Used Car Resale Values: What Is My Used Car Worth?
If you’re thinking of selling your car, you’ll want to get fair value for it. Whether you’re planning on trading it in at a dealership when you buy your new car or prefer to sell it yourself privately, you’ll want to do some research first to make sure you know what your used car is worth. Fortunately, there are tools available to help you determine the value of your used car. The following process will ensure you price it properly.
Consult Pricing Guides
The first step is to look up the value of your vehicle on the three major pricing guides. These guides provide a data-driven estimate on the value of used cars based on recent sales. It’s best to consult all three since each one uses slightly different data and formulas to arrive at the value of your car. By looking at all three guides, you’ll receive a more comprehensive price range for your vehicle.
The three major pricing guides to consult are:
Edmunds – This tool helps you determine the “true market value” of your vehicle. This figure is based on dealership transactions, and you’ll be able to see the average price paid for your car in your area.
Kelley Blue Book – This tool provides a calculator that gives you several different values for your car based on whether you are trading it in or selling it privately. You can also see the certified pre-owned pricing if you’re trying to research the value of a used car you’re purchasing from a dealer.
NADA Guides – This tool was developed by the National Automobile Dealer’s Association. It uses data on millions of vehicle sales to arrive at the approximate value of your car. While this tool is backed by dealers, it is considered accurate by experts and will be useful to you as you research what your used car is worth.
Information You’ll Need to Determine Your Car’s Value with the Pricing Guides
To get an accurate value of your vehicle from these pricing guides, you’ll need to provide the following information:
Vehicle year, make and model – If you’re selling a 2015 Nissan Frontier SV, Nissan is the make and Frontier is the model. Some vehicles, such as the one in this example, will also contain a trim level. For this vehicle, the trim level is “SV.” You can usually find the trim level information on the chrome letters on the back of the vehicle, as well as in the owner’s manual.
Color and optional equipment – Believe it or not, the color of your car may impact its value. Some popular colors will raise the price of your vehicle. In addition, optional equipment such as leather seats, a sunroof or seat heaters will increase the value of your car.
Vehicle condition – Each pricing guide will have its own method of describing the condition of your vehicle. Read the description of each condition level and choose the one that most closely matches your vehicle. Don’t overestimate the condition of your car since this will result in an inaccurate value.
Mileage – Cars with higher mileage tend to have less value than cars with lower mileage. If you exceed the average mileage driven per year (approximately 12,000-15,000 miles), it may negatively impact the value of your car. If you drive fewer miles than this average, it may increase the price you can get when you sell it.
Keep in mind that the pricing guides provide an estimate of your car’s value. The actual amount you’ll be able to receive will also be impacted by several factors that can’t entirely be estimated by these tools, such as the exact condition of your car (these tools segment the condition into broad categories) or your location. For example, an all-wheel drive vehicle will be worth more in a part of the country with heavy snowfall than it will be worth in warmer climates, as this feature isn’t as important when the roads are good year round.
Select the Specific Car Value that Matches Your Desired Action
After you input all the information listed above into the pricing guides, you’ll receive several different car values:
Trade-in value – This is the amount you should expect to receive for your car if you trade it in at a dealership when you purchase your new car. This is the lowest valuation of your car. While you’ll receive less money on a trade-in, most states will offer tax savings for a trade-in which make this option more competitive.
Private party resale value – This is the price you’d receive if you sell your car privately. This value is higher than the trade-in value, but keep in mind that there are additional costs to you. There is the time spent listing and showing the car to potential buyers, potential costs for listing your vehicle, and taxes you’ll have to pay after the sale.
Dealer retail value – This is the price you’d expect to be quoted if you were to purchase your used car from a dealer. This value is higher than the trade-in and private party values since it factors in a dealer markup.
Certified pre-owned value – This is the highest value for a used car. Certified pre-owned refers to vehicles which are inspected and sold with bumper-to-bumper warranties.
Research Prices for Comparable Vehicles in Your Local Market
When you sell a house, your real estate agent will evaluate the sales prices for comparable properties recently sold in your area to arrive at a fair asking price. The same idea holds for used cars. By researching the price of other cars matching your year, make and model with similar options, you will have a better idea of what this vehicle is worth in your local market.
You can conduct this research by visiting websites such as Autotrader, Cars.com or CarGurus. Enter the information for your vehicle as if you were a prospective buyer. When you get the results back from the website, look at the cars which most closely match yours. While the asking price is important, you should also look at how many similar cars are for sale since supply and demand factors can potentially impact the value of your car. It’s best to look at all three websites to get a more comprehensive picture of how much your vehicle is worth.
The Value of Your Car Is Important When Refinancing Your Car Loan
Determining the value of your car isn’t just important when you want to sell it. It’s also a critical component of the process when refinancing a car loan since the bank will want to make sure you don’t owe more than the car is worth. Depending on the lender, the trade-in or retail value may be used in determining whether your car is worth more than the amount you still owe. Therefore, you should always ask the lender which of these values is being used when conducting your own research.
iLending Makes Car Loan Refinancing Easy
If you’re looking to refinance your car loan, iLending will make the process easy and hassle free. Our You First Approach™ ensures you’ll enjoy a great experience throughout the entire process. You’ll benefit from working with a loan consultant who will:
Get to know your goals for refinancing
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On average, individuals save $145 a month after refinancing their car loan with iLending. This is a significant amount of money to inject back into your monthly budget, making it easier to cover the rest of your expenses. There’s no reason to remain saddled with bad car loan terms any longer. iLending will help you find the financial freedom you seek.