How Much Is My Car Worth?
How Much Is My Car Worth?
There are a few reasons why it is a good idea to know how much your car is worth, when you are selling your car, or when you need to make an insurance claim due to an accident. This can help you avoid getting ripped off in either situation, albeit one typically gives you more control than the other.
What Factors Go Into the Value of Your Car?
Every year 40 million used vehicles are sold. The companies that track these sales allow you to search what they sell for, the details of the car, and any other information you might need. These are valuable resources for anyone that is looking to see how much they can sell their car for. This provides a fair market for those willing to do research, in order to walk into the dealership knowing how much to ask for their vehicle.
There are various sources to help you find the value of your used car, but there are different factors that will affect how much your car is worth. This can include superficial things such as the color, but also important qualities such as the condition.
One of the most important factors in determining your car's value is the make. For example, you know that a Ferrari is not the same as a Honda, and each has its respective values. Now, this is an extreme example, but the same can be said between a Jeep and a Honda, or an Audi and a Toyota. Some cars are simply made to be luxurious while others are made to be economical.
The second most important factor in determining car value is the model. Although two cars may be of the same make, they can be completely different in value. Therefore knowing the difference in value between two models of the same make is very important. For example, BMW produces a range of luxurious cars. If you purchase and then sell a 3-series, the purchase and resale value may be around $20,000 to $30,000. If you purchase and sell a BMW i-8 it might be anywhere between $147,500 to $80,000.
Another important part of a car is the submodel. The submodel can be as small as adding an “S” or “R” to the name, but it makes a huge difference in the capabilities and resale value. In some cases, such as with valuable or collectible cars, this can become even more important and add huge amounts of value.
Trim is usually most important when it comes to newer cars. Trim level matters a lot less with used cars because the mileage and condition matter a lot more. Despite this, it is still a factor in determining the value of your used car.
Although not the same as body style, trim options are an added choice for new car owners. Trim levels relate to the equipment and the styling on each vehicle. For example, the 2018 Honda Civic sedan has six different trim-level options:
There are also common trim levels such as:
Condition is huge when it comes to exploring how much your car is worth. Condition is a much more subjective factor than mileage, because mileage is reading off a number, and the condition is looking under the hood, and considering more than just the surface scratches.
Although often seen as somewhat similar, condition and mileage are not the same. One car may have low miles but look terrible on the outside due to being kept uncovered near the ocean, while another car may have 200,000 miles, but has been covered and kept in a dry location for its lifetime. When cars have torn leather seats or electronic equipment that doesn’t work, then you will see it impact the value. The same can be said regarding scratches and dents.
Because the weather is such a huge variable, oftentimes certain cars that do better in certain conditions, such as snow, seem to command higher prices. For example, convertibles and sports cars might sell for higher prices where they are in demand, such as near the beach. Four-wheel-drive trucks and SUVs do best in the Northeast, Midwest, and other areas because of the need for these vehicles in the snow.
Someone selling a reliable, and accident-free car that has a few dents might consider it an excellent vehicle, but others would describe it as good or average. Regardless, vehicles with torn leather seats, or electronic equipment that doesn’t work, as well as scratches or dents, or other similar issues will definitely not be as sought after and will see it impact the value.
The most important aspect of a car’s functioning is the internal components. Therefore, having a car with completely functioning internal parts will make a huge difference in your car's value. If the check engine light continually comes on due to transmission failure, then your car is not going to be as much of a value as a car that isn’t dealing with transmission issues.
How the outside of your car looks is just as important as how it functions. For example, if your car is new or likes new, then it will not need to be repaired cosmetically. There should be no issues with the exterior or interior of the seats.
Most used cars are in average condition. They have normal signs of wear and tear and need minor reconditioning to be resold. It might have small scratches and dents. You may need a bit of maintenance but not too much.
When a car is in bad condition then it might have hail or water damage, frame damage, or be inoperable. In this case, you will not get much for your vehicle.
