It’s a simple question asked by nearly everyone who is in the market for a new car or truck: How much is my car worth?
There is no simple answer, but there are several ways to determine your current vehicle’s true market value — that is, the dollar amount another person would be willing to pay for it and the equity it would represent as a dealer trade-in.
Amounts tend to differ considerably, as you will soon discover. But whether you plan to buy out the lease on your car, purchase a fleet vehicle, sell your car yourself or use it as equity in a new-car deal, you will need to know how much your car is worth.
Here are five ways to get started determining how much your car is worth.
1. Use an Online Calculator.
The fastest and easiest way to determine your car’s value is to enter its information in an online loan calculator. Free tools offered by Edmunds (which now owns the copyright for “True Market Value”), Kelley Blue Book and NADA Guides ask you to list your vehicle’s make, model, year, color, condition and mileage, then check boxes for factory options such as air conditioning, stereo equipment and upholstery. They will also ask for your ZIP code, because each site calculates your vehicle’s value based on how similar vehicles are priced in your region.
At the end, you will be presented with three progressively higher values: trade-in, private-party retail and dealer retail. The trade-in value represents the “wholesale” price, which is pretty much the only value dealers will see in your vehicle, and for good reason: They know they will have to spend money to recondition, market and house your car before they can sell it at retail. They may also choose to send it to auction, where wholesale value is all they can expect in return.
2. Check Out Some Third-Party Retailers.
When you sell your car directly to another person, you are the retailer, and you have the freedom to set your own price. Of course, given the volume of available true market value information, for most vehicles, you will have to set a fair price to draw much interest. That’s where third-party retailers such as AutoTrader, Cars.com and eBay Motors come in handy. You can search for “your” car and see what prices your fellow owners — and dealers — are setting.
You will also find that the best listings are the most robust. Dealers who list vehicles on third-party sites tend to list every feature, load each entry with exterior and interior photos and include links to vehicle-history reports that detail ownership history, accidents and recall work. They have learned that detail and storytelling sells cars, which leads to our next entry.
3. Research on Craigslist.
Craigslist.org is an online classifieds site that allows users to post and search for items, including vehicles, for free. Unlike the third-party retailers listed above, Craigslist is comprised of hundreds of sites for individual cities and areas. Dealers and vehicle owners use the sites to sell vehicles locally, and the prices they list can be a good indicator of where you should set yours.
Like the listings on third-party sites, the most effective entries on Craigslist are the most detailed, and the site no longer limits posters to four photos. You will find sellers who include photos of everything from the odometer to close-ups of scratches and dings, all intended to demonstrate the true market value of their offerings. Many also take time to explain why they are selling such a fine automobile, a detail too often missed by private sellers.
Craigslist ads also often include a classic example of overvaluation: Too often, sellers seek to recoup the cost of recent, needed replacement parts when they determine how much their car is worth. Unfortunately, a new part that is expected to last the lifetime of the vehicle does not increase its value — or at least not by the full cost of the replacement. So a new parking brake, for example, won’t affect your vehicle’s value the same way a new set of tires would.
4. Run a Dutch Auction.
Craigslist and other classifieds sites also offer vehicle owners who are in no hurry to sell their car or truck the ability to let the market determine its true value. This is accomplished by running a “Dutch auction,” in which a seller lists their vehicle for a higher-than-expected price and lowers it in increments. The price continues to drop until a buyer materializes or the seller’s reserve price is met.
If, for example, you own a 1969 Chevy Camaro SS convertible, you can expect to sell it for somewhere between $36,000 and $50,000. Let’s say you decide you won’t take any less than $39,000. You can post it on a classifieds site for $60,000 and note in your description that you intend to lower the price by $500 or $1,000 every day or every week until it sells.
The ticking clock will create urgency among potential buyers, who will know they may miss out if they aren’t willing to pay the current price. And if it still hasn’t sold by the time the price reaches your $39,000 reserve, the Dutch auction is over and it reverts to a regular listing.
5. Ask Your Local Car Dealer.
Finally, there is no harm in reaching out to car dealers in your area and asking, “What is my car worth to you?” Most dealers with robust used-car operations source the bulk of their inventories from auctions, but many also spend hours scouring third-party and classifieds sites for good deals on cars and trucks they know they can park on the front lines of their lots and sell for a decent profit.
Furthermore, car manufacturers have been known to eliminate or redesign popular vehicles to keep up with changing demands for design, size or fuel-economy standards. The 2001 Jeep Cherokee was the last of the classic, square-edged SUVs, for example, and the popular, compact Ford Ranger pickup was discontinued in 2011. Your well-maintained, low-mileage unit could prove tempting to dealers of those brands. In any case, you will have opened a dialogue and established yourself as a serious, educated, in-market car buyer.
By taking one or more of these steps, you will have a better idea of what your current vehicle is worth. Better yet, you will have assumed a commanding role in its sale or trade-in.
To help decide which route is best for you, check out our Big Question: Should I Trade-In My Car or Sell It Privately? Not selling? Download a checklist to help you prepare to buy and finance your car.