How to appraise used car prices
Used car values are primarily calculated using Kelly Blue Book
. While these tools give you a good starting point for negotiations, don't expect them to be the gold standard. For a more real world vehicle price determination, consider these following factors
Usage history (rental/commercial)
Check the vehicle history report
and note if the vehicle was used as a rental or a company car. If it has, deduct 10% from the value of the car - most personal vehicle owners take much better care of their vehicles rather than rental drivers who have no incentive to drive the car smoothly. On the flip side, if a vehicle has a single owner - add 10% to it's value.
Mileage to age ratio (miles per year)
The best mileage to age ratio you should target for is 15,000 miles/year. That means if the car is 5 years old, the ideal mileage it should have is 75,000 miles. The reason for this is that older cars do rust and age even if they don't have higher miles. At the same time, cars that are driven too much might have an unconventional usage history. If the vehicle's mileage to age ratio is less than 10,000 or greater than 20,000 miles per year, reduce it's value by 10%.
Honda, Toyota (and by extension Lexus and Acura) usually command higher prices - expect to have very little room to negotiate on these brands because of the higher demand and better history of reliability. On the flip side Fiat, Jeep and Chrysler should have extremely low prices owing to their poor reliability.
Note: KBB and Edmunds already take all these factors into account - but we believe they still are not weighted enough into their valuations. That is the reason, we recommend customers use their judgement and adjust based of the above factors while buying used cars.