;)
Knowing your car’s value helps you get the most for your vehicle and keeps your equity positive.
Understanding the value of your car is an important part of selling it. If you don’t do your due diligence, you could lose out on hundreds — if not thousands — of dollars by listing your vehicle for too little.
On the other hand, you could end up listing your vehicle with too high of a price tag. This could cause your car to sit in your garage for months on end, taking up space and losing value.
Figuring out how much your vehicle is valued at doesn’t have to be complicated, as long as you follow these steps.
It might be surprising to hear, but your car actually has multiple different values. Each value reflects the price that the car is worth in different retail and private sale situations, which can affect how much you get for your car and how much equity you have in it.
The trade-in value, or wholesale price, of your vehicle is based on how the dealership values your car. With a trade-in, the dealer is buying your car from you and crediting its value towards the purchase of a new car.
The trade-in value will depend on your car’s condition, age, and model, among other factors. For example, a car in good condition with little mileage will likely receive a higher trade-in value than one that’s rusted out with hundreds of thousands of miles on the speedometer.
When you list your car for sale, you’re initiating a private party sale, rather than one conducted through a dealership. The exact private party sale value your car has will depend on your location, what shape your car is in, and how quickly you want to sell it.
The retail value is the price the dealer will actually put a used car out on the lot for. This won’t matter so much for you, but understanding the full retail value of your car can help you understand how much you might get via a trade-in, or how much you can potentially list your car for in a private sale.
The MSRP, often referred to as the list price, is what the auto manufacturer suggests the car should be listed for by dealerships. This value suggestion helps keep dealerships from charging outrageously different prices for the same vehicle.
Certified pre-owned is a fancy way of saying that a used car has gone through an inspection by an automaker. These inspections can help ensure that a car is in working condition before it’s resold. Typically, CPO vehicles will have less than 80,000 miles. This, paired with the rigorous inspection, makes them often more valuable than a used car that could be sold privately or on discount sale lots.
Now that you understand the variety of values given to your car, which ones should you actually pay attention to? The ones that should matter the most to you, the owner, are the:
These values show you how much you could get if you decide to sell your vehicle. Values like dealer retail value, MSRP, and certified pre-owned are going to matter more to dealerships than a private party seller, since that’s what they’ll get when they go to sell.
Will you get more money for a trade-in than a private sale? That can be difficult to determine since it will largely depend on the type of car you have and the condition it’s in.
More often than not, you will make more money by selling your car yourself since no one is looking to make a profit except you, but it’ll be a more involved process than if you simply traded it in at the dealership.
So how do you make sure you set the right asking price or prevent an undervalued trade-in?
One of the fastest ways to find the value of your car is to use a free online value estimate tool. These tools use data, some of which is provided by you, to determine how much a used car is worth in different situations. Since there is no exact formula to determine a vehicle’s value, you can expect your car’s value to vary slightly based on each tool’s algorithm. When in doubt, use multiple tools to compare.
Here are three reputable tools to check-in with to find your car’s value estimate:
To save yourself time filling out all of the details of your vehicle, a few of the sites above allow you to enter your car’s VIN or license plate number. If you prefer to do things the old fashioned way, make sure to have the following information handy before starting the appraisal process:
Your car is going to have a different value in Northern California than it does in Southern Florida or Western Montana. So, when looking to put a value on your vehicle, it’s important that you compare comps in your local market. After all, your vehicle is only really worth what someone is willing to pay you for it. Even though online price estimators take your zip code into account, there is nothing like your own research to verify your car’s value.
Since no two cars are going to be valued exactly the same, especially once they’re used, it might be impossible to find a listing that describes your car to a T. Instead, your goal should be to find vehicles that most closely compare to yours, keeping make, model, year, and condition at the top of your mind.
Luckily, there are a few different places you can start your research.
Craigslist, Facebook Marketplace, your local newspaper, and local Facebook sales groups are great places to start your search for market value, especially if you plan to sell your vehicle in a private sale.
If you don’t have any luck in your local classifieds and marketplaces, or you intend to trade-in your car, a trip to your local dealership could be in order. Getting quotes from multiple dealerships, as well as used car lots, is recommended in order to find a true average.
There are a large number of used car sites where you can get a sense of what’s for sale in your area, which can help you find comps more quickly. These sites can show you private sales and dealerships local to you. Some well-known sites include CarGurus, Cars.com, and Autotrader.
A used car’s value is dependent on many different factors, all of which carry different amounts of weight. Some of the most common things that affect your vehicle’s value are:
Knowing your vehicle’s value is important when you’re looking to sell it, but you should also check your value regularly to ensure that you’re not collecting negative equity. If you are, it might be time to refinance your auto loan.
Negative equity happens when you owe more on your vehicle than it is worth, otherwise known as being “upside down” on your loan. Since the value of your car is a major part of this equation, having an accurate idea of its value is extremely important.
Oftentimes, negative equity is reflected in a loan-to-value ratio, or LTV. This ratio compares how much your car is worth with how much you owe on your car loan. Lenders use LTVs to help calculate risk. If you have an LTV over 100%, you have negative equity.
Worried that your loan is upside down? Check out our LTV calculator below to find out:
If you have negative equity on your car loan, refinancing might be an option to help get you back in the black. By refinancing, you’ll be starting out your new loan with negative equity, but you will likely have a better interest rate and, as a result, your loan might be more manageable.
Unfortunately, not every lender is willing to take on the risk of refinancing an upside down loan. You will want to get quotes from multiple different lenders to ensure that you find one that meets all of your needs.
Your vehicle is a major asset, so you want to make sure that you know how much it is worth, regardless of whether or not you plan to sell it in the near future. To stay on top of it, make sure to calculate your vehicle’s value once every six months or so and be ready to make adjustments if your vehicle is worth less than your loan.
When you buy a car, whether new or used, one of the most important documents you’ll need is the title. The title, also known as a certificate of ownership, is proof that you are the vehicle’s legal owner. However, not all cars have titles, which may leave you wondering if purchasing a car without a…
Before agreeing to cosign on a car loan, it’s important to understand the risks. Doing the favor of cosigning on someone’s auto loan can help them qualify for the car they want — but whether you should cosign isn’t a decision to make lightly. As a cosigner, you’re responsible for…
Taking over someone's car payments isn't easy or always possible. Here's what you need to know. Owning a car can be expensive. In fact, the latest data from AAA shows that the average yearly cost to own and operate a new vehicle in 2023 is $12,182 or $1,015 per…
