There are two ways to purchase a used car: retail and wholesale. Retail purchases cost more because the seller is motivated by profit, while wholesale purchasing requires less effort since the seller is motivated by lower costs. The value of used cars in lebanon pa depends on supply and demand in the market.
Here are the steps needed to calculate the market value:
Calculating the supply and demand of used cars
The market price is calculated by the average of wholesale selling price and retail selling price. The demand for cars depends on age, miles driven per year, and quality. The supply of cars depends on how many cars the dealer has, how many cars dealers have in stock, and how many cars are actually being used by the public. Since supply determines price, there is a trade-off between supply and demand.
The less demand for a product, the less supply will be needed to sell it at a given price. For example, if there is not enough demand for used cars to be sold at a certain price, then dealers will not continue to buy used cars from one another.
Calculating the wholesale value of a used car
This can be calculated by subtracting the price point of used cars originally sold from the current market demand for that car. The price point is the retail price of a new car minus the depreciation of the used cars, which equals the wholesale price.
This is similar to buying a car on the lot, except that the wholesale price is based on demand. The used car price point can be calculated using data from Kelley Blue Book, Edmund’s, and NADA Guides. The wholesale and retail values form a bell curve distribution with the highest percentage of sales clustered around the average price. This means that it pays to bargain for a good deal when you buy a used car.