What you need to know
Cars are expensive items that, unlike homes or jewelry, lose value the longer you own them.
The most important items in determining your car’s value are its age and condition. Go over the car and ask yourself the following questions:
- Does it have high mileage?
- Is the exterior scratched or dented?
- Is the interior stained, ripped or smelly?
- Is the car clean?
- Were extra items — such as specialty pedals or seats — added to the car that could detract from the its value?
After determining the car’s condition, search to find the its fair market value. Whether you are selling your car or looking to donate it, the Internal Revenue Service recommends any of the widely used auto guidebooks, such as the ones from Kelley Blue Book, Edmunds or the National Automobile Dealer’s Association.
Each of these sites asks you to answer general questions about the car and to list the car’s extra options.
- Knowing how much your car is worth can help you when selling, trading it in or calculating the tax deduction after donating it. Knowing the value is also good for insurance purposes.
- Recently, the high cost of gas has begun to take a toll on the value of large vehicles that use a lot of fuel. Such vehicles are becoming more difficult to sell or trade in.