Getting the Best Price for a Vehicle
We're assuming that you have pondered whether you should keep or dispose of your vehicle and now want to sell it or trade it in on a different vehicle. If so, there are two keys to getting a good price for it. The first key is preparing the vehicle for show. The second key is researching the book value of the vehicle.
Prepare your vehicle for show. Whether you trade or sell, you will almost always get a better price for your vehicle if it looks like you have taken care of it. If you are truly serious about selling or trading, our auto experts tell us that the very best way to prepare your vehicle for show is by taking it to an auto detailing shop. These shops wash, wax, buff and rejuvenate the interiors of cars and light passenger trucks. Some shops can even steam-clean your engine so that it looks better than the day it rolled off the assembly line!
Because they specialize in this business and have the right equipment, detailing shops can probably do a more thorough job than you could yourself and will save you considerable time. Our experts agree that you will almost always recover more money than it costs for a full detailing job — typically less than $100 — by getting a higher sale or trade-in price on your vehicle.
You can find auto detailing businesses in the yellow pages. If you know a used car dealer in your church or local civic group, you may wish to ask him or her where to take cars to be detailed.
Research your vehicle's "book value." Book value is the amount that an auto dealer's guide says that a vehicle of a given make, model, and year is worth. Book values are usually compiled by polling a number of dealers to find out what prices they have been getting for vehicles they have recently sold. Why is "book value" important? Because many of the parties that affect what you can get for a car consult these manuals.
Bankers look at the manuals to help them decide how much credit to lend someone on a vehicle. Dealers consult them to gauge what they should charge customers, or ask on the auction block. Some state and local governments even use such books to assess personal property and sales taxes. They do this to avoid having people claim "I must have just caught my neighbor on a good day because he agreed to sell me this two-year-old Mercedes for $500."
The nice thing about researching the book value of a vehicle is that you can do it yourself with a minimal amount of time and effort. In order for your research to be truly valuable, however, you must use a reliable source book that is current and you must use it to assess your vehicle correctly. Here's how:
- Use a reliable source — it helps to use a source that your prospective buyer, or his banker, probably uses. In our opinion, one of the best and most frequently used resources is the National Auto Dealers Association (NADA) manual. Although the NADA manual is not typically available for sale to the general public, that doesn't mean you can't get your hands on a copy. Maybe you know a used car dealer. Ask to borrow his or her copy. Another option is to ask a banker whom you use regularly. The manual is updated monthly, which helps to insure that the information in it is timely. There are separate versions for cars and trucks.
- Use a current source — make sure that the edition you check is as current as you can get. In some cases, a vehicle's value may rise or fall dramatically in a relatively short period of time.
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About 14 years ago, a European auto manufacturer was plagued by reports that its cars had a defect causing them to accelerate violently and without warning. While these reports were circulating in the news, and for some time thereafter, used car dealers couldn't give these cars away. Smart dealers drove the cars themselves rather than take massive losses on what were once considered valuable luxury cars. Particularly savvy dealers snatched the cars up at fire sale prices and held on to them. Eventually, investigators found the claims to be largely without merit. As word of those findings spread, the vehicles once again began rising in value.
If you owned one of those cars and checked its book value in a manual that was just six months out of date, you could have been led to believe that your car was worth about $1500 less than the going rate for it depending on when you sold it. This is one of the problems with buying many of the guidebooks offered in bookstores or your local library. Their information is not updated frequently enough.
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- Assess your vehicle accurately — look up your vehicle according to its make, year, and model. Also be sure that you are comparing vehicles with the same number of cylinders in the engine, and similar option packages (e.g., "LT" package). If your vehicle is more than five years old, or if it is a specialty vehicle, you may not find it listed in the book. In this case, scanning your local paper or an auto circular can help give you an idea of the asking price for vehicles that are similar to yours.
- Get the information you need — most guides provide separate dollar values for retail, wholesale, and bank loan value. If you are trading in a vehicle, it is generally worth wholesale value minus a deduction for unusually high mileage and/or repairs that are obviously needed. If you are selling a vehicle, the price you can get for it typically lies somewhere between its bank loan value and retail value.
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