Simple Ways To Understand Car Value Vs. Price
Most car dealerships in Houston push the price of a car as the selling point of a particular car. They purposely put stickers of the Manufacture Suggested Retail Price (MSRP) on the car so it can appear to be worth more than what they will sell it for. Right off the bat the price of the car can be dropped by a few hundred dollars because it simply a suggested price that the manufacturer tells the dealership in order for them to make a significant amount of profit.
A lot of the car dealerships in Houston, will then use the “cushion” they have on the price to make you think you are special when they lower it by a few thousand dollars.
The right way to shop for a car is to breakdown the value of what it’s worth over its’ lifetime. This is done simply by calculating the your cost for the car today, then adding all of the maintenance fees you’ll pay over the next few years. For example, let’s say you buy a 2004 Toyota Camry with 80,000 miles for $6,500
It’s important that you assess the price of repairs. You can get this estimate based on the overall health of the vehicle. Categories that measure a vehicle’s health are: engine components (such as the motor, radiator, alternator, air filter, battery, etc); tires, exterior components like windshield wipers, headlights, taillights, suspension, brakes. It’s also always good to get a second opinion and use resources like www.AutoCheck.com and www.CarFax.com to check a vehicle history report.
If the car is in “okay” condition, then it’s very likely you would spend about $3000 in repairs over a 4 year period with out any unreasonable factors increasing the chance of breakdown. That means the value of the car is only $3,500 over a four year period. To simplify, if you bought a vehicle for $9,000 and it had little to no repairs in a Four year period, you would be getting a better investment for your money.
Car shopping on price alone is the single biggest problem with unhappy car customers. When you shop with value in mind, you will have a better perception of what you will really be spending and it will help you determine whether you are getting your money’s worth!
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October 6, 2010
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