Whether you are buying from a dealership or a private party, it’s important to know a car’s current cash value. This depends on a number of factors, including the vehicle’s age, mileage, condition, trim level, optional equipment, and even the region where it’s being sold. For any used car there are two prices: retail and wholesale.
Retail price. This is the higher of the two prices, and is what you would expect to pay for the car if you were buying a car at a dealership. If you are buying it from a private seller, you can usually expect to pay a somewhat lower price. Retail is also considerably higher than the price you’ll receive for your trade-in because it includes a profit margin for the dealership.
Wholesale price/trade-in value. This is essentially a car’s trade-in value to a dealer, who will likely sell it to someone else for profit. Understandably, the trade-in price is much lower than the retail price, and it is unlikely that you will be able to buy a used car for this price.
But it’s a figure you should know if you’re trying to decide whether to trade in your current vehicle or sell it yourself.
In the wholesale end of the business, a car can actually command several prices. One is what the dealer offers a customer as a trade-in. Then there’s a dealer-to-dealer price when one dealer sells that car to another. If the car goes to a wholesale auction, which many do, then there is an auction price. Dealers and brokers may buy auction cars for resale. Every step of the way, the middlemen take a markup and the car acquires a new “value.”