Used car buyers often are concerned that their potential used car, SUV, truck, or minivan is priced incorrectly. Unlike new cars with manufacturer suggested prices, used car prices are dependent on many aspects of the car’s age and state of repair. There are also additional questions: What make and model do you prefer? Where should you purchase a used vehicle? What should your budget be?
We are here to help with some guidelines to help you determine used car market value.
How Much Does A Used Car Cost?
A used car’s value is determined using a complex variety of elements, meaning that any small change in the car could result in a slightly different price across different dealerships or sellers.
- Age – the longer a car has been around, the more wear-and-tear has occurred, reducing the value of the car.
- Mileage – slightly different from age, more mileage is related to how much the car has been driven and the wear and tear that occurs specifically through being on the road and operating the engine. Typically, higher mileage will reduce a used car market value.
- Make – cars age differently, so different makes and models are going to have different resale prices as used cars. Some makes and models maintain more of their value than others.
- Condition – this can be the most difficult to gauge element of the car. A bad paint job will have a different impact on the car’s price than mild rusting, as well as a variety of other potential condition changes.
How to Determine Your Budget for a Used Vehicle
The choice of how much to spend on a used vehicle does depend on whether you plan to get a loan or buy outright.
- When purchasing with a loan, you want to be able to afford your loan and have a hefty down payment of about 20%, and you should be able to pay it off within 4 years. Calculate your budget based on about 15% (or less!) of your monthly income with these stipulations.
- If buying outright, budget for your purchase based on your current savings for this purchase, and consider how not having those savings will impact your lifestyle. Consider whether you are in debt or have an emergency fund saved and whether this car is expensive in upkeep as you make your budget.
Trade In Value
One important way to defray the cost of a used car is by trading in your current vehicle. Typically, the value of your used car will be subtracted from the price of the vehicle you are purchasing to bring the overall cost down.
If you decide to trade in your vehicle, it is valuable to research the market value of your used car to ensure you get a fair offer on the exchange. At Royal Automotive, you can use the easy online trade-in value calculator before you even come to the store, so you are better prepared.
Work with Royal Automotive to take the guesswork out of purchasing and trading in a used car! If you have more questions about how much a used car costs, please feel free to reach out as well.
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