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How to calculate the value of your car

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There are a number of reasons why it is important to know the value of your car. For one, it helps in obtaining the best price if you sell your car to a third party or trade in to a dealer for another vehicle. Today, many people research car values online before negotiating. Another area where knowing your car value may come in handy is in filing an insurance claim. If you are in an accident and total your car, it could help to know the value of your car before accepting the insurance company’s offer to compensate you.

Finally, any time you are negotiating over the value of your car — whether with a potential buyer, dealer or insurance carrier — it can help to have the confidence that comes with fully understanding how much your car is worth. With that knowledge, you might gain a stronger peace of mind once you have closed the deal, knowing that you arranged the best possible exchange.

What is the resale value of a car?

The resale value of your car is simply the dollar amount your car is worth at a later date when you want to sell it to a third party or trade it in for a newer vehicle. Put another way, the resale value reflects how much your vehicle type depreciates over time. There are online services available to help you determine how quickly your car will depreciate, which can be an important factor to consider when deciding on a car to buy.

How to calculate the value of your car

The value of your car depends upon several factors. Calculating the resale value can be a process, in which case being deliberate about each step can help along the way.

Gather information about your vehicle

Before attempting to calculate your car’s value, you will want to gather several facts about your vehicle. You should understand the car’s history and the factors that have contributed to its depreciation since its purchase. The key information generally required includes:

  • Make, model and year – Verifying that each of these pieces of information are accurate is important. It is not uncommon to confuse your model with another, especially if your vehicle model is no longer sold.
  • Mileage – When possible, obtain your mileage directly from your speedometer. This, along with the vehicle condition, are two of the most important factors in valuing your car.
  • Condition – Cars in excellent interior, exterior and mechanical condition will typically be valued at a significantly better price than vehicles in poor condition.
  • Features – Knowing all of your vehicle’s features may take some research as new features are always added to new models. Ask yourself what upgrades your car has, such as all-wheel drive, power steering or anti-lock brakes.
  • Color – As trivial as this may seem, color can make a difference in value. Yellow, it turns out, is one of the best colors for resale value. Even orange and green can do the same, primarily with sports cars. Cars with such colors tend to benefit from scarcity, while white, black and blue cars are common, do not often stand out and may have less demand.

Consult a pricing guide or car value estimator

Car value pricing guides are now everywhere on the internet and are relatively easy to use. They typically prompt you to pinpoint the factors mentioned above, which can help you determine the right value of your car. Here are three of the most popular car value estimator sites:

  • Kelly Blue Book: Kelley Blue Book (KBB), founded in 1926, is one of the most trusted sources for car valuation. KBB’s site directs you to enter information about your car and uses its own proprietary software to assess your car’s value. It does so by comparing your car to a host of car prices it receives daily from wholesalers, franchised dealers, auto manufacturers and others in the auto industry.
  • Consumer Reports: Consumer Reports is a well known and credible resource for all your needs when looking to purchase a car. Known for its reviews of new automobiles, the company also has a user-friendly site for valuing your car. The site includes a wealth of practical information regarding steps you can take to improve your car’s value.
  • NADAguides: NADAguides, established by the National Automobile Dealer’s Association, has access to a wide range of resources for car valuation, using data about millions of automobile sales, to help you value your car. The site also provides a useful archive of historical valuations of lines of cars, which can provide a more in-depth understanding of your vehicle.

There will undoubtedly be some variation in the values generated by each of these three sites and others due to each guide using a slightly different process of comparing data. These variations should not be significant, but make comparing values from several sites a useful step in ensuring you have the best information.

Research the market

There are additional steps that you can and should consider taking beyond obtaining your car’s value from estimator sites. Recognize that other factors may influence your car’s value. For example, there may be a seasonal influence on the demand for vehicles in general or yours specifically. For many reasons, your particular vehicle may be popular in your area. There may also be some unique modifications made to your car, which can boost or detract from its estimated value.

There are several steps you can take to refine your estimate to reflect local market conditions. You could search for your vehicle in your local paper’s classified advertisements or online sites such as Additionally, consider checking how your car or similar cars are priced and determine how your vehicle differs from these, perhaps with more upgrades. You may be able to get a better sense of how quickly your car depreciates by comparing it with others for sale.

Terms and phrases to know when calculating resale value for a car

When buying or selling a car, it is beneficial to know as much as you can about the terms and phrases used. Arming yourself with knowledge of your vehicle as well as the industry as a whole, can help put you on an equal footing. Here are some terms and definitions frequently used in the market that may be worth knowing.

Terms and phrases related to car value Meaning
Depreciation Car depreciation is the difference between what your car was worth when it was purchased and what it is worth at the time you decide to sell it. Depreciation reflects the wear and tear on your vehicle over time.
Retail value The retail value of a car is the amount a dealer is charging for a used car after it has been refurbished, following a trade-in. In other words, this is the price you will pay for a used car from a dealer.
Trade-in value This is the price a dealer will offer to pay you for trading in your car. This is what the dealer determines is the value of your car after considering the price that it will likely sell for after refurbishment.
Private-party value Private-party value is the amount that someone can charge in the sale of a used vehicle to another private individual. Note that a private-party value will generally be lower than a retail price because, in theory, the price does not include a markup for a dealer’s services.

Additional resources:

Written by
Rick Hoel
Insurance Contributor
Rick Hoel is an international business attorney and legal and insurance writer for Bankrate as well as and Over the last several years, he has covered topics dealing with personal and commercial insurance and technology and the law. Rick is General Counsel and Director of Risk Management and sits on the Board of Power Stow Americas Inc., a subsidiary of Power Stow A/S in Denmark, the world leader in the supply of tracked conveyor systems to the airline industry.
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