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How to Value a Used Car

Determining the true value of a used car for sale

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Finding a fair price for a pre-owned vehicle (Factors to Consider)

Buying privately vs. buying from a Dealer

It is always a good idea to research both private pricing as well as dealer pricing for the make/model of car you are interested in. Remember, buying a car from a private seller could cost you significantly less than what a dealer might price the exact same car at, as the middle man is essentially ‘cut out’. However, you have to consider that when buying from a dealer there are a lot less risk involved and dealers might also provide other benefits such as return/exchange policies, limited warranties, etc.

Age

As soon as a new vehicle is driven off a showroom floor it immediately starts to lose value. The most value is lost within the first 1-2 years of its life where after it loses value more gradually. It is to be expected that the older a vehicle gets, the more the demand for it picks up in the second hand market but only up to the point of about 6 to 8 years old, at which point values fall off dramatically. Banks are not keen to finance cars that is older than 6 to 8 years, and hence cars reaching this age rapidly loses its value.

Demand vs. Supply

Be realistic about the market popularity of the particular car you are interested in. If there is a demand for the particular vehicle in the current market, you might have to pay a slightly higher price compared to purchasing a less desirable model of an earlier era.

Extras etc.

Give consideration to whether the vehicle has extras like a sunroof or leather seats. Extras could inflate the price somewhat, but in the second hand market, ‘extras’ on a vehicle can almost be seen as ‘freebees’, as these items almost retains none of the original value.
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