How much is my vehicle worth? Hard question! I wish after 20 years in the auto industry there was an easy answer. they make prices and values easier to obtain. In fact, the numbers are more confusing than ever in many ways.
The following email conversation about retail car prices and trade-ins highlights confusion and misunderstandings about the price and value of cars.
This conversation was between Ted, the dealer and me, and Rich, the customer …
Hi Rich …
Donna loves the 2006 Volvo. It fits Perfect !
Again the retail value is: $ 23,800
What Medway Imports Can Do:
2006 Volvo S40 Price …………. $ 18,995
2001 Chevy Impala TradeIn Value …… .. $ 4,000
Thank you Rich!
Note: The Volvo still has its 4-year factory warranty of 50,000 miles, free roadside assistance, etc.
Thanks for the info. The Volvo is certainly a great price, but isn’t my Impala worth $ 6,000?
Kelly Blue Book lists the private party value at approximately $ 7,995. I know that doesn’t mean it will be sold for that amount. However, most of the ads I’ve seen reflect a range of $ 7,000 to $ 9,000.
I’m assuming that based on the selling prices, the actual selling price would be reduced by $ 1,000 to $ 1,500.That would mean that a reasonable expectation would be the value at $ 6,000 to $ 7,000.
You’re Right Rich $ 6,000 $ 7,000 is certainly a reasonable “retail value” for the Impala, but research shows it actually only retails for around $ 4,000. Interestingly, based on your calculations of $ 1,000 from a Bluebook for a private party, the 2006 Volvo would be “reasonable” at $ 22,800 as it sells for $ 23,800 to $ 24,500 depending on the source used.
The fact is, however, that neither the Impala nor the Volvo will sell at these selling prices, at least not in today’s market.
I can rent an Infiniti that would probably cost me less a month. In 2007, my partner just leased a loaded Infiniti for 39 months (78,000 miles) for $ 558.00 per month. The capital reduction was only $ 595.00.
I guess you could lease the same car for 3 years with 36,000 miles for no more than $ 400 a month.
They are also willing to give me $ 7,000 for my Impala 2001.
I would appreciate your feedback!
Your guesses might be obvious; However, this is a classic example of the confusion about trade-in and actual vehicle value.
The $ 7,000 they pay you is called the “feel good number”. Dealers wear it all the time and then meet you at the end of your new car’s sale.
In other words, I’m happy to give you as a dealer $ 7,000 for your Impala as long as you’re willing to pay $ 22,800 or more for the 2006 Volvo. you’d spend more.
It’s amazing how many times people fall into this trap every day based on Bluebook-like retail numbers.
You can find an interesting discussion on vehicle values in the Bluebook price article at http://www.repairtrust.com/articles_kelley.html.
The fact is, as retailers, we are unlikely to get $ 22,800 on the Volvo, although the book reasonably says. Go to seven different websites and you will get seven different values.
I can get you any used car you want at a great price, like the Volvo, if you want, but you could still only pay $ 4,000 for the Impala.
Since we are not using manipulative “feel good” numbers to add resale value by increasing Volvo’s asking price, it appears we are offering very little on the Impala.
Actually the numbers are correct. $ 4000 is a real number!
Note … none of this is a sales pitch, but rather a direct treatment of the Impala’s “value” in the real world. That’s not to say you can’t sell it for $ 7,000 as long as you want to do the footwork, advertising, bald tire changes, maintenance and overhaul, backseat repairs … etc.
In short, the value of a car is incredibly complex and variable.
I don’t want you to think that the market price is going down. What happens, and the only way to do real business is by getting “real value” and “fair value” for your Impala.
The short answer to all of this is, you get a deal. at both ends, although it may not feel like that on the Impala
Hi Ted, if I were to fund about $ 14,000 for the Volvo, my monthly payment would be about $ 430 / month (3 years @ 7% ) I think I’m more inclined to lease a 2007 supercharged Infiniti that would probably cost me less on a monthly basis