If your car does not function mechanically then you aren’t going to be getting anywhere. Therefore, it is essential to make sure that all of the various important mechanical parts of your vehicle are functional before selling the car. Covering parts up and turning off the check engine light is not going to fool a dealership. Once the car is plugged in these problems will come to light. Therefore, fixing any mechanical problems is a must before selling your vehicle.
Number of Previous Owners
Although it does not always influence the car, the fewer owners a vehicle has had, the less abuse it has probably taken. It also typically means more accurate maintenance records and vehicle history reports. Therefore, purchasing a vehicle with only one previous owner is the best way to go if you hope to resell it in the future.
Any previous accidents are always a huge red flag. Unfortunately, there is never a guarantee that there are not damaged parts after an accident, or that they simply have not been completely broken. The main reason why someone might be concerned that your car has been in an accident is that accidents can cause long-lasting damage. In some cases, they can cause problems long term that do not show themselves right after the accident happens.
Current Market Pricing
The aggregate price of vehicles fluctuates constantly. You see this all the time with new cars, and it happens with used vehicles as well. Individual makes and models go on sale, there are special promotions as well, and sometimes this can interfere with the value of a used vehicle. If the new vehicle is going for a great price, then most people are not going to be willing to pay a similar price for a used version. This is essential to keep track of so you can sell when the current market pricing is optimal.
Method of Sale
Whether you are selling privately or trading in, versus selling to a company makes a huge difference. For example, the retail price is when you purchase a car at a dealership. This means that when selling back to the dealership you will probably get less for your car because they want to make a larger profit. Selling privately is the best way to make the most money because there is no middle man.
The easiest way to sell your car is to go to a dealership as a trade-in. This means that instead of giving you money or cash for it, they will put it as a credit towards your next car. This will never give you top dollar but it may save you in sales tax and the hassle of actually working to sell your vehicle.
When going through with a trade-in you need to be careful. Most times the salesperson will try to mix all the different numbers together to confuse you. They will take the price of your new car, your trade-in value, and the cost of your financing into one number that makes it seem like an amazing plan when really they are overcharging you. You should look at each aspect as an individual transaction to ensure that nothing gets lost in the mix.
Another thing to keep an eye out for is that dealers are never going to give you the best price. First, off they will take care of all of the paperwork. This is only one positive aspect, but you will end up paying for it. Since they will need to refurbish and advertise the car in order to resell, they will need to put money into the car. This is going to cost you during the trade-in.
- Standard: no upgrades
- Sport: upgraded engine performance and handling
- Luxury: upgraded interior and smoother suspension
The one positive part of trading your car at a dealership is that it can save you some money in sales tax. This is because in most states you will only need to pay tax on the difference between your new car’s tax and the trade-in value, rather than the entire purchase price of the car. If you have a high-value trade-in, this could be a large number.
Instant Cash Offer
In the last few years selling your car for straight cash has been the best way to sell your car. This is called an Instant Cash Offer, also known as an ICO. It can be done online, on the phone, or in person. You provide the VIN as well as mileage and condition, and you get an instant purchase offer. If you are detailed and accurate you will get a more accurate price quote the first time.
Selling It Yourself
Selling your car yourself often offers the highest price, but it does not come without work to achieve it. You will need to prepare your car for sale, gather all of the paperwork, as well as meet with different buyers and finally complete the documents to sell it.
Warranties and Certificates
If your car is still under warranty then you may be able to obtain or keep certificates certifying its authenticity. This is typically only something that you find in classic cars or extremely valuable vehicles.
As one might think, the higher the mileage the lower the value. This comes from the thought that the higher the mileage, the higher the likelihood that you might find problems with the car. For example, most buyers want to pay less for a 200,000-mile car over one with 30,000 miles. This makes sense because mileage dictates lifetime.
