How to Set the Asking Price for Your Used Car
If you set an asking price too high, you may not get any responses. On the flip-side, you don't want to short-change yourself by pricing it too low either.
If you want to do it right, your first step should be to figure out the wholesale value of the vehicle. This is the price dealers are willing to pay for it.
The only way to figure this out is to shop it around to at least 3 dealers using our trade-in shopping guide. Only then will you know the true wholesale value. (Note: don't rely on pricing guides to give you a realistic wholesale price. They're a good starting point, but can be off by up to 15% depending on local market conditions).
Figure that you'll spend around $100 on classified ads and several hours responding to and meeting with prospective buyers, so you'll want at least $750 to $1,000 more than wholesale value to compensate you for the added expense and time.
If you're planning on buying a new car and you live in a state that provides a trade-in tax credit (see list here), you need to factor that in as well. For example, on a used car worth $10,000, the trade-in tax credit can save you up to $1,000 - but this is only available if you trade-in the vehicle at the same dealership where you buy a new one.
Add these figures to the wholesale price to come up with the minimum price you should accept from a private party. Important: this is not your asking price, but merely the lowest price you're willing to accept.
To figure out your asking price, we recommend you check out car listings at CarGurus.com. They calculate the average asking prices for over 3 million vehicles that are currently for sale.
Figure out the average asking price for vehicles that are similar to yours in year, style, and mileage. Next, find the highest asking price for a similar vehicle in your region.
Your asking price should be somewhere near the middle between the average and highest listed price. Use some common sense here - if the highest listed price is ridiculously high, use the next highest price, or average the top 3 highest prices to come up with that figure.
This method gives you a simple and quick way to price your vehicle based on real local market conditions. It also sets a minimum price you're willing to accept - ultimately helping you with your negotiations when prospects begin responding to your ad.
3 Steps Every Car Buyer Needs to Take to Save Maximum MoneyThe key to getting the best deal is to gather price or lease bids from as many local dealers as possible. Then shop that best price around until no one can beat it. Here are the steps:
Step 1 Get Prices From My Trusted NetworkSelect the vehicle you're interested in to see if there are local dealers in my network who will provide you with their best upfront price. You will get direct access to an internet sales manager who you can further negotiate with online (no need to visit dealership).
Step 2 Get Prices From TrueCar / CarsDirectTrueCar, and CarsDirect are my top 2 online price quote recommendations. These services show you pre-negotiated prices from dealers closest to you - and the deals are usually pretty decent. But remember, you can still negotiate further.
Step 3 Complete my ChecklistFollow this up with my checklist to make sure you squeeze out every last bit of savings.
- Gregg Fidan
Each week, I'll keep you up-to-date on the latest car deals and news that might affect your purchase. This includes...
- Best Rebates, Incentives, and Lease Deals
- Latest Car Buying Scams and Tricks
- The Best & Worst Time to Buy a Car
- Which Cars You Should Avoid