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How do I figure out what the car is worth?

Home » Automobiles » Making an offer and negotiating the price of a car » How do I figure out what the car is worth?

Once you narrow down your options and decide on, say, a blue or silver 2002 or newer Honda CRV V4, with power everything and a moon roof, how do you figure out what it is worth? There are several avenues for investigation, and you should pursue them all to get the best feel for what your prospective car is really worth. The first of these, and the best, is to read the used car advertisements in the newspaper from the major dealerships in your area for several weeks or even a few months. By doing so, you can become familiar with the automotive scene of your area, and you will even get an idea of the relative sizes and inventories of the various dealers. If you see your Honda CRV for $16,999 at three dealers in town, and $15,500 at two others, you will want to call them and see what the difference is between the cars. Especially, you want to ask about mileage. As a rule of thumb, expect the value of a car to decrease by around $100 for every additional 1000 miles on the car.

After doing this, you will want to check the Kelley Blue Book website www.kbb.com . Kelley Blue Book allows you to see the wholesale price (what a dealer typically pays) as well as the low and high retail values (depending on the demand in your area). Call your bank to ask what the loan value is for the car. This is what the bank is willing to loan you on the car, and is typically 80% of what you should expect to pay for the car. For instance if the bank will loan you $8,000 for your car, you should look to pay not much more than $10,000 for the car overall. Finally, the dealer can give you the carfax on your car. Especially if a car looks too good to be true, this will often tell you why. Carfax reveals if your car has had major damage, such as an accident, flood damage, or major body work. Beware paying full price for a car that has had this sort of damage, no matter how good it looks on the outside.

Combining all these sources, you should be able to make an intelligent guess about the value of the car you want to buy in your area.

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