In the day-to-day running of your vehicle, the value of your car may not be important. But, when looking to sell, upgrade, or perhaps reshuffle your finances, the value of your vehicle suddenly becomes important. So how do you work out the value of your car? And is your car’s estimated value the same as its worth to someone else?
One key thing to remember; the value of your car to you, is not necessarily the same as its worth to someone else. If you͛re looking to sell your car, then it͛s worth is really dependent on its value to someone else.
With these factors in mind, where do you start?
First, you need to determine an estimate market value.
There are a number of ways to gauge the average market value of your car. Typically, the easiest and quick-
est way is to use an online vehicle valuation calculator. Alternatively, you can look at local sales guides or
go to a dealership.
You will find a number of valuation guides and calculators on the internet, most commonly, these will be underpinned by three key sources:
How do online valuation calculators differ, and which one should I use? The truth is, they are all helpful and
each resource will give you a guide to work from. But what is the difference, and how do they work?
The KBB provides valuations based on extensive market research regarding trends in the US marketplace. These valuations come from national data analysis, including car sale trends, economic conditions, and developments within the industry, from diverse sources. The end result, a pretty comprehensive and well-researched representation of the current car sales in the national marketplace. These ranges are not location specific however, and value can be determined by location (see Edmunds for area specific data).
KBB gives immediate online car valuations that are determined by the 1) make, model and mileage, 2) trim features, 3) method of sale (trade-in/dealership, or private), and 4) condition (a 5-point condition scale is used here, from excellent through to poor).
The KBB 5-point condition and quality distinction for cars will give you a good idea of how to determine the worth of your car in the marketplace, based on its condition. To determine your car’s condition and quality, go to KBB’s Car Condition Quiz,
KBB will give you car valuations that are broken down into three key areas;
1) value via trade-in/dealership sale,
2) value if sold it privately, and
3) an option to contact a local dealership for their valuation.
For example, the valuation for a 2010 Dodge Avenger, R/T trim, with 58,067 miles, in ‘very good condition’ can range from
$5,843 - $7,086 (trade-in), to $7,338 (private sale).
| Method of Sale | Any US location |
|---|---|
| Trade-In / Dealer | $5,843 - $7,086 |
| Private | $7,338 - $8,621 |
Using KBBs website, is pretty easy and straightforward. The site prompts you for information about your vehicle, you simply type in your details and their estimated valuation is calculated. To get a market valuation, go to http://www.kbb.com/whats-my-car-worth/
Remember, these are estimated market values based on national information, so depending on where you live or where you may be looking to sell your car, the actual market value for your car may be slightly higher or lower.
Edmunds, provides car valuations based on actual sales, and will provide you with specific location pricing. Edmunds determines a TMV (typical market value), based on sales and trending information of what people in your area are paying for your particular vehicle. The TMV is a great for a closer estimation of the potential market worth of your car in your area.
Edmunds will give you vehicle valuations that are location specific, and based on method of sale (trade-in, dealer, or private). Location specific values are important because geography, and local area trends can have a significant impact on the value of your car. For example, if you are in a large metropolitan area, where there are a number of cars for sale similar to your own, the demand-supply ratio is swayed for competition; buyers have more choice and can therefore negotiate lower pricing in their favour. On the other hand, if you reside in an area where there are few similar cars for sale, potential buyers will have less negotiation power to lower the price.
As an example of how Edmunds works, the valuation for a 2010 Dodge Avenger, R/T trim, with 58,067 miles, in ‘clean condition’ can range from $6,676 (trade-in in Houston, TX), to $9,693 (dealer sale in Los Angeles, CA).
| Method of Sale | Houston, TX | Bridgeport, CA | Los Angeles, CA | Rutland, ND |
|---|---|---|---|---|
| Trade-In | $6,676 (low) | $6,752 | $6,805 | $6,709 |
| Dealer | $9,503 | $9,640 | $9,693 (high) | $9,550 |
| Private | $8,061 | $8,167 | $8,220 | $8,100 |
Using the Edmunds site is straightforward, all you need are your car’s details, and like KBB, the site prompts you for information. For an Edmunds valuation, go to http://www.edmunds.com/appraisal/
Because Edmunds provides you with location specific TMVs, based on recent similar sales, this can be a better gauge for an anticipated value of your vehicle than KBB.
