How to Properly Value a Vehicle


When you are thinking about buying a new or used car, it is important to know how to properly value the vehicle. This will ensure that you do not overpay for the car, and that you are getting a fair price. There are a few different factors that you will need to consider when valuing a vehicle.

The Kelley Blue Book Approach

The first step is to find the Kelley Blue Book (KBB) value of the vehicle. The KBB is an authoritative source for car values, and you can look up a vehicle’s value by make, model, and year. You can also find the KBB value of a vehicle on many dealer websites.

Once you have the KBB value, subtract any outstanding loan balance from the total. This will give you the equity, or ownership stake, that you have in the vehicle.

Next, subtract any money you would need to put down as a down payment on a new vehicle purchase from the equity amount. This will give you an estimate of how much cash you would have available to put towards a new car purchase.

Finally, add in any trade-in allowance you might receive from a dealer towards the purchase of a new car. This will give you your estimated total purchasing power for a new vehicle.

The Edmunds Approach

Accurately valuing a vehicle is essential when buying or selling a car. There are many factors to consider, such as the vehicle’s condition, features, mileage and even the local market conditions. Fortunately, Edmunds has over 50 years of experience in the automotive industry and we’ve put that expertise to good use in our True Market Value (TMV®) pricing system.

Our approach to valuing vehicles is simple: We analyze massive amounts of historical transaction data for both new and used cars, trucks, SUVs and vans. This data is then adjusted for things like current incentives, local market conditions (supply and demand), seasonality and more. The result is an accurate and up-to-date estimate of what you should pay or get for your specific car.

The NADA Approach

NADA Used Car Guide is one of a few nationally recognized providers of vehicle valuations. As an independent company, we have provided accurate used car, truck, SUV, and motorcycle valuations for over 45 years to car dealers, banks, insurance companies, and government agencies. We do not sell cars; we simply provide the data and analysis that idencies the vehicles worth in the marketplace.

How to Properly Value a Vehicle
The NADA approach is based on actual transactions — what people are willing to pay for a vehicle in today’s marketplace. We no longer need to rely on “book values” or opinions because actual selling prices provide an accurate reflection of value.

To arrive at our valuations, we begin withraw auction data — more than 1 million vehicle transactions each month. We then adjust this raw data based on 16 different criteria that affect value — including equipment, mileage, location and more — to produce accurate valuations for every make and model on the road today.

The Private Party Sale Approach

The best way to find your target vehicle is to look for recent private party sales of similar models in good condition. This will give you an idea of what the market is bearing for that particular car. You can find this information online through websites like Kelley Blue Book or NADA, or through personal connections.

Get the VIN (vehicle identification number) from the seller and run a history report to check for any accidents or major issues that could affect the value of the car. Once you have a good idea of what the car is worth, you can start negotiating with the seller.

The key here is to remain calm and collected throughout the process. Never show too much excitement for the vehicle, as this could result in the seller raising their asking price. It’s also important not to lowball the seller, as this could result in them becoming defensive and unwilling to negotiate. Instead, start at a fair price and be prepared to move up gradually from there.

Related: Trade-In Vehicle page, or page finance a private sale car.


In order to properly value a vehicle, you’ll want to consider a variety of factors such as the vehicle’s age, make, model, mileage, and overall condition. You can use online tools like Kelley Blue Book or Edmunds to get an estimate of a vehicle’s worth, or you can consult with a local dealer or automotive specialist. It’s also important to keep in mind that a vehicle’s value may change over time, so it’s important to stay up-to-date on market trends.