ACtion Magazine - January/February 2014 - (Page 10)

What it's worth Setting the price and value of a used car By Keith Leonard, Esquire T he new car that you bought quickly becomes a used car in most sources of information in order to compile used car purchase data for everybody else's eyes. When it is time to sell that vehicle, both their book. They acquire such data from wholesale auctions, independent seller and buyer want to have a good idea of what the vehicle is and franchised dealers, rental ﬂeets, original equipment manufacturers worth. Remember there are actually three values for a used vehicle. There (O.E.M.s), and ﬁnancial institution lessors, as well as private party is the trade-in price, which is the price that a dealer will pay for the vehicle transactions. All of that information is analyzed by Kelley Blue Book taken in trade. A second value is the private party price, where the price is personnel along with such things as historical trends, economic conditions, determined by negotiation between a willing seller and a willing buyer. industry developments, seasonality, and location. I would guess that a The final value is retail price, or the price that a three year old Mini Cooper might inspire dealer hopes to sell the vehicle for to a private a little different interest in buyers in buyer. Philadelphia versus buyers in rural West Though I anticipated variation, For a number of years the primary source Virginia. However, not surprisingly, I did not expect the values to be relied upon to get an idea of the value of a used Kelley Blue Book claims the ultimate car has been the Kelley Blue Book. According used-car values assigned to the various this disparate. to that source, used cars are bought each year at makes, models, and years of vehicles are almost two and one-half times the rate of new determined by a "proprietary editorial cars. About one-third of the used cars bought by consumers are purchased process," or what we lawyers would call a "trade secret." from private parties, with the remaining two-thirds split between franchised While Kelley Blue Book may have been the ﬁrst recognized source dealers and independent dealers. Kelley Blue Book was initially created to for listing used vehicle prices, it certainly has competition in this serve a need of the banking and insurance industries for information on technological age. Among other sources available online are Edmunds. used-car pricing, and it was actually a trade publication for many years. com, the National Auto Dealers Associations' NADAguides.com, and According to the Kelley website (KBB.com), they use multiple YahooAutos' ClearBook. The condition and mileage of a vehicle are factors that will certainly go a long way towards setting the value of the vehicle. I appraised my car at each of those sites, at a trade-in value and a private sale value (the NADA website offers a retail value instead of a private sale value). Inputting the same information for the car at each site produced quite different results as to my car's current value. The trade-in values for the car varied from a low of $12,674.00 to a high of $15,200.00, a difference of almost twenty percent of the lowest value. At a private sale my car could fetch anywhere from $13,309.00 to $19,100.00, a difference of over forty-three percent of the lowest value. Though I anticipated some variation in the values produced for my car, I did not expect the values to be this disparate, particularly when my locale was one of the factors considered by all four sites. It appears that valuing a car can prove to be the same inexact science that valuing any other form of property is, including real estate. Potential sellers and buyers can certainly negotiate with each other and try to reach agreement on the price of a vehicle being offered for sale. However, the value of a vehicle has relevance in areas other than where an owner (or a buyer) is trying to determine the price of a vehicle for sale. In bankruptcy, the value of property that is collateral will determine the extent to which a creditor is secured and if any part of its claim is unsecured. The value of a decedent's property, including any vehicles he/she owned, will determine what taxes are applicable to the estate, as well as the amount of taxes to be paid. Thus, as Ben Franklin wrote, "Beauty, like supreme dominion, is but supported by opinion." Or, as more commonly stated, beauty (and value) is in the eye of the beholder.❆ " Reader Reply 10 ACTION * January/February 2014 Remember that laws are constantly changing and are often not uniform throughout the United States. Do not place unqualiﬁed reliance on the information in this article. Always contact legal counsel for detailed advice. If you have a particular issue, law or problem you would like to see addressed in a future column, please contact me at KLeonard@LeonardSciolla.com, or Leonard, Sciolla, Hutchison, Leonard & Tinari, LLP, 215-567-1530. http://www.NADAguides.com http://www.KBB.com http://www.ackits.com/ http://www.ackits.com/ http://www.AutoACForum.com http://www.macsw.org/imis15/MACS/Publications/ACtion_Reader_Reply/MACS/Publications/ACTION/ACtion_Reader_Reply.aspx?hkey=ac24bddb-c045-442a-813c-cbf05f88ac4d

Table of Contents for the Digital Edition of ACtion Magazine - January/February 2014

ACtion Magazine - January/February 2014
Table of Contents
Compressor installation
Meet the newest pioneers
Outlook
Freeze Frame
Leonard’s Law
Virtual View
Service Port
Last Watch
By The Numbers
Cooling Corner
Industry News
Association News
New Products & Services

ACtion Magazine - January/February 2014