Know the Book, Trade, Retail and Market Value of Your Car

What's a used car worth? Get an instant report today on Trade values, Retail values & historical transactions.
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kingr
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Know the Book, Trade, Retail and Market Value of Your Car

Post by kingr »

Know the Book, Trade, Retail and Market Value of Your Car

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Many car owners mutter about “book value” when it comes time to selling their car, and previously book value was all you could expect from your insurer in the event of a write-off. But what is book value? And what is your car’s trade and market value? There’s a difference, although sometimes terms are used interchangeably, but erroneously. What is book value?

A car’s Book Value

Anytime you speak of the “book value" of your car, it refers to a national average value placed on your particular car when it’s traded or sold. A baseline tool of dealerships, this is where the term abounds and the book value or trade value of your car is the principal determinant of price when trading in or selling your car outright through a dealership. Book value is an industry guideline based on the current, average price paid for your make and model. Book value is referred to as a “guideline” as several other factors will impact your car’s ultimate value. High mileage impacts the average value, as does wear and tear, the age of the car as well as factored-in depreciation, demand for your particular car (popularity) and, lastly, broader economic realities like inflation and momentary slumps or peaks in the national economy.

When you consider the variance possible when factoring in the above considerations, it can be easily seen that book value is a recommended transaction price only. Although it’s unusual to sell way above book value, very often poorly maintained cars or those with extensive mileage or accident scars will more usually sell well below book value. Book value is a guideline - an essential one - but it isn’t necessarily the market value of your particular car. That said, it is synonymous with “trade-in value” or “trade value” - the price you can normally expect for your car in acceptable, anticipated condition when selling to a dealership. The book or trade value of a car is based on a frequently updated industry guidebook. In as simple a phrase as possible, book value is what a dealership will pay you for your car.

Retail Value

Retail value is not market value. Many car owners confuse these terms but they are certainly distinct, for the following reasons. Retail value is typically higher than market value. It is the average price a dealership would resell your car for, all things being equal. Were you to walk into a dealership looking for a new or used car, retail value is what you’ll pay.

Retail value seldom determines outcomes between a private seller and private buyer and is more encountered in the retail environment, of course. It helps to know the retail value of your car as, when selling or replacing, that information can be used to determine a fair price for all parties concerned. That said, don’t forget that private sales are not retail sales and if you stick to a retail price when selling privately, no buyer will have any good reason to buy from you, an individual, when they can pay the same price at a dealership but get a host of added benefits private sellers can’t offer.

If “book value” is what a dealership will pay you for your car, “retail value” is what you can expect to pay when browsing for cars on the dealership’s shop floor.

Related: Know your Retail value

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Market Value

The market value of your car is what you’ll aim at when selling privately. In a nutshell, very much like certain items on earth sell for way above their obvious, core value (limited edition items and other collectibles, for example), a car’s market value is what the market will pay for your car, regardless of what the manufacturer establishes as the average retail price. Some variables are factored into a car’s market value, such as personal mods, mileage, the overall condition of the car and whether or not it’s accident-damaged.

Market value is what you’ll aim at when selling your car privately. In an exaggerated example, you might fetch R150.000 for your lousy old 1970s Volkswagen Beetle, which has a book value of just about zip, simply because it’s an original and becoming a collectors car. It cuts both ways, however, as buyers will also manifest “market value” by considering the sale car’s negatives as well. When selling privately, market value is what you can expect for your car. It also factors in the buyer’s immediate needs, hesitance to buy quickly or, conversely, happiness to settle on your car without too much further looking.

By way of further examples, the retail value on a 2011 Ford Focus RS sits around R340,000, but the market frequently offers R390, 000 - R450,000 for this car, a case of market value exceeding retail value. Similarly, something like a 2014 Peugeot 208 might retail for over R200,000, but based on market sentiment towards the brand and other factors, private sales rarely approach that figure, even for models in great condition.

Auction Value

Another popular route to selling cars is via auction. It’s fair to say, however, that this arena is populated with bargain hunters and, unless you place a reserve price on a car you’re auctioning, while you should experience “market value” offers on auction, it remains very variable. Depending on buyers on the floor that day, the overall perception or reputation of the auction house as well as other factors, auction prices can be very skewed, away from the market and even book value of your car.

When selling on auction, don’t expect fireworks. Most auctioned cars are there to facilitate a quick sale for the seller facilitated by a cheaper price for the buyer. It’s much better to allow car trading professionals to manage the sale of your car for a nominal fee. Auction houses also don’t care much for retail presentation and, along with the broad perception of auctions meaning bargains, you’re unlikely to get a price for your auctioned car that makes you feel warm all over. The “auction value” of your car is the most variable and difficult to pinpoint evaluation of your car, simply because of the huge variables at play in that arena.

