How to judge a used-car asking price before you drive out to see it
Age, mileage, history and condition explain most of what a used car is worth. How to weigh each one from a listing, and the questions that settle whether a low price is a bargain or a warning.
Shopping for a used car means comparing things that are not quite alike. One listing is two years newer, another has 30,000 fewer miles, a third is cheaper and has a gap in its history. The asking price is only meaningful against what you get for it. Four things account for most of a used car's value, and all four can be judged from a listing and a few questions before you spend an afternoon on a test drive.
1. Age
A car loses value fastest when it is new. The first three years typically take the largest share, and the curve flattens after that. Two consequences follow. A car that is three or four years old has already taken the steepest loss, which is why that age is often good value. And at the old end, a year makes little difference: the gap between a twelve and a thirteen year old car is mostly about condition.
Check the model year against the generation of the model as well. A car from the last year of an old design is usually worth less than one from the first year of the redesign, even though they are a year apart.
2. Mileage
The usual yardstick is 12,000 to 15,000 miles for each year of age. Multiply the car's age by that range and compare. A five year old car with 40,000 miles is low. The same car with 110,000 has done the work of an eight year old.
Mileage matters most where it crosses the expensive services. Many cars have major scheduled work somewhere between 60,000 and 100,000 miles, such as a timing belt, transmission fluid, spark plugs and suspension parts. A car priced low just before that work is due is not cheaper than one priced higher just after, with receipts.
Very low mileage is not automatically good. A car that has covered 2,000 miles a year in short trips may have old tyres, old fluids and a tired battery. Ask how it was used.
3. History
Ask for the vehicle identification number, the 17 character VIN, before anything else. A seller who will not give it has answered a different question. With the VIN you can buy a history report and check for open safety recalls free of charge on the national highway safety agency's website.
Read the report for four things:
- Title status. A salvage, rebuilt, flood or lemon-law title cuts the value sharply and can make the car hard to insure or resell. A low price on a branded title is the market being accurate.
- Accidents. A minor repair done properly matters little. Structural damage or an airbag deployment matters a great deal.
- Number of owners and where the car lived. Coastal and snow-belt cars rust. Several owners in a short time suggests a problem being passed along.
- Odometer readings over time. They should only rise.
Service records are worth real money. A folder of receipts showing oil changes at regular intervals tells you more about the next 50,000 miles than the odometer does.
4. Condition
Photographs hide what they are meant to hide, so read a listing for what is absent. No picture of the driver's seat, the dashboard with the engine running, or one side of the car is a reason to ask for it. Tyres are a quick tell: four matching tyres with good tread suggest an owner who maintained the car, and a set of four can cost several hundred dollars to replace.
For any car you are serious about, pay an independent mechanic for a pre-purchase inspection. It usually costs between one and two hundred dollars, and it either finds nothing, which is worth knowing, or finds something that pays for itself many times over in the negotiation. A seller who refuses an inspection has, again, answered a different question.
Putting a number on it
Find five to ten listings for the same model, within a couple of years and a reasonable distance, and write down the price, year and mileage of each. The pattern appears quickly: what a typical example costs, and how much the market adds or takes away for each year and each 10,000 miles. Now each listing can be read against the others. One priced well under the pattern needs an explanation, and the explanation is in the history or the condition more often than in the seller's generosity.
Trim level and options move the price less than sellers hope. Private sales are normally cheaper than dealers, because a dealer's price includes reconditioning, overhead and sometimes a warranty.
Compare the price you will actually pay
The advertised price is not the cost. Before comparing two cars, add:
- Sales tax, registration and title fees, which depend on where you live.
- Dealer fees. Ask for the out-the-door price in writing and compare only that.
- Work the car needs straight away: tyres, brakes, an overdue service.
- Insurance, which can differ a good deal between two similar-looking cars.
- The cost of borrowing, if you are financing. A lower price at a higher rate can cost more.
The short version
Decide on the model before you look at prices. Gather enough listings to see the pattern. Get the VIN and the history before you travel. Rank what is left by price against age and mileage, drive the best two or three, and have the one you want inspected. The car worth buying is rarely the cheapest one in the search. It is the one whose price is fair for what it is, with nothing in its history that needs explaining.