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When you are shopping for a used car, there is a probability that you will hear sellers using different pricing terms. To get the best deal, you will need to understand the meaning of these terms that are used for calculating used car prices. Below are some of the main terms that you are likely to hear from sellers.
The asking price is simple to understand. It is the total amount that the seller asks for his car. You can negotiate downward and get the car at a lower price. The seller knows that he or she might not get the amount but they use the term to initiate the purchase process.
Dealer Retail Price
Used car dealers might consider selling their cars at a retail price. If this is the case, they use the ‘dealer retail price’ term. You will find them including the term on a car’s windshield. It is similar to the asking price and it is intended to start negotiations with potential buyers. They also include it in the Kelley Blue Book.
Kelley Blue Book Price or Book Price
You may also hear sellers using the term “blue book value” or basically Kelly blue book price. For more information about book price or Kelly book price, read the Kelly blue book. Many dealers use the term in different ways. You will hear them saying “I would like to give you more but book value is low.”
TMV price also known as True Market Value is the average market value of any used car. Many dealers arrive at this price after taking car mileage, condition and other options into consideration. The best example is when you hear a dealer saying, “the asking price is lower than the TMV of this vehicle. That is why I’m asking $1,000.”
Dealers may also offer a trade-in price when you are selling your used car to buy a new one. You can negotiate a trade-in price and arrive at a price similar to that offered at used car auctions.
Wholesale price is also another term that dealers normally use. It is the price that dealers paid for the car they are selling to you. It is unlikely that you will buy a car on a wholesale price because that price is the dealer’s rock-bottom price. The term is used when you hear dealers saying, “You can’t get the car for $1000. That is exact the wholesale price I paid at the auction.”
Understanding the above terms and other used car buying tips will help you get the best deal for a used car.