How Much is My Car Worth?
Car owners who want to buy a new car might consider selling their current car or using it as a trade-in. The sale of the vehicle can be used as a down payment for a newer model and using the trade-in can help offset the cost of the new purchase, too.
How much is my car worth? Buyers might be completely in the dark about the value of their current car. However, knowing the resale value or trade-in value can help ensure that car owners get the best price possible.
What impacts the value of a vehicle? Cars unfortunately lose value once they are driven off the lot, and the vehicle typically depreciates the most during the first few years. When determining the resale or trade-in value of a vehicle, several factors are taken into consideration including:
How to Find the Resale Value of a Vehicle
Selling a car privately can enable the car owner to get the most money possible for their vehicle. How much is the car worth, though? What is a fair sale price?
Kelley Blue Book (KBB) is the best resource for car owners who need to uncover the value of their vehicle. KBB let’s car owners find the resale value of their vehicle by entering information about their car.
KBB will ask car owners either for their VIN or license plate number or the make/model of the vehicle. If the owner doesn’t know the VIN or plate info, search by make/model. To determine a fair resale value, car owners need to enter all the info about their car. Include mileage, age, any upgraded features and the overall condition.
While it can be difficult to accurately determine the condition, KBB offers explanations to car owners on what constitutes good, fair and like new conditions.
Selecting a better condition than the real condition of the car will only give car owners an inflated price, so honesty is important. A buyer does not want to be surprised when they see that the car looks nothing like it was described.
Once buyers have added in all the applicable information, KBB will show an estimated value. The site also will show a range, too. Car owners can use this information to set their sale price.
However, car owners who are planning to list their car for a private sale also should research the competition. What are the price points of comparable models? Ideally, the ‘for sale’ competition should be in a similar price range. If there’s a lot of competition, though, car owners will want to post lots of pictures and include good descriptions about any upgraded features.
Finding the Trade-In Value of the Vehicle
Some car owners don’t have the time to list their car for a private sale; others just don’t want the added stress of trying to sell their car or deal with buyers. The easiest solution is to use the vehicle for a trade-in or sell it to the dealership.
Car buyers need to understand, though, that the dealership wants and needs to make a profit. While a private buyer will drive their car for their personal use, the dealership will sell the vehicle to another buyer. They will need to build a profit.
Expect to receive a lower price for a trade-in or when selling to a dealership. However, car owners still need to research the value of their vehicle. In fact, understanding the trade-in value could help owners negotiate a better price for their car.
Use KBB to find the trade-in value of the car. The process for determining the trade-in value will be the same as finding the resale value. The trade-in value will be lower, but KBB also includes a range.
If the dealership tries to offer a lower price, car owners might start negotiating. Owners also could walk away and visit another dealership if they feel that the trade-in offer is simply not equitable.
Before Selling, Know the Outstanding Loan Balance
There is another major factor that can impact the resale value or the trade-in value of a vehicle: an outstanding loan balance. Whatever the car owner owes to their lender must be paid before the vehicle can be purchased by another buyer.
The lender holds a lien on the vehicle, and the lien can only be lifted when the lender is made whole. Before selling, car owners should contact their lender and inquire about the payoff amount. This is typically different from the balance on the statement; the payoff amount might include interest plus fees (some loans have early termination fees).
Subtract the amount owed from the value of the vehicle (trade-in or resale). If the loan balance is larger than the value of the vehicle, then the owner is upside down on their loan. While an outstanding balance could roll into a new loan, this would likely make a new car underwater (or have negative equity).
Car owners with negative equity might opt to hold onto their vehicle until they pay off their loan. However, instead of buying a new vehicle, car owners also could refinance their loan to hopefully secure a lower interest rate or pay off the loan quicker.
Can a car owner sell a vehicle with a loan? They need to contact the lender to see what the process might be for this situation. Since the lender has interest in the vehicle, the borrower needs to reach out to the lender in order to explore their options.
How Does a Trade-In Affect Vehicle Financing?
Car owners who have a trade-in when buying a new car can use Carzing to find out how their vehicle’s trade in value can affect the financing for a new car. As a trade-in will help offset the cost of the new vehicle, financing needs could be less (depending on how much the car is worth).
Carzing lets car buyers get pre-qualified for financing. To get pre-qualified, buyers will need to enter some basic information related to work history and home payments (rent or mortgage). Carzing also lets buyers include the value of their trade-in.
Carzing will show the buyer all the financing options for which they might qualify. The monthly payments and down payment information will be adjusted to include the trade-in value.
Buyers can review all their options and print out a voucher with the loan that is best for them. They can take the voucher to the dealership, complete a credit application to get approved for their financing and, hopefully, finalize the deal.
When a car owner needs to trade-in or sell their car to help finance the purchase of a new car, they should research the value to better understand how much their car is worth. KBB lets buyers search for either the resale value or the trade-in value.
When using the car as a trade-in, buyers who know the value of their car might be in a better negotiating position to get the best price possible for their trade-in. However, car owners need to understand that the trade-in value won’t be as high as the price they might receive via a private sale.
Some owners find that it’s easier and less stressful to use their car as a trade-in or to sell it to a dealership. Others, though, want to sell the car privately to make the most money. Understanding the car’s value, though, ensures that buyers get the best price for their car and don’t walk away feeling the sting of seller’s regret.