What Does Private Party Value Mean?by Andie Sterling
The term "private party value" refers to the asking price of a used vehicle when sold by an individual as opposed to a car dealer. Private party values exist in contrast to several other often quoted used car figures. According to Kelly Blue Book---a commonly used car reference website---other values to keep in mind are a vehicle's "trade-in value," "suggested retail value" and "certified pre-owned value."
Finding out the private party value of a vehicle requires little effort. Many vehicle trading and selling websites offer a calculator to determine value. You only need to type in the information about the vehicle's make, model, year, condition, mileage and special modifications. Often the calculators allow you to compare that price with trade-in values and dealership prices.
If you want to sell your vehicle, knowing its private party value is a reasonable amount to expect to receive if you sell your car. In contrast to the trade-in value, private party value is often thousands of dollars higher. Reasons for the discrepancy include that the dealership needs to make a profit and it also may incur expenses in cleaning and repairing your trade-in vehicle.
Whether you plan to shop at a dealership or buy from someone selling his own used car, knowing the average private party value of the vehicle gives you a good idea of how much you should pay for it. If you notice a large gap between the estimated private party value of the vehicle and how much your seller wants you to pay, find out why. An asking price significantly higher than the typical private party value suggests that the vehicle might be overpriced. A value much lower could mean that the vehicle has a deficiency making it worth less.
Determining a vehicle's private party value depends on its condition. Major mechanical defects, interior and body damage, and high mileage lowers its value. On the other hand, such enhancements as a high-end stereo, body kit or option packages will raise its value. Clean vehicles, vehicles with no accident or damage history, and those with extensive maintenance records also warrant higher values.
Private party signifies that a vehicle carries no special warranty and is sold as-is. By contrast, "suggested retail value" and "certified pre-owned value" refer to the asking price at a dealership for a vehicle in top condition that also usually comes with a warranty. Private party values for a specific make and model of vehicle can vary by thousands of dollars, depending on its condition.
- car image by Edvin selimovic from Fotolia.com