Buying a car might be exciting. At the same time, getting rid of your current one can be stressful. Before entering into any negotiations over the price, it’s important to know the true value of the vehicle. The most important step here is determining your vehicle’s condition.
Determine the right value
Pricing a car is tricky but there are two websites that can help you determine its fair value: kbb.com and Edmunds.com: the car’s trade-in worth, its private sale value, and how much the dealer could expect to sell it for. Avoid competitive pricing with newspaper and online classifieds.
Define the car’s condition
Before you determine your car’s value, objectively define its condition. You can use a rating with stars (excellent, good, average, rough and damaged condition). You can also have a friend inspect your car as if he or she was going to buy it.
Seeing the differences in what you can charge based on conditions, you might be tempted to slightly overstate your prices. Don’t do it.
Setting a private party price
The private party price is what you hope to be able to sell your used car for. Once you've classified your car and come up with a price, add at least 10% to it. This is going to be your wiggle room. Now that you know what your car is worth, allow yourself some space to be negotiated down on the price. The consumer is going to be the ultimate arbiter of your car's value.
Setting a retail price
The retail price is what you can expect to pay for a used car from a dealer. Determine what you're willing to pay retail by adding 20% to the private party price.