A simple question with a not-so-simple answer: What, exactly, is my car worth?
Though we drive everyday, most of us think about buying or selling cars far less frequently. Since the car market isn’t usually top of mind, it can be hard to think about value of your car. So in general, we reference one-size fits all car pricing guides like Kelley Blue Book to act as a stand-in for a more precise pricing picture. In a perfect world where every market, every car, and every buyer are all the same, they can be good price anchors. But one-size-fits-all car pricing guides tend not to capture every element that could affect a car’s true value.
So we put together three real-world considerations that can impact car value that every buyer and seller should have in mind the next time they’re in the market.
The market’s effect on price
The laws of supply and demand lie at the heart of every transaction, and used cars are no different. What makes used cars different from more commoditized goods like milk and coffee beans is that supply and demand can vary widely from locale to locale. Another gallon of 2% milk on the shelf probably won’t make your jug much cheaper, but another red fifth generation Toyota Celica on the market could make yours harder to sell at its KBB value.
Other things like area dealer presence and activity, seasonality, and even weather can also impact car pricing. The best way to capture this would be to look at a variety of actual, live listings in your area, how long they’ve been on the market, and compare them to each other. Shift’s estimate tool actually does this precise calculation for you, and when you schedule an evaluation, our Car Enthusiast will actually show you a graph of local vehicle listings similar to yours for your reference.
The challenge of calculating features into car pricing
The car’s features can also throw a monkey wrench into an already tough calculation. How do the features of your car influence price? Well, it depends:
Paint color – 61% of the cars sold through Shift are black, white, silver, or grey. While not the most exciting, safe neutral colors are still the easiest to sell.
Bright or exotic colors can fare well among collectors and buyers looking on edges of the color palette, but because there are simply fewer adventurous buyers, you’ll either have to be more patient or lower the price of that lime green Beetle.
Transmission – Much to the dismay of car enthusiasts everywhere, fewer and fewer cars are being made with manual transmissions. As a result, fewer people are learning to drive stick. So if your ride sports a manual transmission, you are already significantly limiting your potential buyer audience and may have to lower the price or wait longer to sell.
Trim and package – While most used car shoppers would prefer leather seats and premium audio (hey, who wouldn’t?), whether or not they are willing to pay a premium for it is going to depend from buyer to buyer. Some people won’t buy cars without add-ons like sunroofs and backup cameras, so these tend to retain their value pretty well. Generally speaking though, the older a car is, the harder it is to recoup the original cost of your car’s options. As nice as the Lincoln Navigator’s $900 GPS was in 2006, its performance probably hasn’t kept up in the decade since.
Aftermarket parts – You’ll often see Craigslist listings that list out how much money has been put into the car in after market parts, but it’s almost never the case that these modifications ever bring a very good return on investment. In fact, because aftermarket parts have a poorer reputation for quality and durability, they could even hurt a car’s resale value. Some sellers will even reinstall the stock parts and just throw the aftermarket pieces into the deal (or sometimes not at all). When it comes to aftermarket mods, seller beware.
Not all damage is the same
It should come as no surprise that a car’s condition is a huge factor in determining its value, but when it comes to flaws, not all damage is the same.
Deployed airbags, wheel misalignment, and frame damage, for example, are far more likely to hurt a vehicle’s value than fender dents or paint scratches. The challenging thing with something like frame damage is that it’s far harder to spot for the average buyer or seller than cosmetic damage, which is just one reason that every car listed on Shift must first pass a 200-point inspection by our hawk-eyed ASE-certified master mechanics.
By that same token, not all repairs are the same, either. Even assuming that all repairs are done by an equally skilled hand (which isn’t always the case), some repairs can do more to improve a car’s value than others. Having serviced and listed thousands of cars, we’ve developed a sense of what repairs most improve a price (and which repairs even pay for themselves). We share this insight in a condition report provided to every Shift seller to get a better sense of the repairs they should make before they sell to get the highest possible price.
So if you find yourself confused about car pricing, you’re not alone—determining a car’s worth is no easy task. Know that car pricing guides such as KBB are just starting points. Look to adjust your price up or down according to the factors above, and if you’re ever looking for a second opinion, just stop by Shift’s quote estimate tool, which already takes your local market into account.