Insured Value

A final point worth considering: in years gone by the only real value you could expect from your insurer in the event of the car being written off, was book value. Clearly open to leaving users with a large gap to fill in order to replace a now stolen or written-off car, this has changed. The insurance fraternity will now peg other values as an option for their clients. In other words, you can now insure for book value or retail value, and everything in between. Most insurers will nowadays offer insurance tied to the retail value of your car, as this is going to be the smoothest, most enabling payout in the event of loss. “Smooth” as in, the amount you receive will most capably allow you to replace the car that was lost without compromising on the echelon it occupied. Premiums are a consideration of course, but it has become obvious that insuring for book value - especially if you’ve hung onto a well-maintained beauty for some years - often leaves a large shortfall in your ability to replace the car you had with the insurance payment.

Still confused? Just don’t feel like factoring in all of the variables when selling your car? Why not trust Wheel Index to sell your car on your behalf. For a very small fee, we’ll handle the entire sale - A to Z - and make sure you get a good, legitimate price for your baby.
Kurt #3337

Current:
- 10" Mx5 NC2 (main daily)
- 12" Toyota Hilux D/C 2.5tdi 4x4 (tow car / vacay)
- 2020 Mini Cooper S Clubman (swambo)
- 80" VW Mk1 2 Door Golf 8vt project 192wkw/314nm

Ex: 07" G5 GTi, 13" ST180, 03" Mk4 2 door 1.8T Stage 2, 07" Velo 1.6, 83" Mk1 GT 2.0 8v MP9, 87" Mk1 1.6 CitiSport, 88" Mk2 2.0 16v, 83" Mk1 GT 1.6 + 40 webers
golfer23
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Re: Know the Book, Trade, Retail and Market Value of Your Car

Post by golfer23 »

trying to get a value off website, site is hanging. you guys down?
i got an account, and purchased a valuation before.

it was for a 2008 bmw 325i coupe m sport. these are the values i got.
Retail Estimated Value:
R 139 700,00
Retail Estimated Low Value:
R 126 200,00
Retail Estimated High Value:
R 154 700,00

so, im looking at another one, same, but a 2009. i would like to simply know how much is the price difference.
i tried putting in the vin number, like i did with the car above.
".......life moves pretty fast, you don't stop and look around once in a while, you could miss it......" Ferris Beuller
User avatar
kingr
VWCSA Member
Posts: 3394
Registered for: 16 years 7 months
Car Make: VW, Mini, Slowyota
Car Model: Mk1 2 Door, Hilux D/C
Membership No: 3337
Location: Groot Gat

Re: Know the Book, Trade, Retail and Market Value of Your Car

Post by kingr »

golfer23 wrote: Thu May 10, 2018 9:46 am trying to get a value off website, site is hanging. you guys down?
i got an account, and purchased a valuation before.

it was for a 2008 bmw 325i coupe m sport. these are the values i got.
Retail Estimated Value:
R 139 700,00
Retail Estimated Low Value:
R 126 200,00
Retail Estimated High Value:
R 154 700,00

so, im looking at another one, same, but a 2009. i would like to simply know how much is the price difference.
i tried putting in the vin number, like i did with the car above.
Hi golfer23,

Apologies for the late reply. Did you manage to create another report? We could possibly have had a issue on the day you tried, but we are all systems live now.

You can email us at support@wheelindex.co.za if you need any further assistance.
Kurt #3337

Current:
- 10" Mx5 NC2 (main daily)
- 12" Toyota Hilux D/C 2.5tdi 4x4 (tow car / vacay)
- 2020 Mini Cooper S Clubman (swambo)
- 80" VW Mk1 2 Door Golf 8vt project 192wkw/314nm

Ex: 07" G5 GTi, 13" ST180, 03" Mk4 2 door 1.8T Stage 2, 07" Velo 1.6, 83" Mk1 GT 2.0 8v MP9, 87" Mk1 1.6 CitiSport, 88" Mk2 2.0 16v, 83" Mk1 GT 1.6 + 40 webers
golfer23
Lieutenant
Posts: 1057
Registered for: 15 years 11 months
Car Make: BMW
Car Model: E82 125i COUPE
Membership No: missing
Location: CAPE TOWN
Contact:

Re: Know the Book, Trade, Retail and Market Value of Your Car

Post by golfer23 »

kingr wrote: Tue May 22, 2018 11:04 am
golfer23 wrote: Thu May 10, 2018 9:46 am trying to get a value off website, site is hanging. you guys down?
i got an account, and purchased a valuation before.

it was for a 2008 bmw 325i coupe m sport. these are the values i got.
Retail Estimated Value:
R 139 700,00
Retail Estimated Low Value:
R 126 200,00
Retail Estimated High Value:
R 154 700,00

so, im looking at another one, same, but a 2009. i would like to simply know how much is the price difference.
i tried putting in the vin number, like i did with the car above.
Hi golfer23,

Apologies for the late reply. Did you manage to create another report? We could possibly have had a issue on the day you tried, but we are all systems live now.

You can email us at support@wheelindex.co.za if you need any further assistance.
hi, i bought a totally dif car. cheers.
".......life moves pretty fast, you don't stop and look around once in a while, you could miss it......" Ferris Beuller
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