Understanding Your Car Value

To understand car values, it gets separated to three main categories; retail value, private party value and trade-in value. Although it is all subjective, the market never lies and will always value it according to supply and demand, with a sprinkle of a little salesmanship. We do live in America, so technically you can say to hell with those values and price out your car to whatever price you want. But understanding these three categories will give you an idea, and save the headache when selling your car.

Retail Value

Retail Value is the high end of the value. It is the top value when a car is “turn key” ready. The car needs nothing, it is fully serviced, does not need any cosmetic or mechanical attention. Essentially it’s in a dealership “showroom” type condition. Some will say only dealerships can sell for this price, that’s not necessarily true. Some dealer lots, generally the independent lots, aren’t so strict, don’t care too much so long the car looks relatively decent.

Private party value

Private party value is in the middle range. It is lower than retail value simply because, “retail value” signifies that a licensed business is selling it, meaning any illegal/unethical activity can be traced back to that business. With private party, it’s not so easy. Once the sale is done and you guys go your separate ways, it’s much more difficult to track down that private party. Supply and demand and salesmanship again is a factor on what end of the spectrum you can get for your car. But private party typically is the middle or “fair market value” range.

Trade-In Value

This is the low end of the range. This category signifies how much a dealership generally pays for it as a trade-in. This is the easy sale, same day payout value. Dealerships need to pay this low amount simply because after the appraisal/inspection they typically have a standard expense of prepping the car for sale, as well as safety checking it, smog checking it, etc.

To summarize the three categories, the trade in value is the low end, private party is in the middle, and retail is the high end. Condition plays a big role also; an excellent condition compared to a poor condition car will make a big difference. Where your car falls will depend on condition, supply and demand, and your market/salesman effort. It’s not rocket science, but with a little bit of research and preparation it will allow you to possibly sell it above its average value, and also save you a headache expecting too much for it. There is lots of data now for both private parties and dealerships to make a more fair and transparent assessment.

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