How Does A Dealer Appraise Your Car - From The Inside

In my twelve years in the automotive industry, I have learned a thing or two. I have run the pre-owned department at a car dealership for the last coming on six years, and in that time I have appraised thousands of cars.

A majority of consumers believe that there is either A. An end all be all book value for their car. Or B. That the dealer is trying to get one over on them. While the latter can certainly be the case, with todays age and the internet it is fairly unlikely.

How does your car get appriased? Well, let me show you!

As you see, it isn't just a "throw it in and theres a number" - also take note that KBB is not in the top 6 sets of numbers a dealer will generally look at. The issue with KBB is the fact that in very COMMON circumstances, it is close. In most cases, it is not. Generally, a dealer will look at MMR first, this is the average of auction transactions. Most of the time, a dealers goal will be to retail your trade -but they need what is called an "Exit Strategy" a number that if they had to send the car to the auction due to the time on the lot or lack of ability to sell the trade.

Jd Power? Disregard it - that is the number the bank will use to lend against the car, not really a valid point in most cases as it can be upwards of ten thousand off the money in either direction.

Black Book? Tolerable to look through if you average out the number with KBB - the main issue is, none of these books take into consideration the condition of the car. Do you need tires? Brakes? Is your windshield cracked or chipped? Wheels curbed? Due for service? Accident on the carfax? All of these items cost money to be completed at the dealership. Dealers don't get a free pass on work that needs to be done, and most dealers don't even have an internal discounted labor rate for service! They pay near if not the same you would pay for service.

So, looping back to the Navigator I used as an example... The car has a hit on the carfax, on a higher line car like that, it will deduct from the value alot heavier than it would that of a Kia Optima. That is why diminshed value insurance claims exist! It needs four tires, an alignment, and two wheels refinished. It has 22 inch wheels, so it will cost me $1,500 in tires, $200 for an alignment, $250 to get the two wheels refinished, & it has a hit on the carfax.

KBB Good Condition trade on this car is $43,586 as of the day I am writing this article - the car is worth $41,000.00 to me on a trade or if I were to buy it. In this instance, if the car was flawless, KBB would actually have been low for what the car is worth. But, since I have to spend over two thousand reconditioning the car, and it has the accident on the carfax, it comes in a bit lower than KBB.

On the flip side of that coin, there are the instances where a dealer may try to get one over on you, do not let it happen! Imagine if this car were perfect, and I was willing to pay $45,000 for it, but the dealer would hit you at 43k because you "went off KBB" - shop smart!

Every situation is unique, but it pays to be informed when walking into the dealership. I will always be willing to appraise your car at any given time. Just reach out, I can tell you what to expect! Working within reason will always get you the best deal!