Have a question when buying a used car from a private seller

Didn't want to highjack a thread over in Q&A so I thought I'd ask here.

Have a question when buying a used car from a private seller? How much more is a used car worth than the trade in value?

I know you can get the usual "blue book" quotes but one reason I see why a lot of sellers private sell is to get more than the trade in value. But if you were to buy the sellers car after they traded it in you would get some kind of dealer "warranty" that would at least cover some hidden problem if it would rise. I would guess the real value lies somewhere between the trade in value and the dealer mark up when they put it on their used car list? But I don't know?

Buying a used Hellcat from a private owner at full blue book pricing seems to be a risk (IMO) unless you know the seller very well.

Mike

No exact formula that I know of.
Trade-ins - if not wholesaled off - have recon expense & profit margin to add for the Used lot.
So trade-in value depends on desirability, condition & mileage like a private sale, + expenses, = usually some lesser #.
Advantage to dealer is financing, for those who need it, and they'll pay up front via higher purchase price for that convenience.
I've never had any free dealership warranty on a used car, but I've bought only a couple from dealers, last time around 2004.

FWIW, I've seen cheap body repairs on used cars that made me want to puke.

The guides have the trad in value, then the private value, then the dealer mark up retail price. That gives you roughly the info you are wanting to know right there. Any “free” warranty is built into the dealer profit reflected in the spread you’ll see in those numbers.

All evaluations (no matter the source) are guides and nothing more. They all have different scales to apply for their guides. And not all the evaluation guides agree on a given vehicle.

In other words, there is no one magic number for a used vehicle whether private party or dealer. Some folks will only buy from an owner, while some folks will only deal with a dealer; financing, insurance, 100 point check, warranty, etc......

And right now, used are coming down at a noticeable clip. The market is adjusting. Some guides have a value tracker so that you can see how your particular vehicle is trending. That would be particularly helpful right now. That is, if you can wait.

Unfortunately, as I've learned as of late KBB and NADA is merely only a suggestion at values with regards to private sells. Some people will still go off of it but, the prices will also vary upon the location as well dependent on what type of vehicle it is. The unfortunate reality in this current market is that if you're not willing to pay full KBB and dependent upon location then someone else probably will and will pay more than what the loan value is in on a vehicle as well.

Depends on the deal, the dealer and how much they're soaking you for the new car.

When my buddy was still in his store, I told him - just tell me the difference. Make both numbers as low as you can so I don't have to pay all that sales tax. Knock enough off the new truck and I'll give you mine.

Didn't quite go there, but we both got a deal.

Used car market is screwy right now. I hear the bottom is falling out after being sky high for so long. Except for trucks.

anymore, most individuals will ask [sometimes way] more than they can get for a trade in, especially if the vehicle is a desirable model.
and has been already said, location [location, location] is also a determining factor on price.
sometimes, people will ask a [somewhat] lower price just to avoid the [perceived] hassle of trading in a vehicle at a dealer.
once again, this can be the location. in other words, individual lives several states away and would rather fly in and drive home instead of driving [sometimes many] hundreds of miles with a trade in.
just my opinion and experience buying and selling vehicles over the years.
i don't do much of that these days, in fact, i haven't sold a car in years, although i may have one on the radar now. it's a [roughly] 500 mile distance from me, but can't be driven because a dead center deer hit took out the radiator. i believe i can repair the damage very easily, then ask a below book price and sell it quickly. The car belongs to my sister, and my brother in law was driving to work one morning when this happened. the insurance company paid the claim but didn't want the car and told her to keep it, so it has a good title. it has been sitting in their one garage since the accident, so it hasn't gone downhill since.
i have been thinking of contacting rhinodart to see if he could possibly be in the neighborhood to pick this up and deliver it to me.
however, i'm afraid to cost him another transmission..............

'Bottom falling out' might be a bit too strong to describe what is happening right now, but vehicles are declining. And, of course, the decline is not evenly spread across all brands and models. Most trucks are sliding some, too.

Look at the auctions going on right now, there is no sanity in any used vehicle market at the moment, throw all the guides out of the window, even the NADA style guides, reality went out the window over 2 years ago. The only thing I know right now is that both parties need to be happy...

Fires at 3 large “chip” factories overseas really screwed up both the new, then used vehicle USA markets.

Cavanna failure latest victim, but there will be others.

Change in subsidies for new EVs based on where lithium. battery factories are, and what countries supply basic materials
latest multi billion $ worldwide issue.

Is it really a good business practice for any road vehicle to get some taxpayer subsidy?

Cash for Clunkers and deliberately freezing up a running engine.

Present day laws make Cash/Clunkers look like loose pocket change

But the deepest hidden $ issue is:
What MPG would current vehicles get if emissions laws did not exist?

Another deeply hidden issue:
what would the tailpipe emissions be of a vehicle engineered for maximum fuel economy only?

One has to simply look at what new costs to see why buying used is still huge. The Hellcat, SRT, Scat Pack cars are bringing money now due to them being killed off.

