How a car is valued
Cars are valued according to their year of manufacture, their condition and the amount of miles they have travelled. Car dealers use a method of assessing that the average most cars should travel is between 10,000 to 12,000 miles per year. If a car travels less than this it is classed as good. If it travels these miles it's classed as average, and if it exceeds these miles by a large amount it's classed as poor.
A dealer who buys and sells cars for a living will first of all, in his appraisal of your car, look at it's general appearance. If it looks clean and dent free, thats a good start. If your car is standard and the same as its original manufacture, that's another good point. Dealers do not like to buy cars which have been modified from standard, they are harder to sell and price.
The next item on the dealers check list is how many miles has your car travelled. The dealer would then look up the going price in his 'little black book'. (not the same as the one you can buy in your local book shop). The dealers trading book prices are a lot lower and updated monthly.
After making you a ridiculously low offer the dealer will then ask if you have all the documentation for your car including an MOT certificate. The haggling over price will now start and will be based on the car you intend to buy from the dealer. The more expensive your purchase the more money you may get for your car. It's not all as clean cut as that though, because the trading price is based on the difference between the price the dealer can get for your car when he sells it and the amount he paid for the car you are wanting to buy.
Meaning of terms
Listed below are some of the terms that are used by dealers who sell and buy cars. Some of the terms are also used by 'part-time' people who sell cars from their home. You need to understand these terms before you go into a deal. Not understanding the terms fully could have serious mis-understandings when haggling over a price of cars.
Original price of cars
Manufacturer's list price when new, including VAT and Car Tax not road tax, it's a special tax applied on all new cars. This is the price paid by the first owner of the car.
The typical price paid at a franchised dealer for a car in a 'Used Approved' scheme. is possibly lower than the price on the windscreen shown at the dealer because the dealer would have increased the 'screen' price so that some negotiation can take place when you decide to buy the car. A franchise dealer is a dealer who exclusively deals with a large car manufacturer i.e. Ford, BMW, Audi etc.
Typical price paid for the car at an independent dealer or car supermarket. Prices are slightly lower than main dealers because you don't get all of the 'Used Approved' benefits. This type of dealer may or may not offer you certain benefits, but they would usually be added on as extra's. An independent dealer is a dealer who sells and buys any make or model of car and has no contract with the large car manufacturers.
Typical private sale value of a car in good condition with full MOT and service history, needing no work. With a private sale you will be getting exactly what you see, no benefits or guarantee. Once you pay your money and drive away you are on your own. This is why the price is usually lower on the private sale.
Beware of buying from a private seller
Typical private sale value of a car in below-average condition, which cannot be restored to clean condition. May have mechanical defects or no service history; body may be rusty or have substantial damage; interior may be stained or torn.
The typical 'bottom-book' (the book dealers refer to value a car) price that a dealer offers for your car in part-exchange. The actual value can vary from deal to deal, depending on the price and desirability of your car, but this is a good indicaton of what to expect.
Tips for buying cars
1. Never seem enthusiastic
2. Never take the family
3. Always say you are shopping around
4. Do your research - know the cars value
5. Ask for road tax to be included
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