by Andrew Rohrlich
So you've driven your vehicle for several years, and now you're ready to sell it privately. Selling a vehicle to a private party can be a frustrating process. And you may find that potential buyers keep offering less than you feel your vehicle is worth. You may be wondering how to increase the value of your car.
Many factors determine the value of your car. Understanding these factors helps you know how to add upgrades that add value to your car. Thankfully, you can increase the value of your car with just a little time, effort, and money.
Primary Factors That Determine the Value of a Used Car
Various factors determine your resale car value, but several primary factors hold more weight than others.
Mileage
Mileage is one of the most important factors that determine the value of a used car. It indicates how much wear and tear a car has taken over time, and how much use you can get out of it. So even if two cars are identical, the car with higher mileage will have a lower selling price or trade-in price.
According to 2022 data from the U.S. Department of Transportation Federal Highway Administration, the average driver drives around 13,500 miles a year. So, most drivers can get several years of use out of their car before its value lowers.
Cars can lose over 20% to 30% of their value in their first year of driving, which can amount to thousands of dollars. So it's best to drive your car to at least 30,000 miles to get some use out of it before selling it.
You get the best value out of selling your vehicle anywhere from 60,000 to 100,000 miles. Anything over 100,000 miles is considered high mileage, which will greatly lower buyers' perception of your car's value.
Age and Vehicle History
All cars are affected by depreciation — the rate at which a car loses its value over time because of mileage and age. A new car loses about 20% of its value in the first year, then 15% of its value each of the following years. But just because a car is older doesn't necessarily mean that it's automatically less valuable.
Luxury vehicles may depreciate faster than non-luxury models since their target buyers are willing to pay more to get the latest and greatest. However, there are some cars that appreciate in value the older they get due to their rarity and collectibility, such as vintage and specialty cars.
Vehicle history is also another important factor that determines a vehicle's value. A car accident signals that a vehicle needs repairs, which can scare off buyers. Buyers may still be apprehensive about purchasing even if the car already has been repaired, which lowers the value of your car.
Make and Model
A car's make and model greatly affect its value. Vehicle make and model distinguish different characteristics of a car, and some cars hold their value better than others.
For example, Japanese cars like Toyota and Honda have a higher resale value because of their known reliability and longevity. However, some more luxurious brands like Audi and BMW might have lower resale value due to their expensive maintenance and repair costs.
The model can also affect the sale price. Most car models have multiple trims, starting from a base trim up to a premium trim. The higher the trim, the more luxurious features become — and the more value the car holds.
Vehicle Condition
Vehicle condition is another of the most important factors that determine your car's value. Vehicle condition includes a car's interior, exterior, and mechanical condition.
Buyers consider the overall appearance of a car when determining its value. A car with a clean interior and exterior and minimal to no damages will appear more favorable than one with substantial body, paint, or interior damage.
They'll also consider whether the car needs any major repairs or reconditioning to run smoothly and safely. A car that needs little to no repair and is ready to drive will have much more value than a car with mechanical damage.
Market Conditions
The final determination of car value is its residual value. Residual value has a twofold definition:
- Your car's value at the end of your loan term.
- The amount you can buy the car for at the end of the loan term.
Your lender sets the residual value at the beginning of the lease to determine your monthly payments. Residual value is determined by multiple factors, including:
- Vehicle brand image
- Reliability ranking
- Vehicle popularity
- Resale value
- Safety
- Economic conditions, such as gas prices, unemployment rates, and more
Market conditions are an especially important factor to determine the residual value and include:
- Vehicle inventory
- Incentives
- APR
- New vehicle sales
Market conditions determine how much demand there is for your vehicle at a given time, which can increase or decrease the value of your vehicle accordingly.
7 Simple and Affordable Ways to Increase Your Car’s Value
As you can see, various factors determine your current vehicle's value. Many platforms such as Kelley Blue Book can provide a selling car estimate based on those factors. But car values aren't set in stone.
You may be able to increase your car's value by making simple changes.
1. Get New Tires
Never underestimate the power new tires hold. Tires indicate how much wear and tear your vehicle has taken and how well you take care of your car.
You should replace your tires before you sell if they:
- Have cracks between the grooves
- Show signs of uneven wear
- Have damages like punctures
- Are near the minimum legal tire tread depths
Your new tires don't have to be expensive. You may be able to find cheap, good-quality used tires depending on the make and model. However, it may be best to get more expensive tires if you're selling a more luxurious or newer car.
If your tires are already in good condition and have a good amount of tread on them, you may not have to replace them at all.
2. Perform Cosmetic Repairs
Your vehicle's appearance greatly affects your car's perceived value, so performing cosmetic repairs can increase your car's value.
Cosmetic repairs can be as simple as buffing out minor scratches from your paint with a polisher. Anything that restores your car's appearance to its original condition will only increase its perceived value.
3. Replace Your Headlights, Tail Lights, Brake Lights, and Signals
If your headlights, tail lights, brake lights, or signals are damaged, dim, or not working, you may consider replacing them to increase your car's value. However, if they're in good condition, you don't have to worry about it.
4. View Check Engine Lights
Check engine lights, also known as warning lights or idiot lights, indicate that something is wrong with your car mechanically. Mechanical issues can drastically reduce your car's value, especially if you're not sure of the root cause.
So, view your check engine lights to make sure they aren't on. If they are, you can take them to a car store or your maintenance guy to run diagnostics. It's best to identify and fix the root cause before selling to get the best price for your car.
5. Wash and Detail Your Car
Appearances are everything in private party sales, so make sure your car is clean inside and out. You can take your car through an automatic car wash or wash it yourself to make the exterior gleam.
You'll also want to remove all junk and debris from the interior and clean every area thoroughly, including the floor mats and seat crevices. Consider taking your car to a professional detailing service to have it cleaned so it looks and smells its best.
6. Complete All Essential Maintenance
The less your buyer has to worry about after purchasing, the more valuable your car will be. So it's best to complete all essential maintenance before you try to sell your car by changing engine fluids such as:
- Oil
- Brake fluid
- Power steering fluid
- Antifreeze
It's also best if you have a record of all your previous maintenance to prove that the vehicle has been well taken care of.
7. Organize Your Vehicle Paperwork and Provide the Right Documentation
Proper documentation is important to prove that your car has a clear title, is well-maintained, and is safe to drive. Documentation can include:
- Initial purchase paperwork
- Vehicle history report
- Maintenance records
- Receipts for maintenance, repairs, and upgrades
- Insurance company documents, including claim paperwork
This article was written by Andrew Rohrlich. As a brand and product marketing expert, Andrew Rohrlich has crafted products, experiences and communications for household names like Gap and for multiple automotive technology businesses. For nearly a decade Andrew has studied automotive retail in depth from a customer point of view and aggregated the industry’s best research, thought leadership and know how to provide credible and important information to auto shoppers and sellers.
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