There is a booming trade in used cars in the US, with around 42 million of them changing hands each year. Many of these come from used auto dealers, but a lot of them also move between owners in private sales. If you’re thinking of trading up to a new vehicle or just want to get rid of an old car you don’t drive anymore, there is an important question in front of you.
How do I determine the value of my car?
If you’ve never sold a car before, this can prove tricky ground. Keep reading for our guide on how to determine car value.
Contributing Factors
There are several pieces of key information that go into establishing vehicle value that you’ll need as you go.
You’ll need the year, make, and model of the car or truck. You’ll need the mileage. You should also make a list of any optional features that came on your vehicle, as those can boost the price a little.
Condition
You also need the condition. Don’t kid yourself about this one.
When you drive a vehicle on a regular basis, it’s very easy for someone to overlook the accumulated flaws of the vehicle. For example, did your kid spill grape juice on the back seat and leave a big stain on the upholstery?
Is the leather in the front seats looking worn or cracking? Has sun exposure left the paint job looking faded? Is there rust?
If you oversell the condition, you’ll quickly discover that any vehicle value estimate you get will prove off the mark. Private sellers simply won’t pay what you’re asking if you list the condition as good and it’s actually only fair.
Salvage Vehicles
A special case happens with salvage title vehicles. Insurance companies declare a vehicle a total loss when the cost of fixing it exceeds a certain threshold of the vehicle’s estimated cash value.
Ironically, it doesn’t always mean the car is in terrible shape. The damage might not even affect anything other than the appearance. If you’re wondering how to determine car value with a salvage title, you can learn how here.
Types of Car Value
There are several kinds of car value you should know about since the kind of value can alter what you’ll get for the car.
Trade-In Value
Trade-in value is what a dealership will likely offer you for the car if you buy a vehicle from them. As a general rule, this is where you get the least amount compared with the car’s actual worth. In most cases, the dealership offers an amount that is under what they believe they can get by selling the car for scrap or as a used vehicle.
Private Party Resale
This is the estimated value of the car if you decide you’ll sell it yourself to another person, rather than a dealership. Most private party sales
Other Valuations
Other valuations you might see include certified pre-owned or dealer retail value. These numbers don’t really mean much because they estimate what dealerships will likely get for the vehicle.
Where to Get a Car Estimate Value?
There are a small handful of generally reliable websites that specialize in helping you figure out car value.
Probably the best-known option is Kelley Blue Book or KBB, which used to issue actual blue books about car values. This site takes the contributing factors listed above and generates an estimate for you. It’s generally considered the go-to option for consumers.
Another well-known option is Edmunds’. Edmunds’ provides a similar service, but will ask you for more details about your car than KBB, such as the vehicles’ accident history. In theory, this more in-depth approach should yield a more accurate estimate, but you’ll spend a lot more time inputting information.
The other main option is the National Automobile Dealer’s Association, which is commonly shortened to NADA. This site offers different kinds of estimates, such as the wholesale value or the going market rate.
Regional Factors
Regional factors can also make a difference in getting an accurate estimate of your vehicle’s value.
For example, let’s say you live somewhere like Southern California where it never snows. Buyers there won’t place much value on four-wheel drive. Buyers in some areas of Montona, where annual snowfall can reach 200 inches, may pay more than market value for a vehicle with four-wheel drive.
You must also weigh the local popularity of vehicles. Some vehicles don’t sell well in some areas, while other vehicles prove next to impossible to find. If you own an unpopular vehicle for your area, you may find that you can’t sell it for current market value.
Before you set a firm price in your mind for your vehicle’s value, do some research on the local listings for similar vehicles. Check out dealership prices and private seller prices. These can provide you a much clearer picture of what is considered an average price where you live.
Depreciation
Many people overestimate their vehicle’s value because they don’t account for the drastic depreciation that vehicles undergo during their first few years off the lot. A car or truck loses anywhere from 20 percent to 50 percent of its sticker price after one year on the road. Regardless of care and condition, assume your vehicle’s maximum value is only 40 percent to 50 percent of its sticker price.
With that said, depreciation doesn’t happen evenly across all makes and models. Some vehicles will hold their value better than others.
Figuring out the Value of My Car
The process of estimating the value of my car can look simple on the surface. You visit a car value estimator site, plug in your info, and get a number. While those numbers can get you in the right ballpark, you must take them with a grain of salt.
You must research the local prices of similar vehicles for a more accurate picture. You must also make a very honest assessment of your vehicle’s condition because that will drive a lot of the negotiation.
Looking for more tips on used vehicles? Check out the articles in our Used Cars section.