About nine million used vehicles are sold in the U.S. each quarter. The companies tracking those sales provide an invaluable resource — detailed information on what sells and for how much. These are the figures anyone looking to buy or sell a used car needs to know to be sure they are getting a good — or at least fair — deal.
Kelley Blue Book (kbb.com) is the most established of the pricing resources. It tracks thousands of new and used car purchases a week by monitoring consumer sales, wholesale auctions where dealers buy and sell vehicles, sales by independent and franchise dealers, and other transactions. The National Automotive Dealers Association is another great resource for pricing and purchase information, as is the popular automotive review site Edmunds. Pricing varies slightly between the three of them, as they pull different data and use different algorithms to determine value. For instance, my 40,000-mile 2006 PT Cruiser convertible is valued at $8,507 on Kelley Blue Book, and $8,425 on NADA, a negligible price discrepancy of less than 1%, but a difference nonetheless. (For more, see: The Complete Guide To Buying A Used Car: How To Negotiate Prices.)
Primarily Mileage and Condition
In brief, the main factors affecting a used vehicle's price are mileage and condition, with options, location and color also playing a role.
“As mileage increases, so does wear and tear,” said Alec Gutierrez, senior analyst for Kelley. “It goes without saying that a potential purchaser would be less inclined to pay top dollar for a 200,000-mile car verses one with 30,000 miles.” Were my PT Cruiser to have 100,000 miles, its value would drop to $6,730, according to Kelley. (For more, see: 10 Tips For Buying A Car Online.)
Condition is more subjective than mileage — someone selling a reliable, accident-free car with paint scratches and surface rust might describe it as “excellent,” whereas most buyers might call it good to average — but it's as important as mileage in assessing value. “Although condition is closely associated with mileage, the two are not directly correlated,” Gutierrez said. “Even a vehicle with low mileage can sustain more than its fair share of wear and tear, which negatively impacts the value. Vehicles with torn leather seats, electronic equipment that doesn’t work, scratches or dents, or other similar issues will not be highly sought after and thus will see a negative impact to their value.”
The location of a vehicle can also plays a part, depending on the vehicle in question. Mid-priced family sedans are popular everywhere, but more specialized vehicles do better in the certain areas. Convertibles and sports cars command higher prices along the coasts and in warmer climates, Gutierrez noted, while four-wheel-drive trucks and SUVs do best in the Northeast, Midwest and other areas that get a lot of snow. (For more, see: Cars That Depreciate In Value The Most.)
Some Options Worth More Than Others
“Options can be truly hit or miss but a few that tend to hold better than others are diesel engines, all-wheel drive, and panoramic moon roofs,” Gutierrez said. Philip Reed, a senior consumer advice editor at Edmunds, noted that a premium factory sound system and leather seats will also add value.
Then there are features that only affect a vehicle's price in their absence, such as air conditioning, and power windows and door locks. These had been noteworthy options in decades past but have become ubiquitous.
Automatic transmissions (or those that function similarly, such as dual-clutch or continuously variable transmissions) also fall in this category, with one caveat. Used sports cars, such as Nissan’s 370Z, are apt to be worth more with a manual transmission because buyers of such cars are willing to give up convenience for added driver involvement. (For more, see: 5 Tips For Dealing With Car Dealers.)
Personalizing Cars Can Hurt Value
Aftermarket options — such as oversized wheels, stereo speakers, or rear spoilers, rarely add value, and can actually lower it. With aftermarket modifications, “buyers don't know how well the work was done,” Reed said. Also, the original owner's version of automotive awesomeness might differ from the mainstream (i.e.: lose the zebra-print seat covers, fake hood scoop and coal-black window tint if you're looking to sell quickly). (For more, see: A Beginner's Guide To Auto Insurance.)
One final consideration: exterior color. It doesn't have a huge impact on pricing, but more common colors — blue, metallic grays and silver — sell faster than more adventurous colors like brown, orange or purple.
The Bottom Line
Many factors figure into the value of a used car, but mileage and condition are the most important. After that, options, location and color are weighed in. Those rules aren't absolute, though; what holds true for manual-shift sports car may not hold true for the family truckster. A Corvette with a slushbox is sad — at least to a car enthusiast. But a minivan with a manual (these used to exist) is just as pointless. (For more, see: 5 Ways To Buy A Used Car.)