Auto Loans
How Does LendingTree Get Paid?
LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.
How Does LendingTree Get Paid?
LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.
Jill A. Chafin
Jill A. Chafin is a staff writer at LendingTree. A seasoned pro in the field of savings and personal finance, her work has appeared on the Motley Fool’s Blueprint, How-to Geek’s Life Savvy and her own blog.
More from the writer
Jenn Jones
Jenn Jones is a former senior writer at LendingTree, where she covered personal finance. She was previously an automotive finance manager.
More from the writer
Michael Kitchen
Michael Kitchen is a senior managing editor at LendingTree. A veteran news journalist, he has previously worked for MarketWatch, Dow Jones Newswires, Voice of America, Time Magazine, National Public Radio and others.
More from the editor
Stephanie Cervone
Stephanie is a freelance writer and copy editor with a bachelor's degree in linguistics from the University of Toronto.
More from the editor
Updated on:
December 2nd, 2023
Content was accurate at the time of publication.
We are committed to providing accurate content that helps you make informed money decisions.Our partners have not commissioned or endorsed this content.Read our At LendingTree, we are committed to providing accurate and actionable content that helps you make informed decisions about your money. Our team of writers and editors follows these key guidelines:Editorial Guidelines
Determining how much your car is worth depends on multiple factors, such as its age, mileage, features and condition. Valuation guides like Kelley Blue Book and Edmunds can provide a car value estimate, helping you negotiate a more favorable sale price with a dealer or private buyer.
The value of your car depends on how you sell or buy it, such as doing a dealer trade-in or a private sale. Here’s an overview of the types of car values and how to decide which method is best for your situation.
Value types for selling a car
- Trade-in value: Although trading in a car at the dealership will likely get you the lowest value, it could save time and effort and help you avoid scammers. Some states will reduce your new car’s sales tax by subtracting your trade-in value, which could make the trade offer more lucrative.
- Private seller value: You can typically earn more money by selling your car on Craigslist or a similar online platform, but you’ll have to deal with emailing strangers and setting up appointments. Make sure to watch out for signs of scams with this method.
Value types for buying a car
- Private-party value: A used-car buyer could find a great deal by buying directly from the owner, since dealers tend to jack up car sale prices. Just be sure to get a used car inspection before proceeding with any private sale.
- Dealer retail value: This is the purchase price tag listed on a car’s window at a dealership, typically much higher than the trade-in or private-party value. Watch out for car dealer fees, which can add 8% to 10% of the car’s price.
- Certified pre-owned (CPO) value: A CPO vehicle is like a premium used car, since it’s still within warranty and passes a strict inspection. Although CPOs have a higher price tag than regular used cars, they typically come with the manufacturer’s stamp of approval and an extended warranty.
Get Auto Loan Offers Today
Other car value terms to know
- MSRP (manufacturer’s suggested retail price). The MSRP is the standard new-car price the manufacturer sets for that model and year.
- Asking price/sticker price. The asking price is what the seller (perhaps yourself) advertises for the car. It’s common for buyers and sellers to negotiate a listed car sale price.
- Agreed-upon price/closing price. The closing price is what the buyer pays after all negotiations are complete. Make sure to obtain or write a bill of sale as a way to show the vehicle changed ownership.
2. Review car pricing guides
Online car price guides can be a great tool to help you determine your car’s worth. Plug in your car’s basic info like age, mileage, features and condition, and the guide will show a range of values.
Here are the three industry-standard car value guides:
- Kelley Blue Book: Named after the actual blue books it once published, Kelley Blue Book (KBB) has become a trusted resource for car valuation for over 90 years. KBB also provides an Instant Cash Offer, which can be used at participating dealerships.
- NADAguides: The National Automobile Dealers Association (NADA) represents franchised dealers and allows consumers to access its free retail valuation guide. For a small fee, you can also get an AutoCheck Vehicle History Report when shopping for used vehicles.
- Edmunds: Edmunds’ True Market Value (TMV), also called Edmunds Suggested Price, calculates average transaction prices for used or new cars in your area to help you start fair negotiations.
KBB vs. NADA vs. Edmunds
If you enter the same vehicle’s data in all three car value guides, you’ll get three slightly different values. This is because each organization evaluates different criteria.
The Kelley Blue Book values tend to be lower since they look at the vehicle’s condition, popularity and local market trends.
NADA prices, on the other hand, tend to go higher since they assume most cars are in good condition.
Edmunds provides data about average car sales in your area and helps calculate additional costs buyers might not consider when making a car purchase, such as depreciation, insurance premiums, maintenance, fuel costs and more.
Ultimately, you can start by quoting the highest value from all three car guides when selling a vehicle. Otherwise, cite the lowest value when purchasing your next car.
Using online retailers to estimate your car’s value
You can also use companies like Carvana and CarMax to value, trade, sell or buy vehicles — all from the comfort of home. Again, these price quotes will vary based on each company’s evaluation process, such as the car’s condition, features and current market values.
If you want to sell a car online, weigh the pros and cons of Carvana versus CarMax to find the best service for your needs.
Carvana accepts low credit, while CarMax offers 24-hour test drives. Both companies offer pickup services in some locations.
Having the following information ready can help you get the most accurate estimate of your vehicle’s value.
- Year, make, model and trim: You can find your vehicle’s specs in the owner’s manual, on your title or by using a free vehicle identification number (VIN) check tool like Carfax.
