3 Things to Look For in a Used Car Appraisal

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Used cars are in high demand with above-average prices higher than pre-pandemic levels, as reported by J.P. Morgan.

Because of this increased demand, car dealerships are looking to fill their lots with pre-owned vehicles. While this is a good opportunity to sell your used car, it’s also important to know what your vehicle is worth before you close the deal. On the other hand, appraisals are also just as important when you’re buying a used vehicle. If you’re in the market for a used car be sure to get it appraised before you set the sale price.

Why is it important to get an appraisal? 

Getting an appraisal before buying or selling a used car is important for several reasons. It helps avoid overpayment or undercharging and provides an accurate value for the vehicle based on its condition and history. It can also provide legal protection and ensure the car is properly insured in case of damage or theft.

The appraisal process can be tricky, but it’s too important to overlook, so we broke it down into three simple categories: the vehicle’s current market value, its history and its condition. Here you’ll learn the components of a thorough appraisal and how to find the resources you may need. 

1. The vehicle’s market value

Market value is typically based on what similar cars are selling for in the same geographic area, taking into account factors like the car’s age, mileage, condition and features.

There are several resources you can use to check a vehicle’s market value:

  1. Online classifieds: Websites like Craigslist, Autotrader and Cars.com provide a range of pricing information, including the car’s asking price and estimated value. See more online marketplaces for buying and selling used cars.
  2. Dealership listings: Many dealerships post their used car inventory online and you can use these listings to get a sense of the market value for a particular make and model. By comparing dealership prices to private party prices, you can estimate the current market value for the car you’re looking to buy or sell.
  3. Car valuation websites: Websites like Kelley Blue Book and Edmunds list the price of used cars based on their condition, mileage and other factors.

2. The vehicle’s history

Getting a vehicle history report provides valuable information about accidents, repairs, mileage and ownership. This report will help you determine a fair price for the vehicle. 

If you’re the owner of the car you’ll likely know its basic information. However, it’s still smart to get a record of your car’s history as it will help justify your asking price. If you’re buying a used car from someone else, the history report can reveal crucial information about the vehicle that you might not have known otherwise. 

How to get a vehicle history report

  1. Obtain the Vehicle Identification Number (VIN): The VIN is a unique 17-digit code that identifies the vehicle. It can be found on the driver’s side dashboard, door jamb or on the vehicle registration.
  2. Choose a vehicle history report provider: There are several reputable providers for vehicle history reports including Carfax, AutoCheck and VINCheckPro. Visit the provider’s website and enter the VIN to request the report.

What to look for in a vehicle history report

When you get the report, review it carefully for the following information:

  • Accidents: Look for information about any accidents the car has been in. This may include the severity of the accident, the extent of the damage and whether the car was totaled.
  • Repairs: Check the report for any repairs that have been made to the car, including the type of repairs and who performed them.
  • Mileage: Take note of the recorded mileage on the car and check for any discrepancies. A car with high mileage could have more wear and tear.
  • Ownership: Review the report for information about previous owners of the car. Look for any red flags. For example, a high number of owners in a short period of time could indicate that the car is unreliable or poor quality.

If there is any information on the report that you are unsure about, don’t hesitate to ask the seller for clarity. They may be able to provide additional details about the car’s history.

In addition to the items above, you may want to look into some other details related to the car’s history and condition:

  • Recalls: If the car has been recalled, it may have safety issues that need to be addressed by the manufacturer. Make sure to check whether any recalls have been fixed or are outstanding.
  • Flood damage: Cars that have been in floods may have water damage, which can lead to serious mechanical problems down the line. While flood-damaged cars can be salvaged, they often require extensive repairs and could still have ongoing problems. If the report indicates that the car has been in a flood, be sure to thoroughly inspect the vehicle before making a purchase. Learn how to avoid buying a used car with water damage.
  • Salvage or rebuilt title: Check the report to see if the vehicle has a salvage or rebuilt title (also called a “branded title”). This means that the car has been severely damaged and declared a Total Loss by an insurance company, or that the damage has exceeded what the insurance company valued the vehicle at. Salvage or rebuilt cars can be difficult to insure and may have safety issues that need to be addressed.

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3. The vehicle’s condition

The condition of a car includes everything from its appearance and mechanical state to any factors that could affect its performance. Here are some things to consider when evaluating a car’s condition:

  • Exterior condition: This includes the bodywork, paint condition and any damage, dents or scratches that the car may have. Remember to check for rust or corrosion, which can lower the resale value of the vehicle significantly. Additionally, look for any signs of repair or repainting.
  • Interior condition: Inspect the seats, carpet and dashboard for tears or stains. Test the electronics to make sure they’re in good working order. Another good rule of thumb is to make sure there are no odd smells in the car.
  • Mechanical condition: Check the car’s engine, transmission and any other mechanical components to ensure that they’re functioning properly. 
  • Mileage: A car’s mileage can also affect its trade-in value. Generally, a car with lower mileage will be worth more than one with higher mileage.
  • Service history: Look at the car’s service history to see if it has been well-maintained. A vehicle with a complete and regular service history will be worth more than one that has not been maintained correctly.

Keep in mind that used vehicles won’t be in perfect condition and it’s not always expected for a used vehicle to be like-new. The items above are important to consider, but some can be overlooked if the vehicle has had a previous owner. If you’re not confident in your ability to identify the issues, consider having a professional mechanic inspect the vehicle before making a purchase.

Whether you’re buying or selling a used car, obtaining an appraisal is crucial to ensure you’re getting a fair deal. By researching the car’s history, evaluating its condition and considering the current market value, you can determine an accurate price and avoid overpayment or undercharging.

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