Before you begin negotiating, you need to determine what that used car is actually worth. NADAguides.com offers a complete used car information center where you can research the value and specifications of virtually any used car on the market today. Here, you simply input the make, model, year, trim level, mileage and optional equipment information of the vehicle you're interested in purchasing. Then, you're provided with a detailed pricing report outlining a series of valuations, depending on the year of the car.
As you will see, the NADAguides.com value report provides you with a range of valuations. For late model used cars, you'll receive an average trade-in value and an average retail value. For older model used cars, you'll receive a low, average and high retail value.
In the pre-owned world, a "retail" value is the valuation you want to use when determining what that pre-owned car is worth in the marketplace. A retail value is defined as the price a private party might be selling his or her used car for or the price assigned to a pre-owned vehicle at a used car lot. To be fully prepared for the negotiation process, it's important for you to research the retail value of the vehicle you're interested in purchasing from an independent third-party, such as NADAguides.com, ahead of time. Below is a description of what each price means as outlined on the NADAguides.com value report.
Low Retail Value: A low retail vehicle may have extensively visible wear and tear. The body may have dents and other blemishes. The buyer can expect to invest in bodywork and/or mechanical work. It is likely that the seats and carpets will have visible wear. The vehicle should be able to pass local inspection standards and be in safe running condition. Low retail vehicles usually are not found on dealer lots.
Average Retail: An average retail vehicle should be clean and without glaring defects. Tires and glass should be in good condition. The paint should match and have a good finish. The interior should have wear in relation to the age of the vehicle. Carpet and seat upholstery should be clean, and all power options should work. The mileage should be within the acceptable range for the model year. An average retail vehicle on a dealer lot may include a limited warranty or guarantee, and possibly a current safety and/or emission inspection (where applicable).
Note: Vehicles with low mileage that are in exceptionally good condition and/or include a manufacturer certification can be worth a significantly higher value than the average retail price shown.
High Retail: A high retail vehicle should be in flawless condition. All power equipment should be functional. The paint should match and have a high gloss finish. The carpet and seat upholstery should be clean and have minimal wear. The engine should start quickly and run smoothly. The tires should be like new with a spare and jack. The mileage should be significantly below the acceptable mileage range for the model year.
At this juncture, you need to assess the condition of the vehicle you're interested in purchasing and assign an initial retail value to the car based on the guidelines established by NADAguides.com (as listed above). Obviously, the seller has already assigned a value or asking price for the car, so be sure to compare the NADA retail value to the value assigned by the seller to see exactly how far apart or how close together the two valuations are.
If you think the sellers asking price is too high based on the year, make, model, trim level, mileage, optional equipment and condition of the vehicle as compared to the NADAguides.com book value of the car you have the information you need to begin the negotiation process.
Next, its a good idea for you to determine what similar vehicles, with similar features, are currently selling for in the marketplace. This is the second step in assigning a realistic market value to the vehicle you're interested in buying.
AutoTrader.com is a great place to research the price of similar vehicles with similar features. At AutoTrader.com, the worlds largest online used car marketplace, you can find out what comparable vehicles are selling for in your local market area at any given time. This information is essential in determining whether or not the used cars asking price is, in fact, over-inflated or fair. You can also research the asking price of similar vehicles in local newspaper classified ads, circulars and flyers. In addition to determining the vehicles NADA retail value, it helps to have a working knowledge of your local marketplace and the values of comparable vehicles with comparable features in that marketplace to determine exactly what that pre-owned vehicle should be worth.