What Is the Value of Your Used Car?
Approximately 40 million used vehicles are sold each year, according to Edmunds.com, an online automotive review site. 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.
- There are various sources to help you find out the value of your used car; three popular sources are Kelley Blue Book (kbb.com), National Automotive Dealers Association, and Edmunds.
- Different factors will affect the value of your vehicle such as the mileage, the condition, your location, and the color of the car.
- Personalizing a car often has a negative effect on its value because trends constantly change, and everyone has different likes and dislikes.
Understanding How to Value Your Used Car
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 Edmunds. Pricing varies slightly between the three sources as they pull different data and use different algorithms to determine value.
Mileage and Condition
In brief, the main factors affecting a used vehicle's price are mileage and condition. Options, location, and color also playing a role.
“As mileage increases, so does wear and tear,” said Alec Gutierrez, Director, Product Management for Cox Automotive Inc. “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.”
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 is 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 certain areas. Convertibles and sports cars command higher prices along the coasts and in warmer climates, Gutierrez noted that four-wheel-drive trucks and SUVs do best in the Northeast, Midwest, and other areas that get a lot of snow.
Options and Add-ons
“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 syndicated columnist for NerdWallet, 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 absence, such as air conditioning, power windows, and door locks. These had been noteworthy options in decades past but are now 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.
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).
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.
Special Considerations When Valuing a Used Car
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 influencing factors. Those rules aren't absolute, however; what holds true for a 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.