When it comes to most buyers, there’s a certain assumption about the value of one’s car that gets entrenched over time. Maybe it’s the value from when the owner bought it, less a few years of depreciation from some general understanding.
Or maybe it’s based on the single comment received from a neighbor about “nobody wants sedans these days” or “those oldies just don’t hold any value.” Either way, most individuals have a number in their heads that doesn’t quite correlate with what the used car market values their car today. However, for many, that number is substantially lower than what it truly should be.
The used car market shifted dramatically in the last few years, and many people who own vehicles haven’t had the chance yet to catch up to their circumstances. Cars that people thought were junk were getting decent amounts. Cars that typically depreciated quickly were holding their values better than anticipated. Cars with features typically reserved as standard had much more value than anticipated these days.
Why Your Estimate is Off
It’s simple math, really. To determine the value of your car, you appreciate it based on what you bought it for, subtract years until now and voila, value obtained. The problem is there’s no longer a uniform pattern to depreciation used to gauge an accurate read. Supply chains, demand shifts, and changed buyer perspectives have seen everything go a little haywire when it comes to valuing a used vehicle.
For example, say someone bought a mid-sized SUV a couple of years ago because it was reliable and it was expected to be worth at least 50 percent of its value in five years down the road due to car ownership projections. That’s fair. But that same SUV might be worth significantly more if it has the right attributes, a V6 when they’ve all gone to turbo-four, physical buttons instead of touchscreen controls – and these attributes might garner much more interest based on what’s available out there today as opposed to what’s ideal three years ago.
The same is true for mileage estimates. Yes, 150k works less than 50k, but not as much as it would have previously if we’re speaking of a vehicle known to last longer. If it has a full service history and runs well, 150k shouldn’t bring down value as significantly as before if it’s known for longevity.
What Increases Worth
Several factors exist beyond expectation which raises values higher than most anticipate.
The shortage of new cars played a vital role. When vehicles became difficult to buy, and more expensive, they raised the used market level higher than anticipated. Even with new automobiles being driven off the lots these days, prices haven’t dropped where they should’ve been pre-shortage; therefore, relative to everything else, used cars are still going for more than anticipated.
Then, vehicles built from the late 2010s and early 2020s generally have everything buyers want – a good safety record and decent technology, but not so much of the complication or concern anticipated with brand new models. Buyers are looking for Apple CarPlay but not necessarily subscription-level heated seats. They’re in search of lane assist and rear cross-traffic detection but still uncomfortable with semi-autonomous driving technology. Therefore, anything considered relatively modern but not too modern is worth more than expected.
What Lowers Worth but Really Doesn’t
People worry about little cosmetic mistakes that don’t necessarily factor into value as much as people think. A dent? Sure, not great but it’s not killing your pricing. A paint chip? It stings but when’s the last time you saw someone get dinged for fuzzy paint? These things matter? Yes, but are they deal breakers? No.
What matters are miles and mechanical condition/service history. A couple of dings on a well-serviced vehicle might go for more than perfect paint with shoddy maintenance. People have gotten wise, the maintenance records trump the looks when buyers see a well-worn vehicle versus one without any sign of wear-and-tear with no service history.
And even accidents don’t kill value like they used to if there’s documentation of repair and cleanliness along the way. People have become comfortable enough with vehicles that were properly damaged and restored, this helps keep value where it needs to be depending on where it actually sits.
Why Supply and Demand Work for You
This is especially true if you’re in possession of a type of vehicle that is desirable right now. If you’re in a position where you could investigate a “sell my car” option through certain services online that can evaluate conditions in the current market as opposed to outdated depreciation offerings, then you’re golden.
For example, family-friendly SUVs with three rows are extremely popular these days, and good options look like they’re worth substantially more than they used to be. Similarly, certain utes are enjoying better options – dual-cab versions with decent specs since everyday transportation isn’t anything overly glamorous.
Petrol economy cars are also seeing inflated values because buyers are looking at any vehicle that isn’t guzzling gas as better than standard options; a poorly equipped hatchback is getting premium price because buyers don’t care how boring it is, they want something smaller that can easily fit into anything without excess fuel usage.
The Age Gap People Forget
There are specific years where cars inflate owners’ values substantially, three to seven years old tend to be the lucky ones since they’re past the initial depreciation curves but still in a spot where they garner attention based on useful components.
This often flies under the radar for owners who think they got in trouble because they started noticing their vehicle lost a ton of value in its first two years; they presume it stayed the same course, but for those who have taken care of their cars, it often does not.
What Actually Matters
If you want top dollar, one thing can increase it for sure, maintenance history. Vehicles with proven service expectations go for thousands more than those without because it’s not about what was done, it’s about documentation proving it was done.
One-owner cars will also be higher than cars purchased by multiple owners during their time, even if illogically, it doesn’t matter, increases happen naturally; similarly, factory options count, but maybe not what you’d anticipate, instead of leather seats or sunroofs, those modern options with proper technology for safety and sound really make the difference.
The Seasonal Component
Values go up and down seasonally for surprising reasons, convertibles sell for more in spring/summer versus four-by-four vehicles in winter, and family cars get boosted around back-to-school time. Understanding these fluctuations means someone with precise expertise can help garner thousands more than just taking pictures and putting them online.
Right now, values for sellers are astronomically better than they were five years ago; checked inventory has typically brought buyers multiple people interested in vehicles with good specs, natural inflation occurs at this point without needing any enhancement.
Where To Check
If there’s a gap between whatever assessment you thought your automobile was worth and what’s currently going on in the market reality, and it should be, for good reason it’s worth checking instead of just relying on basic anecdotal depreciation logic.
Until someone sees your car in person and understands its specifications maybe it’s best to get an idea based on what’s currently going on right now as opposed to presumed value for an outdated concept of what depreciation might look like.
Things not quantified include interior plastics/wheel curbing/paint in sunlight/differences made from prior paint, all these combine what gets somebody across thresholds or limits when priced.
So many car owners either grossly overestimate or underestimate the value of their vehicles, and it’s typically underestimated, but old-time thinking does not apply in this situation. What you thought was an aging vehicle that’s getting worse by the day might actually be sought after but without knowing what buyers think versus what you’ve presumed, you’ll never know for sure.
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