If you’ve ever browsed an auction catalogue, you’ve likely noticed a “trade” or “retail” value listed next to each vehicle. This often sparks a common question: Is this the starting bid or the price the auctioneer wants? The answer is: neither. Let’s break it down to help you understand what these values mean and how they’re used in the auction and broader used car markets.
What is the Listed Value?
Auctioneers often list trade or retail values as a reference for buyers. These values are not set prices but rather guides based on industry-standard book values. These book values, published monthly, reflect market trends, depreciation, and the vast array of vehicle models, derivatives, and year combinations.
Understanding Trade and Retail Values
Trade Value: The price a dealer is likely to offer if you sell your car to them. It’s generally lower as it accounts for the dealer’s costs to recondition and resell the vehicle.
Retail Value: The price you might pay to buy the same car from a dealer, typically higher to include profit margins, warranty, and other dealer services.
These values are starting points, not fixed prices. For example:
A clean, low-mileage car of a particular make and model may fetch more than trade value.
Conversely, a car with damage, high mileage, or neglect may sell for significantly less.
How Dealers Use These Values
Dealers rely on trade and retail values to:
Make buying offers: A dealer factors in mileage, condition, and market demand to decide how much they can pay for a vehicle while leaving room for profit.
Set selling prices: They analyze the market to avoid pricing too high (risking no sale) or too low (losing potential profit).
Even vehicles with significant issues—like high mileage, accident damage, or non-runner status—have a value. The key is understanding that everything is for sale at the right price. For example:
A clean car of a specific make, model, and year will command higher trade and retail values.
The same car, if marked as salvage, will attract a much lower trade value but still holds value for parts or rebuilding.
Why These Values Matter at Auction
At auctions, vehicles are sold to the highest confirmed bidder, regardless of trade or retail values. Auctioneers list these values to help buyers estimate a vehicle’s market worth. However, the final price is determined solely by the bids on auction day.
Not all auctioneers display these values, and some may show only trade, retail, or both. This can vary depending on the auction house and the type of sale.
Tips for Using Trade and Retail Values When Bidding
Inspect Carefully: Attend the viewing day to assess the vehicle’s condition. Look for signs of wear, damage, or neglect.
Do Market Research: Compare similar vehicles online to understand what they’re being listed for by dealers or private sellers.
Set a Budget: Use trade and retail values as guides, but factor in reconditioning costs, potential repairs, and auction fees.
Be Savvy: Remember that vehicles on auction can sell below their book values. On average, cars at auction this quarter are fetching around 80% of trade value—an incredible opportunity for a well-informed buyer.
Why Auctions Are Worth It
Buying at auction can seem daunting, especially for first-time bidders, but the potential savings make it worthwhile. With proper preparation and a clear budget, you can secure a fantastic deal on your next vehicle.
For more auction tips and updates on bank, fleet, and commercial auctions, join our WhatsApp group: Auction Alerts.
And if you need finance to bid with confidence, Auction Finance is here to help. We offer pre-approvals so you can bid knowing your finances are secured. As an authorised financial services provider (FSP34936), we’re committed to helping you save.
Vehicle Inspection Services
While we don’t offer this directly, we’re happy to recommend a trusted partner: View4You.
They provide detailed vehicle inspections.
If you’re bidding remotely or just want peace of mind, they’re the experts to trust! Visit their website to learn more: www.view4you.co.za.
Start your auction journey today. Great deals await those who do their homework and bid smartly
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