How Much Is My Car Worth?

When people begin researching cars because they want to buy a new one (or pre-owned), they also want to know how much their current car is worth. Fortunately, the internet provides many tools and a ton of research to help guide you through this process.

If you type in "How much is my car worth" to the Google search engine, you will get over 377,000,000 results! Amazing, right? Where to start? Realize that there are probably endless websites that will give you a range of values for your car, but you don't need to spend hours and hours looking at them. Once you try two or three you should be able to get a good idea of the market value for your car. Let's try a few of the "big boys" in the market.

Kelley Blue Book Car ValuationThe most well-known is Kelley Blue Book, found at www.kbb.com. They have done a tremendous job of branding themselves as the go-to site for consumers on trade values, akin to Kleenex and tissues. They have a very easy to use interface, asking a few basic questions and whether you plan to trade it in at a dealership or sell it to a private party and what condition it's in. Note that you want to be honest with yourself here. If your car is not in "excellent" (less than 3% of cars in the market), don't use that metric. You'll only give yourself false hope! Be realistic and you'll generally be happier during the transaction. Anyhow, KBB gives you a range of what your car is worth in your area (ZIP code targeted). It does not mean that someone will give you that much for the car, but should give you a rough idea of what to expect.

Edmunds Trade-In Car Value AppraiselAnother popular site is Edmunds.com where you can start off with the same type of interface, although their questioning is a little more in-depth (and general, since it includes options that aren't necessarily available for your car) as they try to get as much information as possible to give you a number, which they refer to as their "True Market Value." It will break down the value of the car and each individual option by "Trade In," "Private Party" and "Dealer Retail." Just scroll to the bottom line of Total to get your range. Lexus of Milwaukee utilizes a trade-in car value appraisal tool that is powered by Edmunds on our own website. .

NADA Guides Car Price Values & InfoThe last one we'll examine is NADA (the National Automobile Dealer Association) Guides, found at www.nadaguides.com. Right away they will ask you for your ZIP code, which helps get the most specific information for cars in your area. From there, the interface is a little less obvious as it mentions new car prices and used car values. Use the drop down box to select your make of car and it will redirect you to the next steps, similar to the other sites. Their results page will give you a value based on condition, namely "Rough," "Average" or "Clean" plus a retail number. This is a bit nebulous as they don't tell you exactly what those terms mean with regard to your car's condition, but overall it should paint a picture for you.

If you utilize these three sites (or any others) you should see fairly similar pricing amongst them. If there is a wide disparity, make sure you entered all the information correctly. I would recommend printing out each of the results pages so you can reference them offline.

Now examine the difference between trading your car in and selling it privately. If you want to maximize the amount you get, selling it privately is the way to go, although you must know what you are getting yourself into. The old question of "what is your time worth?" will come into play, as you will have to place an ad (whether online, in the paper or a magazine) and do work of negotiating with another person like yourself. Remember that time is money, and the value of your car changes on a monthly basis (usually downward), so if it takes you a couple of months to sell it, expect to sacrifice at least a few hundred dollars. Also, beware of scam artists, who could be the topic of an entire blog themselves. Only accept a certified check or cash, and try to meet to finalize the transaction at a bank or credit union, no dark alleys or abandoned buildings!

If, however, you don't feel like getting in the car business and prefer to trade it in, you now have an idea of what you should receive in the form of a value from a dealership. Remember that they are a for-profit enterprise and want to take your vehicle in as inexpensively as possible, but they have to abide by the laws of supply and demand as well. That said, don't expect to get retail value for your car, as that's what they'll be asking the next person to pay should they trade for it. Trade in value is always a few thousand less than retail because the store will fully recondition your car before offering it for sale. You are in a strong negotiating position, and an informed consumer always gets a better deal than an uninformed one (and usually spends less time in the store when buying a new car). At the appropriate time, let the salesperson know that you've done your research and know how much you're going to accept for the car. If their offer is in the ballpark from what you've found, you know you're dealing with someone who is reputable and fair.

Also, in some states there may be a tax advantage to trading your car in. For example, you may be responsible for tax on the total trade difference as opposed to the selling price of your new car. Let's say you're buying a car for $30,000 and have a $10,000 trade in. The difference between paying tax on $30,000 versus $20,000 can be significant, depending on the tax rate in your area. Be sure to check this out before you decide on which route to take.

All in all, hopefully these steps help you in pursuit of your new car. As the old tv ads used to say, "Knowledge is power!"

Categories: Car Shopping Research
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