I've always used VMR as a "guide". The "wholesale" is the price you'd pay in a private sale with no warranty. "retail" is obviously just that. Its a GUIDE.

http://www.vmrintl.com

I wouldn't be too quick to 'throw all the guides out of the window'. While you may not put much credence in them, banks, credit unions, and insurance companies still do. It's all they have. And many (maybe most) folks will need one or more of them during their time with the vehicle.

Like so many things, the auto industry is going through some significant changes. Not every entity will survive. But with any chaos, comes opportunity. And as such there are many entities that are in fact, thriving. And probably all of them are using, at least to some extent, the evaluation guides.

And for the most part, what have been referred to here are the 'retail' or 'consumer' guides. But the most reliable guide for wholesale information on vehicles is the Manheim Market Report. We always refer to it before any purchase.

I look at the spread between what the dealer offers for a used car and what they try to flip it for. I've had dealers offer me $6000 for a used car when they had a very similar car sitting on their lot with a $10,000 price tag. In that case I think it would be a good deal to list it for $8000 myself. I get more money in my pocket and the buyer saves money and the dealer gets nothing.

When I bought my 17 3500 they basically told me to keep my 01 as they’d only give me 6k for it. Some people (like myself) do not enjoy the “selling experience”. I sucked it up and put it on marketplace. Waded through the piles of messages of offers until a buyer from Michigan stepped up and didn’t haggle about price at all. Only thing was he wanted me to get it to Phoenix where a friend of his would check it out for him (3hr drive for me). Well I can always visit my parents there so I made the trek and his buddy looked it over and paid me on the spot. $17,500 for a 21 year old pickup 200k miles.

Not sure about other states but in Arizona you pay sales tax on the difference between the price of the new car and the trade in amount. So if you sell your car outright for what the dealer offers you lose money.

Here in wonderful Michigan, every time a vehicle gets sold, no matter how many times, we get nailed for the full sales price.

I believe Michigan allows up to a $7,000 credit toward the sales tax on the new car, based upon the value of the trade in.

It is only worth what someone is willing to pay for it
Limited market for those cars, especially in today's market: work:
What shape and amount of miles on it now?

Lots of used hellcats for sale, find one that was garaged and babied as a lot are the exact opposite of that, raced, thrashed, donuts, winter driven, cheesy aftermarket wide body kits etc.

Exactly!

The books are all a guide, not a Bible.
And as a dealer, I have yet to see any softening of prices since Covid hit. There is less selection of used cars, and the nice ones do all the money.
I tell people all the time, if the price I pay to advertise a unit isn’t good/ competitive , you wouldn’t be here. Cars would sit around and rot, nobody comes, nobody calls.
I see stuff all the time that approaches and or exceeds retail, at dealer auctions. Then you have auction fees and transportation and servicing on top of that..
We have had a hard time keeping as much inventory on hand as we have in times past. It’s just hard to find stuff that leaves enough meat on the bone to where everybody wins..

Now on average is the selling price of a used vehicle by a dealer (or private individual) slightly higher than the "blue" book ("guide") values with the current market or the same or even less?

The true actual value of any vehicle is what somebody it willing to pay for it. Vehicles in high demand in excellent condition usually bring a higher value and higher profit margin than those that are not. That's why it's tough to discuss this in generalities. Those that have access to the Manheim auction reports have seen that over the last several months, used car prices have decreased between 10 and 15%. The hard and fast rules of value OP is asking for just doesn't exist.

Ah "OP" that would be me

2 weeks ago a lady that works with my wife was offered.
4K trade in at dealer she got her new car at. Carmax gave her 6K, and her husband said private seller buyer would be 8K if cars,was 100 percent and it had some stuff that needed addressed s.
I guess Carmax was,spot on.bet they put it at 8-8500 on the lot and fix a few small things

I also wondered how pricing is being done these days as some of what I see has been pretty crazy since 2019. Seems like if you wanted to take out a loan at a bank by yourself you would have to convince the bank of the street value in real time vs a guide that may not reflect what is going on out there.

Like how does the local Dodge dealer buy back a used low mile 2019 Challenger R/T they sold a guy I know for even more than he paid for it about a year later. Then the dealer resells the same car they bought back again for even more money as they had a buyer lined up for a clean used one. Then this guy who sold the dealer his car back takes that money and buys a clean used Challenger T/A at a different dealership for almost nothing more out of his pocket. Two cars traded hands and the 1st dealer made out, and the guy got a better performance model Challenger for almost a wash. 1st dealer swung for the fences on the R/T and found the right buyer and the other dealer may have gave the T/A away too cheap?

If NOX standards disappeared overnight so would EGR systems, A/F ratio at cruise would probably go lean a couple points and compression ratio would go up at least a point on almost every engine and some would go up 2 points or more and would all probably result in at least 10% MPG jump and probably more likely 15%. CO, CO2 and HCs all tend to go down when efficiency goes up but cats would be ditched and so the actual tailpipe emissions would go up even with less of them coming out of the engine itself. I don't think modern cats cause enough flow restriction to make much difference in performance or MPG but they don't like running lean so they would have to go in an all out MPG search.