A Guide to Car Appraisals
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If you are a car owner, sooner or later you will most likely want to upgrade. Nowadays, you don't always have to buy a car new. Used cars can be a great alternative and a lot more affordable. Before you buy a used car however it is important to get the vehicle appraised. The same goes for selling your current vehicle. If you want to make sure you get the most for your car you will need an accurate car appraisal. Most car buyers will want to see the appraisal before committing to the purchase as well. So, what exactly is a car appraisal then? This article is a guide to everything you need to know about car appraisals.
What is a car appraisal?
A car appraisal is a fine-tuned process, designed by the auto-manufacturing industry, to help car buyers get an accurate view of used cars. When you buy a new car, it comes with a manufacturer's suggested retail price. A used car doesn't have this. You need a car appraisal to ensure you get the best price.
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7 Factors that affect a car's appraisal
Like with everything, there are different factors that will affect a car's appraisal. The most common factors that impact a car appraisal are:
- The Model -Different cars have different values.
- The trim level- The trim level is different levels of the same model. Some trim levels have more equipment than others which can impact the price of the appraisal (Hearst Auto Research, 2020).
- Mileage - The more mileage a car has the lower the car appraisal will be. When searching for a used car, buyers tend to gravitate towards lower mileage because it means the car has the potential to be in better condition. The US Association of Transportation states that the average yearly mileage usage is roughly 14,000 miles. If the car has more than this average at the time of the appraisal, the appraisal will be lower (US Vehicle-Miles).
- The condition - No one wants to buy a beaten-up, broken vehicle. Usually, you can tell if there are any problems on the outside of the car just by looking but a car appraisal will confirm that the car is working properly and is in good condition.
- Local market supply and demand - If the market is at a scarcity of cars like the vehicle getting appraised then the price might increase because the demand is high. Likewise, if there are a lot of the same kind of vehicles available the price might decrease to get merchandise moving.
- Your Location - Where you are purchasing a vehicle can impact how much the vehicle can cost. If the city or town you live in has a high car market value, then chances are you are going to pay more compared to another location that has a lower market value.
- Who is buying your car - Different buyers, depending on what they want to do with the car, will pay different prices.
There are a lot of different factors that can affect a car's appraisal but thankfully there are companies that will help you figure out everything you need to know.
Different Kinds of Appraisals and How to get your car appraised
There are three main ways you can get a car appraisal done: a lender appraisal, through a website/guidebook appraisal company, or with a dealership appraisal. If you are still determining which one is the best fit for your situation start by completing a website appraisal. A website appraisal is free and a good way to get to know the market value of the vehicle you have or want. It will give you a baseline to work from when you go to buy the car you want.
Here are some reliable resources you can use to estimate a car appraisal:
A dealership appraisal happens at the dealership you choose to work with. The company will complete it for you and then show you, their offer. Never take the first deal! Always compare the price given by one dealership to other prices given by other dealerships. This is a great time to negotiate so both parties can be happy.
A lender appraisal is used if you are trying to apply for financing outside the dealership. Again, this appraisal can be useful for negotiating. Sometimes this service can be found for free but other times you have to pay a fee.
Used Car Appraisal Strategies and Cost of a Bad Appraisal
Before you go car shopping it is important to have an appraisal strategy. Without an understanding of the value of the car you are looking at, you could easily pay too much for a car or charge too much to make the deal. A bad appraisal, meaning an inaccurate appraisal, directly impacts the success of your car selling/buying experience. Whether you are buying or selling a vehicle an accurate car appraisal is essential. Here are some tips to help you optimize your car appraisal process.
Do your research on the product.
Before going anywhere, research the average clean market value of the car you are looking to purchase. Keep in mind all the different factors that affect a car appraisal and try to establish a baseline.
Research different dealerships.
Another great way to optimize your car appraisal process is to get different opinions from different places. Ask around dealerships and see who is offering the better price. You can use this to help negotiate when you are ready to purchase.
Set a price margin.
Before going into a negotiation set your bottom line and price goals. Start low but factor in a price adjustment.
Remember you are buying a USED car.
Because you are buying a used car the vehicle is not going to be perfect. Of course, you want it to be in good condition and last you a long time but recognize that the car might have some bumps and bruises. A condition on the outside of the vehicle might impact the price but have no effect on the functionality of the car.
The importance of car appraisals
Overall, car appraisals are the key to having a successful buying or selling experience. They are great negotiating tools and can also give the buyer peace of mind about the quality of their purchase. Without a car appraisal, you will have a very hard time completing any transaction. Just remember, never take the first deal, do your research, and don't forget to compare all your options. The right deal is out there, you just have to find it.
References:
Determining your car's value and cost of repair. III. (n.d.). Retrieved December 1, 2022, from https://www.iii.org/article/how-are-value-my-car-and-cost-repair-determined
Diver, C. (2022, January 30). A guide to car appraisal. Credit Karma. Retrieved December 1, 2022, from https://www.creditkarma.com/auto/i/car-appraisal
Kielar, H. (2022, October 31). What is a car appraisal? Rocket Auto. Retrieved December 1, 2022, from https://www.rocketauto.com/research/selling-a-car/what-is-a-car-appraisal
Research, H. A. (2021, November 29). Car insurance appraisal: Everything you need to know. Car and Driver. Retrieved December 1, 2022, from https://www.caranddriver.com/car-insurance/a36267902/car-insurance-appraisal/
Research, H. A. (2021, November 29). What do car trims mean? Car and Driver. Retrieved December 1, 2022, from https://www.caranddriver.com/research/a32766780/car-trim/
The strategic approach to used car appraisal. VINCUE. (2021, February 15). Retrieved December 1, 2022, from https://vincue.com/knowledgebase/strategies/car-appraisal-strategy/
U.S. vehicle-miles. U.S. Vehicle-Miles | Bureau of Transportation Statistics. (n.d.). Retrieved December 1, 2022, from https://www.bts.gov/content/us-vehicle-miles
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