If you are into the online quiz, you must have come across this question “how much did Mrs. Merson pay for the car.” Well, the whole question goes like this: There is one Mrs. Merson, and she is trying to sell her self-owned car. She has approached some experts to evaluate her car. After the research and analysis, the present value of her car came out to be $5500. It was 55% of the value of the car’s original price when she purchased it.
Now the potential buyer of Mrs. Merson’s car wants to know the exact value of the car when she bought it in the first place.
The solution to the problem
The current value of Mrs. Merson’s car is calculated to be $5500. This amount is said to be 55% of the amount she had paid for the car. So going by the division rule $5500 / 55% = $10000. So the car’s actual value when Mrs. Merson brought it was $10000.
You must be wondering why this quiz is being included on this site? Your apprehensions are justified, but this question does pose a very important point for the car owners, and that is:
How to correctly calculate the correct price or value of your car?
You don’t normally care for the car’s value when you run your car daily. But when you are looking to sell your car, the car’s value becomes important. Often we do not know the right and exact value of our car. If the correct value of the car is not determined, you may sell your price at a lower value and incur a loss.
So how can you calculate the correct value or price of the vehicle?
The car’s price or value depends on the buyer, and it may be wary. You may think of a higher price for your car, but the buyer may consider it less. Several things determine the price of the car:
- The make of the car and model
- Number of owners
- Running condition of the car
- The sale marketplace
- Accident history of the car
- Mode of sale
- Warranties if present
- The mileage the car gives
- The location
- The buyer’s demand
- The fuel type
- Mode of payment
Getting the correct valuation of the car
Before you look for a potential buyer for your car, it is important to determine the correct value of your car. If you have a vintage car, it may be of very high value; you must know whether it falls in that category. Like this, there are many factors. Today there are several applications and places online and offline where you can easily get the correct value of your car. There are online car value calculators and local dealerships, and guides who can help you find the right price to resell your car. The most popular sources for this would be:
Additional terms to know when determining the value of your car:
In addition to the points mentioned above, there are other terms that you should know and understand for correctly knowing the value of your car.
Deprecation: Deprecation is the difference between the car’s value when purchased and its current value. It accounts for the wear and tear incurred by the car in its running time. Like the car Mrs. Merson bought was $10000, and now it is $5500, so the depreciation is $4500.
Retail Value of the car: The retail value is the car’s value which you would supposedly pay for buying the car from a used car dealer.
Trade-in value of the car: It is the car’s value the used car dealer is willing to pay for your car.
Private party value: It is the amount charged by a person to sell a used vehicle to an individual. This amount excludes the dealer’s cut, which is generally lower than the retail price.
We now know How much did Mrs. Merson pay for the car; it is $10000. We also now know how to determine the correct value of your car. All thanks to Mrs.Merson.