also check online used-car selling sites like Autobytel, UsedCars.com, AutoTrader.com, or eBay Motors. Onnline, you can limit your search to your general geographic area and instantly get a listing of the cars for sale and the prices. Prices in other regions may vary from those in your area.
Knowing what other sellers are asking for similar vehicles can provide ammunition for you to bid lower on the car you want to buy. Keep in mind that the listed prices are the asking prices, not what people are paying. Assume that all such prices are negotiable. One advantage to eBay is that you can check completed auctions for the actual sale prices.
Used car buying guide
Learn more about choosing a used car, avoiding a lemon, buying and selling a used car, pricing and financing, and more in our used car buying guide.
FAQs
Since 1926, Kelley Blue Book has been one of the most trusted names in the auto industry. You might say we literally "wrote the book on car values". And today there's no better place to find the value of your current car than KBB.com.
How do you determine the fair value of a used car? ›
You can find the actual value of your car by going to a library or bookstore and referring to a Kelley Blue Book. Or, you can find similar vehicles that are being sold in your area (within 50 miles of your zip code) with local auto trade magazines, or online.
Are nada used car values accurate? ›
How Does NADA List Prices of Cars in Their Guide? Representatives of NADA promote their guide representing it as the strongest, most valid, and most reliable information list of auto market values when compared to the KBB guide, and even Edmunds pricing guide.
What is the best way to find out what a car is worth? ›
For over 90 years, Kelley Blue Book has been The Trusted Resource for used car values, helping car owners understand what their used car is worth. Depending on the method of disposal, there actually may be more than one Blue Book Value for the consumer's car, truck or SUV.
Is Edmunds or KBB more accurate? ›
Many experts believe Edmunds' values are more accurate than KBB's. That's not always the case, of course, which is why getting several estimates and averaging still makes the most sense.
Where is the best place to get the value of a car? ›
Kelley Blue Book, known as KBB, is a trusted name in automotive valuation. With a vast database and an intuitive interface, KBB enables users to accurately estimate the value of new and used vehicles. Simply enter details like make, model, mileage, condition, and location to get a tailored valuation.
What is the black book value? ›
The Black Book value is essentially the wholesale or auction value of a car. Black Book sources pricing data from both wholesale auctions and actual vehicle transactions from across the country. They update or validate their used car prices on a weekly basis.
Can I negotiate at CarMax? ›
CarMax has a no-haggle policy, which means you can't negotiate the price. This can be a benefit, though, because you know you're getting CarMax's best rate first instead of a lowball offer. You can still sell your car to CarMax after the seven-day period, but you'll need to get a new offer.
How can you determine the current value of a used car? ›
Both Edmunds and Kelley Blue Book are reputable sites that offer pricing information. The accuracy of an appraisal has a lot to do with the information the owner provides. If you overstate the vehicle condition or don't check off the correct trim level and options, your value is less likely to be accurate.
Do banks use KBB or NADA? ›
Kelley Blue Book is heavily used on the West Coast, Black Book in the Southeast, and NADA (now known as J.D.Power) is more widespread nationally due to its heavy dependency on financial institutions in regard to loan originations.
KBB factors in the condition of the vehicle, local market conditions, and popularity of the vehicle, so their prices tend to be a lower than NADA. NADA values tend to lean higher because they assume cars are in good conditions. Insights can be gained from both values, but KBB looks at more factors.
Why is KBB so far off? ›
The real value of your vehicle is determined by what someone will pay for your vehicle today. With the high demand of used cars these days, prices can vary from day to day. None of the books will reflect this change.
How do you find the cash or market value of a car? ›
It is determined by the replacement cost of your vehicle minus depreciation, which considers things like age and wear and tear.
Does CARFAX tell you how much a specific car is worth? ›
CARFAX History-Based Value is the only tool to give you a specific price for every used car based on its history. CARFAX uses information like prior accidents, titles brands, service history, and number of owners to determine a VIN-specific price for every car in the United States.
How do you predict the resale value of a car? ›
The exact appraisal amount will change based on local market conditions, the dealer's inventory, and their ability to resell the car. To understand the value of your car, take it to multiple used car lots to see what they will give you for it. This will help you understand the high- and low-end values for your car.
What is the most accurate car valuation site? ›
An HPI car valuation provides the most accurate and reliable car valuation available. Not only is our service free, but we also give you more information than any other car valuation provider. If you're looking for a used car value, then look no further than HPI valuations.
What is the best website to buy second hand cars? ›
Cars.com is our top pick for selling a used car, while Edmunds tops our rankings for buying a used car online.
What is better, Carvana or CarMax? ›
Both Carvana and CarMax advertise no-haggle pricing, but Carvana offers a seamless selling process that helps it come out ahead in our rankings. We give Carvana the edge over CarMax as a car selling website. Our team rates CarMax just slightly ahead of Carvana for its car buying services.
Are CARFAX values reliable? ›
Carfax offers for used vehicles often exceed estimated private sale values, while cars listed for purchase through the company may cost more. Customers report being satisfied with the company's partner dealerships, but some describe inaccuracies in Carfax vehicle history reports and slow customer service.
