How Much Is My Car Worth?

How Much Is My Car Worth?
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Maybe you’ve decided that it’s time for some new wheels, but you’re the pragmatic sort who likes to enter into transactions with a firm handle on facts and figures. You’ll have to move your old car out of your driveway first, either by trading it in or by selling it yourself. In either case, you need a good idea of your car worth.

Unfortunately, it’s difficult to pinpoint the resale value of a used car down to the last dollar because so many variables can come into play. It can also make a difference whether you’re planning on trading it in or taping a “For Sale” sign to the window.

The Effect of Depreciation

Depreciation is a basic equation – it's the difference between what you paid for the car and what that same make and model is worth on today’s market. The value of your car decreases incrementally with every additional mile you drive.

Each mile points to more wear and tear on the vehicle. Your car’s value might be marginally more than others of the same make and model if you’re a homebody who has spent years just driving to the local supermarket that's five miles up the street. Presumably, other drivers put their tires to greater daily use.

The rate of your car’s depreciation also depends on whether you bought it new or used. New cars depreciate a cringe-worthy ​nine to 11 percent​ as soon as they’re driven off the dealer’s lot, and they drop the most value in the first year, according to Dave Ramsey. Depreciation slows down after that – at least a little – but your car is probably worth only about ​40 percent​ of what you paid for it if you’ve owned it for five years and subjected it to reasonable mileage.

Dave Ramsey indicates that make and model can affect depreciation, too. Luxury sedans took the biggest hit in ​2019​, while Jeeps and pickup trucks fared pretty well. But, it’s not just about mileage and depreciation. That would be too easy.

Those Pricey Upgrades You Paid For

You might think that all those fancy bells, whistles, trim level, options and upgrades you added when you bought your new car will increase its value now that you’re ready to sell, but this generally isn’t the case. Folks who are buying used cars tend to be looking for the very best deal out there, and that doesn’t include digging a little deeper into their pockets for those sweet options.

You’ve Been Diligent About Maintenance

On the flip side, it can add to your vehicle’s value if you can prove that you’ve pampered your car consistently throughout the time you’ve owned it. Ideally, you can provide meticulous records that show you’ve dutifully taken it in for all scheduled maintenance. And it will help considerably if it’s never been involved in even a minor fender bender, much less a significant accident that required heavy-duty repairs.

The Popularity Factor

The auto market is subject to the whims of the buying public. Some vehicles are considered to-die-for in a given year, while others languish on dealers’ lots as consumers yawn. Your car might be worth more if it’s on this year’s hot list, but if it’s one of those makes and models that aren’t popular, you might want to wait a while to sell it.

Certain factors can affect desirability and car prices. Reliable family sedans tend to find new homes more consistently and quickly than fancy sports cars, because the sedans have a reputation for holding their value. But this can also depend on the time of year when you’re selling. Sports cars – and particularly convertibles – tend to be more popular choices and bring in more money in the spring and summer.

Pickup trucks and similar vehicles that can be used by workers and contractors tend to be more consistently in demand, and fuel-efficient models are historically more popular than gasoline-sucking vehicles.

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How to Pin Down the Value of Your Car

The good news is that you don’t have to try to calculate the impact of all these factors on your own. Several companies specialize in zeroing in on likely sales prices for both new and used vehicles, although you need to adjust from these numbers for unusual wear and tear.

Consumer Report cites Black Book, which has been around since ​1955​. Its data and figures are based on both wholesale auctions and personal sales in the United States, and they’re updated weekly to keep pace with current market conditions.

Black Book shouldn’t be confused with the Kelley Blue Book value – these are two different options.

The Blue Book Used Car Guide is only updated annually, but it breaks down values into three separate scenarios:

  • What you can expect to get for your car from a private party
  • What a dealer is likely to give you for your car based on its trade-in value
  • What you'd likely have to pay a dealer for your car if you were looking to buy the make and model rather than sell it  

Edmunds and NADA Guides can also be helpful. NADA gives you a range of car valuations from highest to lowest based on your local market. In all cases, you need an accurate (and honest) list of your car’s condition, its color, features and options, its mileage and – of course – the make, model and year.

Another option is simply to get behind the wheel and drive to a few dealerships. Ask what they’d be willing to pay you for your car based on its age, condition, depreciation and popularity.

Turn the Odds in Your Favor

Use the researched value of your car as a starting point, then turn the odds in your favor from there. Not all of the factors that went into pinning down its value are within your control to change. For example, the odometer says what the odometer says. But you can improve your chances of selling your vehicle for a bit more in a few ways.

Make sure the vehicle is squeaky clean, both inside and out, and that it has as much eye appeal as possible. Don’t neglect the windows and the engine bay. The engine compartment should be clean and healthy-looking, too. It might mean digging into your pocket a little, but see what you can do to repair any paint chips or dents.

And there’s no law against starting high when you’re pricing your car and telling a potential buyer what you think it’s worth. Price it at ​$4,500​ if you actually want ​$4,000​ for the vehicle so you have a bit of room to negotiate without dropping below what you really want. Keep in mind that everyone likes to feel like they’re getting a deal, so they might be more likely to buy if you agree to sell for less than your initial asking price.

If You’re Giving the Car to Charity

All of these calculations assume that you want to know the value of your car because you’re planning to sell it. A separate set of rules come into play if you’re anticipating claiming a tax deduction because you’re giving the vehicle to a charity.

Your deduction is generally whatever amount the charity gets for the vehicle when it sells it. But in some cases, you might be able to take a deduction for the amount you found in one of those price guides if the claimed value is ​less than $500​, provided that the amount in the guide matches up with your vehicle’s make, model, year, condition, mileage and accessories.