How do you determine your car value?
Every seller who starts to think about selling their car must ask themselves, “What’s my car worth?” There are many tools and resources out there to try and gauge the value of your car. These resources include Hagerty valuation, NADA, Kelley Blue Book, Edmund’s, and so on. Typically, these resources are basing values off selling prices from various online and in-person auctions, marketplaces, etc. Examples of these sites are BaT, Hemmings, NADA, Autotrader etc. The valuation tools will capture the sale price, both high and low, and give an average sales price.
Should I base my car’s worth solely based on a valuation tool?
Soley using a valuation tool to determine your car’s worth leaves a lot to desire. While valuation tools can provide you with a value range, there isn’t enough context as to the conditions of each of the vehicles that contributed to the value calculation. I would use the valuation tools for a baseline. Then, contact an expert on the make and model to get their expert opinion of the value. You can usually Google these kinds of experts or reach out to your trusted social media contacts to steer you in the right direction.
Even in-person auctions don’t always give a realistic picture of a car’s worth. As an example, I have been to several in-person auctions and watched a vehicle roll across the block and sell for big money. Even though the selling price is largely driven by supply and demand, I also wonder if the very car that I just saw roll across the block was worth the price it sold for.
Just out of curiosity, when that vehicle is parked back outside in the sold lot, I will head over and do my inspection. Nine times out of ten, after giving the vehicle a good once over, I am amazed at the money it brought and second of all, the actual condition.
Do in-person auction sales skew a valuation tool’s algorithm?
Yes, this can certainly happen. Why? Many of the big in-person auctions I have attended are fueled by alcohol and egos and this does not result in an accurate valuation of the vehicle. Sure, a nice paint job with popping chrome looks good, but when I start crawling around on the ground and see surface rust, structures that are rusted all the way through, heavy undercoating, and just simple parts or components that weren’t replaced or restored, I think, “This car isn’t worth anywhere close to what it brought.” My case and point – these resources mentioned above are going off past sales to publish their valuations without really knowing the true condition of the vehicles.
Should you even use a valuation tool?
Valuation tools serve a purpose and that is to potentially give some idea of your car value, but keep in mind that it is only a ballpark figure. You must take several things into consideration including the condition of your vehicle.
Is it truly in excellent condition or does it have minor flaws? Is it a low mileage vehicle? Do you have supporting documentation on mileage, previous owners if applicable, maintenance, restoration work, fender tag, and build sheets? Has it been verified as a numbers matching vehicle? All these factors play a role in the value of your vehicle. Just because you’ve seen another one sell for an extreme amount of money, does not mean you will get that for yours.
Perception vs Reality: How to settle on your car value.
To be realistic about what your car is worth, look at valuation sites. Then, look online for the same vehicle in the same general condition as yours. Manual transmission cars will generally bring more money than automatic. Talk to reputable industry experts to gauge the price of your vehicle. You can get an appraisal, but they also go off of past sales to determine a value.
Also, consider the time of year. Convertibles seem to bring more money in the Spring and Summer than they do in the winter. Finally, if you really want to sell, don’t try to set a record that will not be achieved by setting your reserve too high. It is understandable that a lot of owners have sentimental feelings about their vehicles. This can sometimes lead them to set an unrealistic reserve and the vehicle not selling.
In a lot of car builds, the sellers have put an extreme amount of money into a car. They are expecting to get it all back out and most of the time that does not happen. Research reveals that most restomods or custom cars will be lucky to bring 50 cents on the dollar unless they are built by a big brand, and then you are just paying for the name.
Price the vehicle so you will feel good letting it go for the amount you decide on. If you want too much money for it, you probably don’t really want to sell.
In closing, sellers need to be realistic about what they are selling and what it will actually bring in. Most cars are not investments and will only fetch what someone else is willing to pay.
By Jim Ochs
