Yahoo Finance How To Find the True Value of Your Car — and What That Number Means If You Want To Sell
Whether upgrading to a newer model or downsizing your fleet, knowing the true value of your car is important information for maximizing its resale potential. This figure is useful when choosing an insurance policy for the vehicle, especially when you own a classic or luxury vehicle. If you plan to be one of the tens of millions of people who buy or sell a used car each year, read on to learn more about used car values and what they mean.
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Factors Affecting a Car’s Value
Several factors affect your car’s value, including its condition, history and market demand. Let’s look at these factors and why they matter to prospective buyers.
Accident History
A vehicle that has never been in an accident typically sells for more than an identical vehicle in a fender bender. Similarly, a severe accident that left structural damage (even if it’s been repaired) lowers the vehicle’s value.
Brand, Make and Model
People who love a specific brand, make or model tend to be more willing to pay a higher price to get the vehicle they want. Some cars and trucks fetch a higher asking price than others, which varies regionally. For example, Edmunds reports the Toyota Corolla is the most popular vehicle in Florida, while Ford F-150 trucks reign in Colorado and Tesla dominates the California market.
Maintenance
A well-maintained vehicle typically holds more value than a spotty maintenance history. Regular oil changes, routine coolant flushes and periodic air conditioning service keep vehicles in working order and show prospective buyers you’ve taken care of the vehicle.
Market Conditions
Changes in the market affect vehicle values. For example, demand for compact cars with good gas mileage and hybrid vehicles increases when gas prices rise. During the Covid pandemic, chip shortages lowered the supply of new cars and helped send used car prices to record highs.
Mileage
Years ago, cars that reached the 100,000 mark lost significant value as buyers shied away from them to avoid potentially costly repairs. Today, the average used car has around 70,000 miles, and some dealerships take in cars with up to 150,000 miles as trades. However, a vehicle with lower miles usually sells for a higher price than a similar vehicle with more miles.
Type of Sale
In many cases, selling a car to a private individual costs more than trading it into a dealer. This is because the dealer will spend money to prepare the vehicle for sale, including inspecting and reconditioning the vehicle and paying for expenses related to the transaction.
Vehicle Condition
Buyers consider the vehicle’s condition when deciding to pay the asking price. Torn seats, scratches, dents, rust, and mechanical problems lower the value. On the other hand, you should see the value increase if the vehicle is in good physical condition.
Vehicle Options
Car valuation models take into consideration the options available on the vehicle. Popular features like power windows and air conditioning may be necessary for some buyers, and a vehicle lacking them would be worth less. Vehicles with high-end interiors and technology typically hold their value longer, but be careful about aftermarket modifications. You may like super dark tinted windows, but a buyer who prefers more visibility at night might not be willing to pay for it.
How Do I Find the Exact Value of My Car?
The first step in finding out the exact value of your car is to evaluate it objectively. According to Kelly Blue Book, owners overvalue their vehicles when setting an asking price. Note features like sunroof, audio system, trim package, engine, and powertrain. You’ll need these details later.
When choosing the vehicle’s condition, you can use the guidelines provided by the pricing guide you’re using. For example, Edmunds uses the following category descriptions:
Outstanding: These vehicles are new and do not need to be cleaned or reconditioned by the new owner. The vehicle has no mechanical issues or visible wear inside.
Clean: A clean car may show signs of normal wear and tear, like a slightly faded interior or minor paint scratches. These cars have no significant mechanical problems and need no work to pass an emissions test.
Average: Average vehicles may have cosmetic or mechanical issues, such as dull paint, minor dents, and worn interior fabric. However, they still should be able to pass an emissions test.
Rough: These vehicles typically have serious mechanical and cosmetic concerns that the new owner needs to repair, but the vehicle still runs. For example, a vehicle with a damaged exhaust may operate, but it needs to be repaired to be in good operating condition. The interior needs work, like reupholstered seats or a replaced dash.
Damaged: Vehicles in this category usually do not run properly and need significant cosmetic and mechanical work. This can include frame damage, a branded title, or serious rust.
Classic Cars
Calculating the value of a classic car can be tricky because the actual cash value doesn’t reflect what it’s worth in the market. Classic car buyers look at the make and model, condition, and trim package, but they may be willing to pay more for a vehicle that elicits a sense of nostalgia in them–like a replica of their first car. Supply and demand also play a role, as the number of available classic car models decreases over time.
Where Can I Find the Best Value for My Car?
You can use several pricing guides and consult with more than one guide to give you a more precise value. Some popular online car value calculators include the following:
Carfax
Edmunds
Kelly Blue Book
JD Power
Another place to check vehicle values is through online and local marketplaces where people list vehicles for sale. Just remember the list price is the asking price and does not reflect what the seller is willing to accept and what buyers are willing to pay.
Final Take — What Your Car Value Means When It’s Time To Sell
Ultimately, your car’s value is what someone else is willing to pay. Pricing guides are a tool to help you gauge what to expect, but they don’t guarantee a value. When setting a sale price, consider multiple factors like the outstanding balance on the car loan (if you still have one), what you plan to do with the money (and how much you need to do it) and whether your description of the vehicle lines up with how others view it.
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This article originally appeared on GOBankingRates.com: How To Find the True Value of Your Car — and What That Number Means If You Want To Sell
