It’s not just mortgages and refinancing booming right now. Add used cars to the list.
As of October 2020, used car values are up 15% compared to the year prior. With low interest rates incentivizing car buyers and car rental companies selling off inventory, there has been an increase in demand for used cars, driving up their prices.
If you’re in the market to sell your car, there are several ways to find out what your car is worth, and there are a few different types of car values you should know.
Car Value Estimators and Pricing Guide
“Determining a used car’s value is becoming ever easier, with lots of online tools, but some vehicles require more in-depth research as the market fluctuates quite a lot,” says Bryon Dorr, editor-in-chief at Autowise, an online car blog.
The best way to find your car’s value is to use an online estimator tool. These free resources allow you to plug in some basic information about your vehicle and get an instant value estimate. Here are some of the most popular sites:
Kelley Blue Book
Kelley Blue Book, commonly abbreviated as KBB, is a leading online car value estimator. It uses details about your car, like the make, mileage, and color, to determine the value. If you’re thinking about selling your car, KBB will give you an instant cash offer based on the vehicle’s value. You can also look at new and used car prices and even see vehicles for sale at dealerships near you.
Edmunds’ car appraisal tool is a competitor to KBB, but it uses more in-depth criteria to determine your car’s value, like whether the vehicle has been in an accident or has any cosmetic damage. On Edmunds’ site, you can check out new car pricing and shop for used cars in your area. To help inform your car search, Edmunds publishes comprehensive vehicle reviews and long-term road test results.
(NADA) National Automobile Dealer’s Association
Like KBB and Edmunds, NADA allows you to find your vehicle’s value, but it uses slightly different criteria. NADA focuses on the vehicle’s wholesale price, current market price, and the demand for cars in your area. NADA’s car value appraisals tend to be higher than what KBB or Edmunds will calculate, which is something to keep in mind. NADA also offers a variety of vehicle comparison tools, but it doesn’t have a used car marketplace.
Which Is Most Accurate?
Although there are several car pricing guides available, they’re not created equal. That’s because each car valuation site uses a different algorithm to calculate car value.
“KBB seems to be one of the most accurate and reliable valuation sites out there,” says Andrew King, director at Jamjar.com, a leading UK car-buying comparison site. “KBB is able to use real-world used car prices, gathered on a daily basis from wholesale auctions, independent and franchised dealers, rental fleets, manufacturers, and other sources in order to give you as accurate a valuation as possible.”
“For run-of-the-mill mass-produced vehicles, KBB is still the go-to for most people, although Edmunds is quite good as well,” adds Dorr.
Experts recommend getting an estimate for the car’s market value rather than the car’s book value for the most accurate information. “Market values may be more useful for consumers because they reflect what people are willing to pay now,” says Brian Savoy, senior manager of physical damage and estimatics at Metromile.
“Book values, such as NADA’s ‘black book,’ are often used by car dealerships and may be affected by a lag in publish date with current market conditions or differences from wholesale pricing,” Savoy adds.
Information You’ll Need to Estimate Your Car’s Value
Regardless of which car value estimator you use, you’ll need to input some information about your vehicle. “Usually, the more questions you’re asked, the more accurate your valuation will be, which means that you need to be as truthful and accurate as you can when answering them,” says King.
Here is the information you will need to provide to get your car’s estimated value:
- Make, model, and year: First, you’ll need to disclose the car’s make, model, and year. Most valuation tools will also ask for the car’s color, interior, and trim. All of this information can be found in the owner’s manual if you aren’t sure.
- Features: Certain features and equipment can make or break the value of your vehicle. To get an accurate estimation, you’ll be asked to make note of any special features or custom equipment. Some common examples are a heated steering wheel, leather seats, a custom sound system, and custom rims.
- Mileage: If you’ve ever shopped for used cars before, you know mileage has a big impact on resale value. Typically, the more miles your car has been driven, the less it is worth. Your car’s mileage can be found by reading the odometer on the dashboard.
- Condition: The condition of your vehicle is another good indicator of its value. Some valuation tools will ask you to rate your vehicle’s condition, using categories like excellent and average. To avoid overestimating your car’s value, be honest when disclosing the condition and read the description of each category before choosing one.
Types of Car Values
There are several types of car values, and it’s important to understand the differences before you use a car value estimator. Here are some of the values you might receive from a car pricing guide:
“Trade-in value represents what a dealership may be willing to give you for your vehicle,” says Savoy. “Like the used electronics market, the trade-in value can change based on the condition of your vehicle.” The trade-in value is typically lower than the dealer value, even though they are related.
Private resale value
The private resale value represents the amount of money you could likely get by selling your car to another person directly. You can think of the private resale value as the price you would list your car for on a resale marketplace.
Certified pre-owned value
When you sell your car to a dealership, they will likely sell it as a certified pre-owned vehicle. That means the car has been professionally inspected and is covered by a limited warranty. The certified pre-owned value is often higher than the trade-in or dealer resale value.
Dealer resale value
“The dealer resale value points to the amount of money that they think a dealer would be asking for your used car. While this can’t always be accurate to the dollar, it can give you a ballpark figure of how much a dealer might advertise it for,” says King,
How to Compare Car Prices in Your Area
After getting a few car value estimates, it’s a good idea to compare your car’s appraisal to what the vehicle is being sold for in your area.
Look at popular used car marketplaces like Craigslist, eBay Motors, Facebook Marketplace, and Autotrader that advertise local used vehicles for sale. Start by searching for your car’s specific make and model, with a similar model year and mileage. It doesn’t need to be an exact match.
This should give you a good idea of what your car is actually worth. For example, if KBB estimates your car’s value at $10,000 but used models in your area are going for less than $7,000, it’s a good indicator of what your car will really be worth when you sell it.