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Tips and Tricks on How to Estimate the Value of a Car

Tips and Tricks on How to Estimate a Car’s Value
Photo by Anthony Shkraba from Pexels

There are various reasons a person may want to estimate the value of a car. For instance, it is handy when selling or buying a used vehicle from a third party or even trade-in for a different vehicle. Also, most people research the value of a car online before negotiating. What’s more, knowing the value of a vehicle is essential when filing an insurance claim or getting title loans. 

With a good grasp of estimating a car’s value, you will have the confidence to close a deal and peace of mind. Read on to find the tips and tricks of estimating the value of a car. 

What factors influence the value of a car?

Various factors determine the value of a car. A vehicle’s history and the factors that contribute to its depreciation are key in determining the value of a used vehicle. The basic details necessary to estimate a vehicle’s value include: 

1. Make, model and year

Verify the accuracy of the make, model, and year of the vehicle. It is common to confuse one model with another, especially when it is no longer in production. 

2. Mileage 

Capture the mileage from the speedometer. Both vehicle condition and mileage are among the most important factors when valuing a vehicle. 

3. Condition 

Vehicles in excellent exterior, interior and mechanical condition usually attract high valuation compared to vehicles in poor condition. Clean cars sell faster because buyers typically look for well-conditioned vehicles. Besides looking great and driving well, the value of a car boils down to how it runs mechanically. The mechanical condition of a vehicle determines if it needs reconditioning or significant repair

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Photo by Gustavo Fring from Pexels

4. Vehicle features

It may take some research to establish all the features in a vehicle since new models have more features. Take into account the car’s upgrades, such as anti-lock brakes, power steering, or all-wheel drive. 

5. Color 

It may seem trivial, but color can contribute to the value of a vehicle. It turns out yellow is among the best colors for better resale value. Also, green and orange have the same effect, especially on sports cars. Vehicles with such colors benefit from scarcity compared to blue, black, and white cars, which are common. 

6. Method of sale 

The value of a vehicle is significantly influenced by the method of sale. Usually, there are three ways of selling or buying a car, that is, through trade-in/dealership, auction, or private sale. 

Trade-in

According to CNBC, their trade-in value is high with the recent spike in demand for used cars. Trade-in involves selling a vehicle to a dealer as a trade-in or for cash. The valuation depends on factors like the operating costs of the dealership and profit margin. Plus, consider the cost of reconditioning the vehicle. The best time to trade in a car is when you need a convenient, timely, and guaranteed sale. 

Private sale 

The vehicle value increases in a private sale since the owner does the legwork. Thus, they can expect more for their effort and time—also, no overhead or third-party commissions. 

Auction 

Selling a vehicle through auction can alter its value. Auctions provide a quick way of selling vehicles even though there are no guarantees. Also, auctions tend to lower the value of a car. There is no room for negotiating the values of a vehicle in an auction. 

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Photo by Nicolai Berntsen on Unsplash

How to estimate the value of a car

Establishing the value of a used vehicle is a lot easier, thanks to the various online tools. There are several ways of gauging the market value of a car. The easiest and fastest method is through the use of an online vehicle value calculator. These free tools let you provide some basic details about the vehicle to get instant estimates. Alternatively, you can research the local sales guide or visit the dealership. 

The popular online vehicle valuation tools are: 

1. Kelley Blue Book (KBB)

KBB valuation depends on extensive research about trends in the US. The platform offers instant online vehicle valuation reports based on vehicle make, model, mileage, trim features, condition, and method of sale. Through its 5-point condition and quality distinction for vehicles, KBB makes it easy to understand what a car is worth in the marketplace.

The details are based on the condition of the car. KBB will break down the value into three areas: dealership sale/trade-in, private sale, and local auction. Using the KBB website to estimate the value of a vehicle is straightforward. You only need to provide the details of the vehicle. 

2. Edmunds

Edmunds offers vehicle valuation using actual sales and specific location prices. It establishes the market value using sales and trending details of what people within a particular location pay for a specific vehicle. The platform will deliver vehicle value depending on the method of sale, namely, private, dealer, or trade-in. 

Since Edmunds provides location-specific vehicle valuation suing recent similar sales, it can give a better estimate than KBB.  

3. National Automobile Dealers Association (NADA)

NADA vehicle valuation depends exclusively on dealership data and issues the estimates to dealers in NADA. This online vehicle valuation tool does not provide an instant value or figure. The tool focuses on the car’s wholesale price, vehicle demand, and the current market price. Usually, value appraisals are higher on NADA compared to Edmunds or KBB. 

Types of car values

Understanding the different types of vehicle values is essential before using a vehicle value estimator. Below are some of the popular values you are likely to come across in a vehicle value estimator: 

  • Trade-in value: This represents the value a dealer is willing to give for a used vehicle. 
  • Private resale value: A private seller is likely to get the amount of money for selling their vehicle to another person. 
  • Certified pre-owned value: When a private seller sells a vehicle to a dealership, the dealership may, in return, sell it as a certified pre-owned car. It means the vehicle was professionally inspected and has a limited warranty. This value is usually higher compared to dealer resale or trade-in value. 
  • Dealer resale value: Indicates the amount a dealer may be asking for a used vehicle.

Featured Photo by Anthony Shkraba from Pexels

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