- Color and features: Every detail of your car is essential when determining its overall value. Be specific about your car’s color and bonus features like leather upholstery, a sunroof or heated seats.
- Mileage: Cars depreciate as the odometer and expected service costs increase. Providing the most current odometer reading can help generate a more accurate estimate of your car’s worth.
Adjust price based on car's condition
After entering your vehicle’s basic details and mileage, you’ll need to assess its overall condition to determine the market or trade-in value.
Each pricing guide helps you evaluate your car’s condition based on engine health, cosmetic status, anticipated repairs and other factors. For example, Edmunds has five different conditions to pick from:
- Outstanding: Practically brand new, with no signs of wear.
- Clean: Normal wear, with no major mechanical or cosmetic problems.
- Average: May have a few minor issues and need some reconditioning but is still in good condition.
- Rough: Noticeable wear, with significant mechanical and/or cosmetic issues.
- Damaged: Likely in non-safe running condition, requiring substantial repairs to get it back on the road.
Be honest about your car’s condition in order to receive the most accurate estimate.
4. Use live examples to determine price
While online pricing guides can help estimate your car’s value, it’s important to look at the going prices for comparable vehicles in your area. Dealer advertisem*nts, Craigslist car listings and other car-buying sites can provide live examples to help you determine what your car is worth.
Evaluating your car’s value is only one step in the buying or selling process. Here are some critical questions to ask yourself to help you decide how to proceed with a car sale:
How much do you want to get for the vehicle? If you want to get the most for your vehicle and don’t mind putting in the legwork, consider listing it privately.
What is your budget to buy a car? The 20/4/10 rule for car buying can help you stay within your budget. With this method, you put 20% down, get a repayment term of four years or less while keeping your monthly transportation costs below 10% of your income.
Our auto loan calculator can help estimate how much you can afford before shopping for your next car. And be sure to check out our first-time car-buyer guide for ways to improve your credit score and secure a competitive auto loan.
How quickly do you want to complete the transaction? If you want cash now, selling your vehicle to a car company or a dealership will likely be the fastest option. Working with a dealer is ideal if you want to sell and buy a car simultaneously, since most dealerships provide competitive trade-in offers.
How much energy and time can you put into selling or buying? Although you’ll likely earn more money by skipping the dealership, the effort involved might not be worth it. Selling directly to another person includes posting advertisem*nts, communicating with potential buyers and completing the car title transfer paperwork at your local DMV.
Buying or selling directly from another person also involves meeting strangers for test drives, which can make some people feel uncomfortable.
You can find the estimated trade-in value of a car by using an automotive industry-standard pricing guide, such as Kelley Blue Book (KBB) or Edmunds. You’ll need to enter your car’s year, make, model, mileage, features and current condition.
While the trade-in value can give a ballpark figure of your car’s worth, a dealer will likely make an offer below the vehicle’s resale value. This is to budget for any repairs so the dealer can resell the car at a profit.
You have several options for trading in or selling a vehicle when you still have a loan.
If your estimated trade-in value exceeds your current balance, it could be worth paying off your auto loan early. But be prepared — some lenders might charge a prepayment penalty.
For a car with a trade-in value below your current balance, a dealer might suggest rolling your existing loan into a new loan. Note that this will increase the overall cost of your new auto loan.
If deciding between trading in or refinancing your car loan, consider your credit score, the car’s value and your long-term financial goals. Refinancing could reduce your monthly payments and get you out of debt faster — but only if you can secure a lower rate. However, if you need a more reliable car, then trading in makes more sense.
You can estimate your car’s value using an online pricing guide like Kelley Blue Book (KBB), Edmunds or NADA. After entering basic information about your vehicle, such as its make, model, year, features, mileage and condition, you’ll get an idea of what you could make if you sold your car.
You can also use online retailers like Carvana or a CarMax appraisal to receive a cash offer for your vehicle based on local market conditions.
While these tools can offer a range of prices, there’s not an exact car value lookup for your vehicle, since prices will vary based on what people in your area are willing to pay for your specific car.
Kelley Blue Book (KBB) and NADA are online pricing guides to help you estimate your car’s value.
While both services provide valuable insights into your car’s value, KBB tends to look at more factors than NADA. For example, KBB adjusts the value based on the vehicle’s condition, whereas NADA assumes most cars are in good condition.
When determining your car’s value, you can use both resources to access a range of values. Use the higher values when selling your vehicle, negotiating to a lower amount if you can’t get your asking price.
Compare Auto Loan Offers
Autos Resources
Best Car Loan Rates
Auto Refinance Rates
Auto Payment Calculator
Car Affordability Calculator
On this page
- 1. Pick the type of car value
- 2. Review car pricing guides
- 3. Gather car information
- 4. Use live examples to determine price
- Evaluate your needs
- Frequently asked questions
Recommended Reading
Extended Car Warranty: Is Extra Protection Worth the Price?
Updated January 27, 2023
An extended car warranty is intended to pick up where your manufacturer warranty ends, but it the extra protection worth the cost? Read more about extended warranties.
READ MORE
Can You Return a Car After Signing?
Updated July 28, 2022
Changed your mind about buying that car? It’s difficult to back out after signing, but not impossible. Returns may be allowed in a few instances and places.
READ MORE
How to Get an Instant Auto Loan
Updated July 18, 2023
Getting an instant auto loan may seem difficult. Here’s how to get an instant auto loan fast with less hassle.
READ MORE