NADA is a valuation guide based on exclusive dealership data, and is issued only to dealers within NADA (National Automobile Dealers Association). As an online car valuation tool, this website (www.nadaguides.com) will not give you an immediate figure or value range.
This website is helpful however, if you want to make a connection with a local dealership that can help you both value your car, and/or make a sale.
Essentially, there is no steadfast rule or magic formula regarding the use of online car valuation calculators. Resources such as KBB, Edmunds and NADA, are all valuable, dependable, trustworthy sources of information. To get the best estimate of the real market value of your vehicle, the best method is a combination of valuation calculators, your judgement, and a scan of local sales within your area. Whilst the online valuation calculators are a great start and guide, remember, they are only guides.
Top guides and resources for selling used, or ‘pre-loved’, vehicles suggest that establishing an estimated market value is one step towards
determining the potential value of your car. So what are other factors you need to consider?
The method of selling a vehicle can significantly alter its value. The three principle ways to sell your vehicle are via;
1. Trade-in / dealership;
2. Private sale
3. Auction.
Selling your car via trade-in will typically present you with the lowest price for your vehicle. Here, you are ‘selling’ your vehicle to a dealer, either for cash or a trade-in. Whilst the market value for your car, based on online valuation calculators, may be set at say $7,500, a dealership trade-in may offer much less.
The lower valuation here is based on factors such as the dealership’s operating costs and profit margins, and the cost to recondition your vehicle, ready for sale.
What’s the upside? Convenience, timeliness and guaranteed sale. What’s the downside? Lower valuation, limited negotiation power, third party commission deducted from the market value of your car.
Your car’s worth and value via private sale will increase. Why? Because you are doing the legwork, and you can reasonably expect to get more money for your time and effort. You are also free from overheads and third party commission deductions, you have opportunities to negotiate, select your target market and wait for the right price; it does however, require time and effort.
What’s the upside? Typically, higher car values, price negotiations and sale process is determined by you. What’s the downside? The valuation and sale process is up to you, negotiations and dealings with potential buyers (including dealing with no shows), can be lengthy, you have to wait for the right price and buyer.
Selling your vehicle via auction can also alter the value and worth of your vehicle. Auctions are a quick and trouble-free way of selling, however there is no guarantee of sale (if no one reaches your reserve), and car values tend to be lower at auction.
Car values at auction are lower because they are a wholesale marketplace, there are fees involved (typically a % of sale price), and auctions invite a particular kind of buyer.
There are several types of auctions available for public car sales, such as classic / specialised car auctions, and more general public auctions; and selecting the right type of auction will ensure a better $ value for your car. If you were looking to sell a restored 1966 Ford Mustang, you could expect a higher valuation at a classic car auction because your car is targeting the right audience; a market looking to purchase classic cars.
What’s the upside? Convenience, timeliness and a potential larger pool of buyers What’s the downside? Fees and paperwork, finding the right auction, no room for negotiation on value.
How does the condition of your vehicle affect its worth?
Independent of the make, model, year or mileage of your car, its condition will have a significant
impact on its value.
How? Why?
The value of your car will be determined by the condition and running quality, including;
A clean car will sell faster and quicker. Buyers typically look for clean and well conditioned cars. They are interested in any paint or body damage, any history or evidence of accidents, and the overall look of the car. If your vehicle has substantial body, paint or interior damage, then it’s value will be lower.
What can I do to improve the look of my car, and therefore it’s value?
A thorough wash and wax/polish will enhance the paint colour, quality and overall look of your car; think about blackening or replacing the tyres, if needed
Detailing the inside will bring it up to near-new condition; be mindful of stains, odours and any interiors that need extra attention, including the glass, ashtrays and carpets
If there are minor body or interior repairs that can be made, and you’re willing to make them, getting them fixed will increase the worth of your car
Whilst your car may look great, and you think it drives well, it’s value will really come down to it’s condition; how it runs mechanically, and whether it’s in need of significant repair or reconditioning. How do I determine my car’s mechanical condition, and therefore worth?
You can obtain a rough guide to the potential mechanical condition of your car via KBB’s or Edmunds’ 5-point condition and quality scales, or by using KBB car condition quiz . These guides will give you an immediate result, but are subjective based on your understanding of the car’s mechanical ability. Alternatively, you can take it to a mechanic for an assessment.
