When used car dealerships offer you a trade-in, it is rarely as simple as taking your old car, running a few numbers, and getting the best price back almost instantly. Genuine dealers will only absorb those cars that are still in healthy functioning condition as they will want to maintain the quality benchmark of their entire lot and sell only good used cars to their future customers. The method by which they determine whether your car is in any condition to be resold and then place a dollar value on your car is known as car appraisal. It typically begins with you taking your old car to the dealer’s car lot and handing over your keys and ends with the dealer giving you a number that they are willing to pay for your car.
So, what happens in between? How do used car appraisals work typically? Let’s find out.
Step 1: An executive will not down your car’s details
As you hand over your keys, a staff member of the dealership with a clipboard will accompany you to your car. He/she will then take note of your car’s manufacturer, model, year, type, mileage, and other relevant details. Understandably, these will form the foundation upon which the dealer will start valuing your old car. He/she will also run the car’s VIN number to check its history and note down the relevant details that the appraiser may or may not need.
Step 2: The person will then visually inspect your car
This process is also popularly known as the silent walk-around method where the staff member literally walks around your vehicle to inspect it visually. He/she will take notes about dents and scratches and wrench marks and so on. During or after this step, the executive may ask you questions like “when did you last change the tires” or “where did you usually drive your car”, continuously writing down relevant information on the clipboard.
Step 3: A technician will inspect your car next
At the top buy here pay here car lots, a trained technician or a lot tech will take over next. He/she may or may not refer to the initial inspector’s notes and will look into your car with a finer comb. The professional will check under the hood for fluid leaks, engine condition, air filter state, and sit inside your car to inspect the infotainment, the dashboard lights, and window operation. Here, the main motive is usually to find out how much does the dealership has to invest in repairs before they can put the car up for sale. Naturally, that amount will come out of the payment that they will soon be willing to pay up.
Step 4: Test drive time
Either the initial staff member or the technician will request you to accompany him/her for a short test drive. Good used car dealers give you the same opportunity while selling you a car. So, it is only natural that they will do the same while buying from you. The terrain that the person will take will include all types of roads but your odometer reading will rarely go above 5-10 miles during the test drive. The inspector will obviously be making mental notes of every sound which, as expected, will later go into the clipboard.
Step 5: To the appraisal manager’s room next
The appraisal supervisor or the manager will take over next. Consulting the detailed notes, this person will finally determine the Actual Cash Value or ACV of your car. He/she will take depreciation into account, check the current retail and wholesale value of your car, decide whether the dealership can put up your car for retail or wholesale, and deduct the relevant amounts from the actual market value of your car. Finally, the appraiser manager will finalize on a figure which he/she will either directly present to you or send it to the dealership’s finance department.
Step 6: You sell your car
The wholesale market is where cheap used cars are put up for sale. So, if your car was determined fit for wholesale, you might get an estimate that is lower than the market trend. However, if you had brought your vehicle in a top-notch condition, the car will then enter retail which will automatically fetch you a higher ACV. Of course, you should not accept the price offered directly at its face value and must always negotiate, but at good dealerships, you will find that the price offered to be competitive.
Sign the required papers, hand over your original title and keys, and you are done. Be sure to turn up in the top used car dealerships for trading in your car as most small-time players try to dupe you with confusing terms to bring down the actual price. Genuine dealerships maintain transparency where you can always expect to receive the best price out of the entire appraisal process.