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What is Book Value?

 

 

 

Car dealers are notorious for trying to bargain their way out of giving away money when it comes to negotiating prices on buying or selling used cars. Usually, they will try to convince the person they are dealing with that their calculations of ‘book value’ are the best and most lenient, and assure you that they are giving you the best price possible “without costing them too much out of their own pocket”. This sounds familiar to anyone that has ever tried to buy, sell or trade in a used car, right? However, not many people really know what ‘book value’ is supposed to be, so they end up having to trust that the dealer has done the right calculations and isn’t trying to take advantage of the situation (which happens more often with females, as dealers tend to think of them as not being very ‘car-savvy’).

 

Book Value

 

‘Book value’ is a term used by accountants to determine the value of an asset as it has depreciated up to a certain point. This means that the ‘book value’ of a car is the amount it is worth as an asset a few years or months down the line. The technical equation (Purchase price of asset - Approximate salvage value ÷ Estimated useful life of asset) used to calculate the depreciation of an asset is quite simple, so there is no reason why it cannot be used by anyone looking to double-check their dealer’s estimation. The approximate salvage value is the amount you would expect to get back if the asset were sold for spare parts. The estimated useful life of the asset is the amount of time the asset is expected to perform optimally (assets such as computers have an expectancy of 4-6 years, and cars between 10 and 15 years).

 

For individuals that are too lazy to bother trying to figure this all out by themselves, there are quite a few reliable websites all over the internet that will calculate it all of you. Your best option will be to visit a few of them and make sure their calculations all coincide to be sure that you have the right value.

What do I do when my brakes fail?

We’ve all seen at least one movie (or greatly overacted soap opera) where the hero finds himself or herself the victim of having their car sabotaged. The resulting chaos from having the brake lines severed and failing, almost always while plummeting full-speed down a hill seems like one of the most terrifying experiences imaginable.

 

However, brake failure is not something that occurs very frequently, but that makes the pressure to react to the panic all the more instant. To help yourself avoid one of these scary situations, make sure to have regularly scheduled maintenance checks and inspections, and pay attention to the sound and feel of your brakes at all times. Have any inconsistencies or odd behavior/sounds checked out immediately.

 

Here are a few (adapted) tips offered by the US National Safety Council on how to react during situations of complete or partial brake failure:

 

1.    Putting the car in a lower gear allows the engine to slow the car, and may give you enough time to be able to safely pull over. Whether you're driving an automatic or a manual, try to downshift smoothly through the gears. If you downshift too quickly, you risk a skid. Do not shut off the car to stop it, as you'll lose your power steering, and do not put the car in neutral or you will lose the engine braking effect.

 

2.    If you're driving a car with a good, strong emergency brake, go ahead and use it. In cars with manual transmissions, the emergency brake is often operated via a hand-activated lever located behind the shifter, while in many automatics you use a small pedal located on the far left of the driver. It helps to try your emergency brake out at slow speeds to see how much stopping power it really has.

 

3.    Move toward the left shoulder of the road, or, if possible, toward an exit. If it is necessary to change lanes, do so smoothly and carefully, watching your mirrors and the traffic around you closely.

 

4.    Perhaps this goes without saying, but do not touch the accelerator pedal. Your goal, right now, is to slow down, pull over and safely stop.

 

5.    Believe it or not, debris such as coldrink cans or bottles, coffee cups, rolls of paper towels and other items bouncing around in the cockpit can wedge behind your brake pedal, preventing its use. Make sure the pedal's path is clear and if not, kick the obstruction out of the way.

 

6.    If your car has standard brakes they may respond to pumping, which could build up enough hydraulic pressure to allow them to work again. But many newer cars with ABS will do the pumping for you, so you should firmly press the brake pedal even if the brakes are not working. The brake failure may be temporary and if they suddenly start working again, your foot will be where it needs to be.

 

7.    Turn on your hazards and sound your hooter until you're stopped so other motorists will know to give you plenty of room.

 

8.    If you must, aim for something ‘soft’. This is a judgment call, but a wooden fence is better than a tree, for example -- and anything is preferable to hitting a human being.

 

9.    Knowing the steps outlined in this article and being able to perform them should give you the confidence to respond naturally instead of panicking, in the unlikely event that your brakes do fail.

 

10.    Don't be tempted to drive the car again, even if the brakes suddenly start working. Have the car towed to a repair shop or dealer for inspection and repair.

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