Author Topic: Used car valuation  (Read 1749 times)

wizofloz

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Used car valuation
« on: September 20, 2014, 02:33:49 AM »
How do you go about valuing a used vehicle? I'm wondering if a price per remaining mile approach is used by anyone? If you narrow your choices to fairly mustachian vehicles is that a decent approach? Assuming an expected life of 250k miles paying $7500 for a vehicle with 100k miles would be equivalent to spending $5000 on a vehicle with 150k miles. This works out to paying 5 cents per remaining mile. This strips away all the other B.S. and looks solely at the purchase as a get from point A to point B decision. Thoughts?

RWD

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Re: Used car valuation
« Reply #1 on: September 20, 2014, 09:32:08 AM »
I don't think this scales very well. You wouldn't value a vehicle with 250k miles at $0. Also, for all other things equal, a vehicle with 200k miles will require more maintenance to continue running compared to the same vehicle with 100k miles.

You could probably come up with some sort of logarithmic function that would be a bit more accurate. But there are too many other variables besides mileage. A 200k mile vehicle that has been immaculately maintained could easily outlast a 100k mile vehicle that has been neglected. Or a 150k mile Honda could potentially outlast a 100k mile Chrysler.

Spork

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Re: Used car valuation
« Reply #2 on: September 20, 2014, 09:39:13 AM »

My personal method is to just average edmunds.com and kbb.com.  It seems like one of them is always "way high" and one is "way low"... so the middle seems reasonable.   If I am buying, I also do a VIN check with autocheck.com.  Anything that doesn't smell right gets tossed out.  (I remember tossing two craigslist cars because the owners seemed overly difficult to deal with.)

DarinC

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Re: Used car valuation
« Reply #3 on: September 20, 2014, 11:15:55 AM »
Your floor will likely be at least ~$300(scrap)-$2000(good shape). Edmunds doesn't do well with this. Different cars have different floors. For instance, my 05 Prius on the low end runs ~$5900 assuming I keep it in good shape, even if I have ~300k miles miles on it, compared to ~$6600 with ~135k miles. It's low end will drop as it ages, and it'll eventually settle at ~$600-$2000 a couple decades from now. The scrap value will probably be double that of most cars because of the Nickel in the batteries and more copper/etc...