When it comes time to sell your car, getting the best price for it should be a primary goal. But figuring out what the best resale value is might be a little intimidating. There are some steps you can take to help determine a fair and realistic resale price for your used car, by using tools available from several websites.
Kelley Blue Book, Edmunds and NADA Guides are three of the most well-known websites with tools to determine resale value (also called residual value, retained value). Each site uses its own factors to arrive at an appraised value for your car. By using all three tools, you’ll get a better idea of your car’s resale value.
In general, what your used car will be worth to a buyer takes into consideration a number of factors:
- Depreciation – Often the most important part of buying a car is knowing its projected depreciation three, four and five years down the road. When selling a car, owners are sometimes dismayed to learn just how much their car has depreciated during the ownership period. According to the experts, the average new vehicle only retains about 35 percent of its original value after five years. Some vehicles, however, fare considerably better than others. If yours is one of them, the resale value will likely be higher.
- Market conditions – What’s the condition of the market? Are there good financing deals available for used car buyers? If a lot of cars like yours are coming off lease and for sale on dealer’s lots, this may affect what a private party will be willing to pay you for your car. Ditto if you’re trying to get top dollar from the dealer in a trade-in. If there are already dozens of cars just like yours on his lot, what he’ll offer you for a trade-in price will be commensurately lower – maybe a lot lower than you’d like.
- Brand perception – Used car buyers want a winner and are more likely to offer you a better price for a more prestigious brand or one that has a reputation for quality and reliability than a little-known or less popular brand.
- Economic outlook – If there’s a recession going on, selling your used car may be a little more difficult than if the economic outlook for the coming year is positive. While someone looking to buy a vehicle may consider a used car (yours) instead of new when the economy is in the tank, you still may be offered less for it than in rosier economic conditions.
- Supply and demand – No matter how well you’ve maintained your vehicle, if there’s a glut of them for sale, you’re not likely to get top dollar for it. Granted, you’ll get more for it than a comparable vehicle not kept up as well, but supply and demand always plays into how much your car is actually worth at the time you want to sell it.
- Popularity – Suppose your vehicle is a highly-desirable crossover SUV. such as the Honda CR-V. If the used car supply of this vehicle is tight, you’ll likely get a better price from a potential buyer. On the other hand, if the car you’re selling was never a big seller, the price you’ll fetch will probably be less than you’d like.
- Color – Buyers of used cars generally want cars in colors that reflect their popularity in the market. These include white, black and silver. If your car is an unusual or garish color, buyers are less likely to be interested, or will offer a price that’s lower than you want.
- Options – Selling a used car means offering potential buyers what they want to own. This typically includes a vehicle with popular options such as antilock brakes (ABS), alloy wheels, leather seats, navigation systems, parking sensors, and backup cameras.
- Condition – If your car is in tip-top condition, it’s considered “excellent” in the self-rating for the resale value calculators. There’s also “very good,” “good” and “fair” (on Kelley Blue Book), “rough trade-in,” “average trade-in,” “clean trade-in,” and “clean retail” (what a dealer sells it for) on NADA Guides, and “outstanding,” “clean,” “average,” “rough,” and “damaged” on Edmunds.
- Mileage – If your car is five years old and has less than 20,000 miles on it, the price a buyer will be willing to pay is likely to be higher than if it has 50,000 or more miles on the odometer, all things considered. In fact, all the resale value calculators require you input mileage as one of the data fields before determining resale value (or True Market Value, retained value, residual value).
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