The value of cars and trucks dramatically changes based on where they are located. For example, trucks are purchased more in rural areas. This is because they may be used by those who work with trucks or who need them for the terrain. Sports cars or cars, in general, are typically more popular within urban populations and convertibles in coastal areas. Another example is in areas that get snow. When snow falls consumers need to have a 4 x 4 or SUV to get through the weather conditions. When cars are more desirable, the prices raise according to the demand.
If you need money for your car fast then you may sacrifice a bit in terms of price. If you want to sell your car fast, then you most likely will have to sell it for less. Some vehicles also sell faster than others due to their overall desirability. This can change based on the season or dealer sales that are going on for that particular vehicle.
What Buyers Are Looking For
Similar to that of location, how much you will get for your car monetarily has to do with what buyers are actually looking for. If you are selling a classic car, small things like a chassis number can make a huge difference in your car's value. On the other hand, if you live somewhere where people like to go “mudding” you may have better luck selling a truck or SUV. There are also car trends that impact this statistic.
Depreciation and Retail Price
Modern or Classic?
Modern cars are generally everyday cars that people take to work or commute in. This means that if your car is a modern car, someone will most likely drive it as their daily driver. Classic cars or sports cars are typically ones that they are passionate about. This is not a daily car, and instead something that is used for pleasure. It is important to know the distinction when determining your car's value because classic cars typically take longer to sell and demand a higher value. It also means that there are fewer people interested. Modern cars often sell quickly and have a lower overall value, but there will be more interested people.Buyer or Seller Market?
Similar to that of the real estate market, cars fluctuate in value just like houses. When selling your car you may be lucky to sell it for anything at all or may be able to get a really good price due to the market. If the latter is true, then you are in a seller’s market, while if you cannot sell your vehicle due to a lot of inventory available, it is considered a buyers market.
How to Find What Your Car is Worth
When you are first looking to sell your vehicle you need to consult pricing guides. This will allow you to enter as much information about your car that you have. This should include the mileage and condition, and any other information asked by one of the many vehicle-pricing estimators.
Then you can choose how much you need to get from the sale. Whether you are trading in, or selling to a private person, this will dictate how much you can get for your car. This is followed by looking around at similar vehicles for sale. Look within your area to see what people are asking for the same vehicle in the same condition, and how many are for sale nearby.
There are many other factors to consider as well. This means that the time of year, how popular the vehicle is, and if you have made any modifications can have an effect on the bottom line sale price. Whether your car is similar to those you see, or a bit less (or more) in good condition, then you can adjust your car’s value for depreciation. This is similar to selling a home and finding comparable properties.
Using tools available online though can be your best option to truly understand what your car is worth. Because there are so many variables and places to do so, it is essential that you examine each one, to get an accurate depiction of what your car is worth.
Tools You Can Use to Estimate Your Car's Value
Appraising your car is the first step to know what you can get for it and what you deserve to get for it. Every vehicle will depreciate somewhat, so being able to estimate puts you one step ahead. Knowing its value will also help you decide the method of sale you plan to take.
Although there are many online car value calculators that provide you with an estimate for free, not all are created equal. These are only estimates and should not be used definitively, but can help you get a general ballpark.
We tested each of the tools below with one of our most commonly purchased vehicles, a 2005 Toyota Corolla CE in black, with standard equipment and 100,000 miles in the Dallas ZIP code, 75254, and "Average" condition.
Kelley Blue Book, also known as KBB, is an automotive shopping website. Originally founded in the late 1920s. It originally began business by publishing an actual blue book that dealerships referenced to provide car values and pricing information. Kelley Blue Book was used so commonly that the term "Blue Book" became a part of dealership language. Now car shoppers use this term as well and use it often to compare prices. In 2010, Kelley Blue Book was acquired by Autotrader. The term "blue book value" has become synonymous with selling and buying a car as KBB has become one of the most used tools for evaluating a vehicle.
- Easy to use and get an instant range of prices
- Extremely accessible and well-known
- Gives you a realistic range of prices you should expect to buy or sell a used vehicle for
- Favors dealers when giving pricing
- Can over-value or under-value certain makes and models based on recent used car sales