There are a number of reasons why knowing the value of your car is important. For one, it helps to get the best price if you sell your car to a third party or trade it in for another vehicle at a dealer. Today, a lot of people research car values online before negotiating. Another area that knowing the value of your car can be helpful is in filing an insurance claim. If you have an accident and your car is totaled, it can be helpful to know the value of your car before accepting the insurance company’s offer to compensate you.
Finally, whenever you are negotiating the value of your car – be it with a potential buyer, dealer, or insurance carrier – it can be helpful to have the confidence that comes with fully understanding your car’s value. Knowing this can help you feel more confident once the deal is closed, knowing that you have arranged the best possible exchange.
What is the resale value of a car?
Your car’s resale value is simply the dollar amount your car will be worth at a later date when you want to sell it to a third party or trade it in for a newer vehicle. In other words, the resale value reflects how much your vehicle type depreciates over time. There are online services that can help you determine how quickly your car is going to be depreciated, which can be an important factor in making a decision to make a car purchase.
How to calculate the value of your car
The value of your car depends on several factors. Calculating resale value can be a process. In this case, it can help to think carefully about each step.
Gather information about your vehicle
Before attempting to calculate the value of your car, there are a few facts you should gather about your vehicle. You should understand the history of the car and the factors that have contributed to its depreciation since purchase. The key information required in general includes:
- Make, model and year of manufacture – It is important to double-check that each of this information is correct. It is not uncommon for your model to be confused with another, especially if your vehicle model is no longer sold.
- Mileage – Determine your mileage as directly as possible from your speedometer. These are two of the most important factors in evaluating your car, along with the condition of the vehicle.
- condition – Cars in excellent interior, exterior and mechanical condition are usually valued at a significantly better price than vehicles in poor condition.
- properties – Knowing all the features of your vehicle may take some research as new features are always added to new models. Ask yourself what upgrades your car has, such as all-wheel drive, power steering, or anti-lock braking systems.
- colour – As trivial as this may seem, color can make a difference in value. Yellow, it turns out, is one of the best colors for resale value. Orange and green can do the same thing, especially in sports cars. Cars with such colors typically benefit from scarcity, while white, black, and blue cars are common, do not attract much attention and may be less in demand.
Consult a pricing guide or a car appraiser
Car value price guides are now all over the internet and are relatively easy to use. They usually ask you to determine the above factors that can help you determine the right value for your car. Here are three of the most popular websites for estimating car value:
- Kelly Blue Book: Kelley Blue Book (KBB), founded in 1926, is one of the most trusted sources for car valuation. KBB’s website instructs you to enter information about your car and uses its own proprietary software to evaluate the value of your car. It does this by comparing your car to a variety of auto prices it receives daily from wholesalers, franchisees, automakers, and others in the auto industry.
- Consumer reports: Consumer Reports is a known and credible source for all of your automobile purchasing needs. The company is known for their new car reviews and they also have an easy-to-use website for reviewing your car. The website contains a wealth of practical information about steps you can take to improve the value of your car.
- NADA leader: NADAguides, created by National Association of Automobile Dealers, has access to a wide range of auto valuation resources that uses data on millions of auto sales to help you evaluate your car. The website also offers a useful archive of historical car line reviews that will allow for a deeper understanding of your vehicle.
No doubt the values generated by each of these three sites and others will vary as each guide uses a slightly different method of comparing data. These variances shouldn’t be significant, but comparing values from multiple websites is a useful step in making sure you have the best information.
Research the market
There are additional steps you can and should consider that go beyond determining the value of your car from appraisal sites. Be aware that other factors can affect the value of your car. For example, there may be a seasonal influence on the demand for vehicles in general or for you in particular. Your particular vehicle can be popular in your area for many reasons. Some unique modifications can also be made to your car that could add or detract from its valued value.
There are several steps you can take to refine your estimate to reflect local market conditions. You can post in your local newspaper’s classifieds or on online sites such as B. search for your vehicle Autotrader.com. Also, consider checking the price of your car, or similar cars, and seeing how your vehicle differs from them, possibly with further upgrades. You can potentially get a better sense of how quickly your car is depreciating by comparing it to others that are for sale.
Terms and phrases to use when calculating the resale value of a car
When buying or selling a car, it is beneficial to know as much as possible about the terms and expressions used. If you equip yourself with your vehicle as well as the entire industry, you can stay at eye level. Here are some terms and definitions that are commonly used in the marketplace that you should know about.
|Terms and phrases related to the car value||importance|
|depreciation||The depreciation of your car is the difference between the value of your car at the time of purchase and the value at the time you decide to sell it. Depreciation reflects the wear and tear of your vehicle over time.|
|Sales value||The sales value of a car is the amount a dealer charges for a used car after it has been refurbished after a trade-in. In other words, this is the price you pay for a used car at a dealer.|
|Trade-in value||This is the price that a dealer will offer you to trade in your car. This is what the dealer determines as the value of your car after considering the price at which it is likely to be sold after the renovation.|
|Value for private parties||Private value is the amount that someone can ask for when selling a used car to another private individual. Note that the value for individuals is generally lower than the retail price, as the price theoretically does not include a mark-up for a trader’s services.|