How do pawn shops determine value?

Written by kevinr
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How do pawn shops determine value?
Pawn shops consider resale value of an item first. (Heritage Barber Shop & Grocery Shop image by spi4u2 from Fotolia.com)

A pawn shop will value an item based on numerous factors, including condition, appraised market value, and how easy it would be to sell. The shop will then offer to purchase the item at a discount to the appraised value, or to grant a loan of a similar amount with the item as collateral.

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Market Value

All items are valued at what they could bring if sold at market, so a used television set will be priced at what it could be sold for based both on what new models are selling for, and the going rate for similar products.

Online services exist that provide this information to pawn shops for a fee. Search for "pawn shop pricing guide" to see some popular companies.

Rare items

Rarer items, such as antiques, may require the use of an expert in the field who can appraise the item and provide an estimate of its value at auction.

Saleability

Certain items are easier to move than others. It is easier to sell a TV than an antique diving helmet. The helmet may sell at a collector's auction, but the auction house will charge a fee, and the item may have to be transported to the auction's location if it isn't local. All of this will not affect the appraised value but will lower the price you are offered for the item.

Value after Fixing Up

A pawn shop may decide to buy an older car in poor condition at a reduced value if they conclude that it will make a profit after being professionally restored.

The Price You Can Get

It is best to visit multiple pawn shops to get different value estimates and offers. This way you have leverage to bargain for the best terms.

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