A guide to car appraisal

Man looking at a car and taking notes on a clipboardImage: Man looking at a car and taking notes on a clipboard

In a Nutshell

Getting a car appraisal before you buy, sell or trade a car can help you get a sense of the vehicle’s value and put you in a more informed position to negotiate. A variety of factors can affect a car’s value, such as your location and what kind of buyer you’re selling to (if you’re selling). Where you go to get your car appraisal could also affect the estimate you receive. Online guides, lenders, car dealers and professional appraisers can all offer car appraisals.
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Maybe you’ve fallen in love with a used car and want to buy it — or maybe you’re plotting to get rid of your own vehicle. In either case, your next move should probably be figuring out what those wheels might be worth.

If you’re buying, selling or trading a car, an auto appraisal can give you an idea of what the vehicle is worth. Learn more about your appraisal options so you can decide which best fits your needs.

What is a car appraisal?

Also referred to as a valuation, a car appraisal assigns an estimated dollar value to a vehicle. There are a few situations where you might consider an appraisal:

  • When you plan to buy, sell or trade in a car and want to estimate the car’s fair market value
  • To put a dollar value on a car when it’s considered an asset in a divorce, bankruptcy or estate
  • If you’re planning to buy or sell a collectible car

Factors affecting a car appraisal

Many factors can affect a car’s value, including make, model, age, wear and tear, body damage and optional features. Here are some other additional factors that can affect a car appraisal.

1. How the buyer plans to use your car

“A buyer’s plans for your car could play a big role in determining your car’s value,” says Matt DeLorenzo, senior managing editor for Kelley Blue Book. “There are varying value levels depending on what you want to do with the car.”

“A dealer who can shine up your trade-in and sell it on his lot will likely pay more than the one who’s going to unload it at the next auto auction,” says Mel Yu, automotive analyst for Consumer Reports.

And selling to private buyers might fetch the biggest offers because they typically don’t plan to turn around and sell for profit.

This is why valuation guides will give you different values for different types of sales. “Trade-in value is completely different from sale value,” says Matt Jones, senior consumer advice editor for Edmunds.com.

2. Mileage

“The average driver covers 12,000 to 15,000 miles each year with the vehicle,” says DeLorenzo. If your odometer’s racking up much more than that, your car value could take a hit.

3. Your location

As with real estate, location matters. For example, your convertible might have a higher value in Miami than in Montpelier, Vermont.

4. Maintenance

“A dealer will often check your service records to verify that the vehicle’s been maintained,” says DeLorenzo. Similarly, private buyers might ask for service records as proof that you’ve had all scheduled maintenance performed.

Where can I get a car appraisal?

If you’re buying, selling or trading in your vehicle for a new car, you might want to use more than one appraisal method to make sure you’re getting an accurate assessment. There are several ways you can go about getting a car appraisal,

Guide books/valuation websites

Websites like Edmunds, Kelley Blue Book or NADA Guides allow you to enter your auto’s make, model, trim level and year and factor in upgrades, mileage, your location and the car’s estimated condition. Once you provide all the information, you can instantly get an idea of the book value in various situations, such as trading it in at a dealership or selling to a private party.

Why you might choose this option: You’re buying or selling a car and want to do research on the car’s fair market value before you visit the dealership or list it privately.

How you can use the appraisal: Once you have an idea of what buyers in your area are paying for the same car in a similar condition, you can use that information during negotiations with the car dealer. If you’re selling, you can also use this information for car pricing. But keep in mind that these appraisals are estimates.

“An online appraisal is helpful, but it’s not the gospel,” says Jones.

Since these guides provide an estimate, it’s smart to supplement this pricing information with dealer estimates.

Cost to you: Free

Dealership appraisal

With a dealership valuation, someone at the dealership will look over your car and tell you what they’ll pay for it.

And yes, you can negotiate. “Never take the first offer,” says Jones. “It’s unlikely that the dealership will give you the most value for your car on the first offer.”

Jones also suggests being prepared to explain why. “But frame it in terms of the research you’ve done on the car value, not the amount you need to recoup,” he says.


If I get an appraisal, do I need an inspection?

An inspection and an appraisal are two very different things. An inspection is done to spot issues like body damage, hidden damage or mechanical problems.

“If you’re buying a used car from anywhere, it’s smart to have an inspection,” says Yu.

An auto inspection generally costs around $100 to $200.

Why you might choose this option: You’re considering selling your car to another dealer or trading it in and want to get an idea of what dealers in your area are paying. Or you might want to sell it to this dealer — if the price is right.

How you can use the appraisal: “Compare the appraisal against other dealers’ valuations. Take it to more than one dealer,” says DeLorenzo. If you only visit one dealer, “you’re negotiating against yourself.” It’s also smart to check these appraisals against valuation guides, too, to help confirm you’re getting accurate estimates.

Lender appraisal

If you’re considering applying for financing a car outside the dealership, your lender can provide an estimate of its value. Typically, banks and credit unions include a car’s value in their loan calculations, says Yu.

Why you might choose this option: You’re buying a car and getting financing through your bank or credit union. You want to know if the value your lender estimates matches the car price. “If the lender says the car is worth less than the asking price, that’s a red flag,” Yu says.

How you can use the appraisal: This information can be a negotiating tool, especially if the seller’s price is too high — or a reason to walk away from the deal.

Cost to you: Some lenders provide the estimate for free as part of the loan application process, because your approved loan amount might be determined, in part, by the car’s value.

Independent professional appraisal

With an independent appraisal, a professional independent appraiser examines the car from bumper to bumper, researches sales of similar vehicles and places a value on your car. But this option is only for a few specific situations, says Jones.

Why you might choose this option: You’re buying or selling a collectible car or need a value assigned to the car because it’s considered a legal asset in a divorce, bankruptcy or estate.

How you can use the appraisal: If you’re buying a collectible car, you can use the appraisal to drive a better deal on the car — or just make sure it’s worth what you’re paying. If you’re selling, an independent appraiser can certify their valuation of the car’s worth.

Cost to you: It varies, but the general range is from $100 up to $750, says Roy Theophilus Bent Jr., CEO of the Bureau of Certified Auto Appraisers and a certified appraiser and president of Houston Auto Appraisers.

Bottom line

Doing some homework on a car’s value can help make you a savvier seller or buyer — and a better judge of whether a particular car deal is the right one for you. The information you get from a car appraisal can also come in handy during negotiations. And if you don’t feel comfortable with the final offer from a seller or buyer, remember that you can always walk away.

About the author: Dana Dratch is a personal finance writer (and coffee fanatic). She covers credit, money and lifestyle issues. Read more.