A registered mechanic can give you a more comprehensive understanding of your car’s mechanical condition, including any reconditioning that may be needed, and also repair any minor damage if needed. Paying the money for a pre-sale inspection can be worth your while, firstly, you will be able to make a more realistic assessment of your car’s overall value within the market; and secondly, a recent mechanical assessment often puts a buyer’s mind at ease.
How does a ‘salvage title’ impact the value of my car?
The ‘salvage’ title on a car is a method of branding by insurance companies that denotes its history regarding factors like accident or theft . This branding typically occurs when an insurer determines that the repair or replacement of the vehicle exceeds roughly 70% of its market value.
A salvage title can affect your car’s value because within most states, cars with this title are not eligible for registration or driving on public roads. In addition, industry standards place a lower market value on salvage titled cars; KBB, Edmunds and NADA devalue these such cars, and typically will not provide a valuation for cars such listed.
For more information, see for example: DMV, Salvage Vehicles , or Edmunds, What is a Salvage Titled Vehicle .
Why does time effect the value of your car?
Essentially, the more time you have to wait for the ‘right’ price, the better chance you have of getting it. If you are wanting to sell in a hurry, you may not have the luxury of negotiation, setting a higher market price, and finding the ‘right’ buyer in time. What is the right buyer? The buyer who is willing to pay the price you allocate.
After taking your car’s value and condition into consideration, the timeline you have for a sale will also affect the value of your car. Remember, just because the time is right for you to sell, doesn’t mean there will be a large pool of buyers waiting. If you have the time to wait, scan through selling options, research local car sales, and screen potential buyers, you are more likely to achieve a higher market value, and price, for your car. For example, if you determine that your car’s value is around $9,000, but there are no buyers who are willing to pay that amount, then your car is arguably not worth $9,000 in the current market; it’s value in a sales market is significantly determined by what others are prepared to pay.
Having the luxury of a little more time for the sale of your vehicle, will enable you to wait for buyers that are willing to pay your set price, and allow for price negotiations with buyers. Time will also allow you to shop around for the best trade-ins or dealership sales, and give you negotiation power within these deals. Typically, if you are in a hurry, then whatever price someone else is willing to pay for your vehicle, becomes its value in the marketplace.
Understanding what is happening in the marketplace, particularly within your area, will give you important information about where your car fits within the market, how likely it is to sell, and therefore it’s current market value. If the economic market is such that general car sales are down, or there are a number of cars similar to yours currently on the market, then the worth of your car will be lower. If your vehicle is in high demand, then your car will be worth more.
For more information, see: Griffin, K. "Understand Used Car Salvage Titles: Salvage Titles Not Always a Bad Proposition If You Act Carefully". About.com: Used Cars. NY TimesEversman, and E.L. "The Purpose Behind Salvage Title Laws". AutoMuse. Vehicle Information Systems, Inc. http://www.dmv.org/salvaged-vehicles.php
Understanding what is happening in the marketplace, particularly within your area, will give you important information about where your caFor example, your car may be valued at a particular price, but if places like Craigslist or local dealerships are asking less, for the same car, then your car will be worth less.
So how do you know what the market is doing?
There are a few ways to look at the current market;
Have a look at used cars for sale online; looking at asking prices will help determine your vehicle’s worth within the current market (see Craigslist or other local classifieds)
Research popular brands for sale; this will help you determine how ‘popular’ your car is in the market
Talk to local dealerships regarding car sale trends
Research what is happening in your local area; are there many used car dealerships? Are there many used cars for sale in general? This will help determine how sought after your car may be, and help establish its worth in the local area.
Understand your car’s condition and selling qualities; if it is a classis, or has high-end trims, then think about targeting your sale appropriately
Use online valuation calculators to determine value ranges
Use online car condition tools, such as KBB Car Condition Quiz, to help determine your car’s condition
Know the local market and if your car may be ‘popular’ or sought after
Make sure you maximise the potential value of your car; make sure it’s clean and in the best condition possible
Determine your method of sale; this will inform its value, and prepare you for price variations
Work out your timeline for sale
Be realistic in your expectations regarding price and time; your car’s value to you will not necessarily be its worth to someone else, and be prepared that it may take longer to get a better price.
Working out your car’s true value in the current market can take time and effort, and that’s before you even start to think of how you are going to sell it. Is the thought of determining your car’s value and arranging a method of sale too much, or are you pressed for time? Then a fast, reliable and no-fuss way to value, and sell your car is through SellMax.
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