'Traders' reveal the most accurate way to price used cars, so sellers don't have to worry about getting ripped off
Pricing a used car does not follow a fixed rule but depends on the quality of the car as well as the market price of new models of the same type.
In used car transactions, accurate pricing plays an important role, ensuring benefits for both parties. Sellers can maximize profits, while buyers minimize risks and make reasonable decisions. Unlike new cars with clear listed prices, used car prices are affected by many complex factors, not simply based on the year of manufacture or the number of kilometers used.
Mr. Le The Dinh, a used car dealer in Cau Giay District (Hanoi), said that each used car model has its own characteristics, requiring flexible evaluation to determine a reasonable price. Currently, the used car market is mainly divided into two groups: used cars (used for about 1 year, driven less than 10,000 km) and used cars over 2 years old.
For used cars, the owner usually bears all initial rolling costs, including registration fees, registration, inspection, road fees, license plate fees, etc., accounting for about 10 - 12% of the car's value. For example, a Hyundai Accent with a rolling price of 570 million VND will cost about 80 million VND in rolling costs. Thus, after 1 year of use, the owner can resell the car for a maximum of 490 million VND.
For cars over 2 years old, the common pricing formula is: Used car price = Rolling price - Depreciation rate +/- Influencing factors.
In which, the depreciation rate is calculated according to the formula: Rolling price × number of years of use × 7%. The depreciation rate of 7 - 10% applies to popular cars, while luxury cars have higher depreciation rates. The more expensive the car, the higher the depreciation rate; the more durable the car, the lower the depreciation rate.
According to Mr. Dinh, factors affecting used car prices include liquidity, supply, accident status and car buyers.
For example, the 2017 Chevrolet Captiva and 2017 Mazda CX-5 2.0 both have a rolling price of about 1 billion VND. After 8 years of use, the remaining value is calculated as follows: 1,000,000,000 - (1,000,000,000 × 8 × 7%) = 440,000,000 VND.
However, because the Mazda CX-5 2.0 2017 has better liquidity, the current selling price can be over 500 million VND, while the Chevrolet Captiva, due to lower market demand, can only be sold for around 420 - 430 million VND.
Mr. Pham Anh Tuan, owner of a used car showroom in Dong (Hanoi), emphasized that used car prices are also greatly affected by fluctuations in new car prices, especially for models under 2 years old.
For example, the price of the 2022 Hyundai Stargazer will decrease from VND 575 million to VND 489 million in 2024. In this case, applying the normal depreciation rate will not accurately reflect the value of the car, so the reduction needs to be stronger, about 20 - 25%, to match the market.
In addition, the condition of the car is also an important factor. A car that has not been in an accident, not flooded, has been regularly maintained and has a clear history will have a higher resale value. On the contrary, a car that has been in a serious collision, even though it has been repaired, will be valued lower, from 35 - 50% lower than the original value of the car.
Used car prices also depend on the buyer. Selling directly to end users is often more expensive than selling to used car showrooms. Car dealerships often buy for about 20-40 million VND lower for popular cars and 80-100 million VND lower for luxury cars. For rare or illiquid car models, the purchase price can be hundreds of millions of VND lower than the actual value.
Although you have to accept a lower price, selling to a showroom allows for a quick transaction and immediate payment. On the other hand, selling directly to a buyer can yield a higher price but is more time-consuming and complicated in terms of procedures and payments.
In short, used car valuation is a matter of considering the actual condition of the car and market fluctuations. Whether you are a buyer or a seller, careful research and expert advice will help limit risks and ensure transparent and efficient transactions.
