Value vs worth are often confusing to people since they seem similar. However, in the world of sales and resales, they mean very different things.
In this article, we highlight the difference between the value vs worth of your vehicles, and explain what they really mean in terms of their market price.
What Is the Value Of Your Vehicle?
Value is a very broad term used to describe both the monetary and emotional value placed on an object. The value of your vehicle depends heavily on its initial condition. Once you buy a car from a dealership, the value of the car changes the moment you drive it off the lot.
Several factors affect the value of that car, including: condition, mileage, location, color, and personalization. While most cars begin to depreciate in value immediately after purchase, some cars may hold, or even increase in value.
Condition And Mileage
Condition is one of the most subjective factors that can affect the value of a car. One person might describe a used yet reliable and accident-free car with a few paint scratches and rust spots as being in “average to good condition”, while another buyer might call its condition “excellent”.
Because the value of that car means different things to both customers, it can be hard to assess and pin a precise financial value to that car.
It’s common knowledge that the more mileage a vehicle has, the more wear and tear it has experienced. It makes sense that a car’s mileage will influence its value.
A potential buyer is usually less inclined to shell out big bucks to buy a car with over 100,000 miles on it compared to one with just 20,000 miles.
Unlike gauging value by condition, using mileage to evaluate a car is pretty much straightforward. However, you can’t prioritize one over the other.
For instance, a car with low mileage could also be in very rough condition, causing its value to depreciate.
Buyers may pass on low mileage cars that have faulty electronic equipment, torn seats, dents, and other faults in favor of higher mileage cars that have none of these issues.
The location of the seller could also influence the value of the car, depending on the type of car in question.
While some cars are more generic and can be used anywhere, specialized vehicles are valued higher in specific locations. For example, sports cars and convertibles are valued higher in warmer climates and around coastal cities, while mid-priced sedans and minivans are popular everywhere.
In the United States, SUVs and four-wheel-drive trucks are valued higher in the Midwest, Northeast, and other areas with snowy roads.
The extra features your car has can be a hit or miss when it comes to valuation. However, a few add-ons that improve the value of a car are: leather seats, diesel engines, panoramic moon roofs, a premium factory sound system, and all-wheel drive.
On the flip side, there are some features whose absence will cause the value of a car to depreciate. For example, the absence of door locks, air conditioning, or power windows could drop the value of your car.
When you buy a car, you ideally want it to reflect your personal style and for it to feel more like “you”. But what if the type of car that you consider stylish is someone else’s pet peeve? Going crazy with modifying and personalizing your car could hurt its value.
Most buyers tend to prefer neutral or common colors such as white, blue, black, silver, or gray, and offer better prices for cars in these colors. Odd colors like lemon green, purple, orange, or yellow often receive lower price bids and sell slower.
How Do You Value Your Car?
For validation purposes, websites such as NADA and Kelley Blue Book can help you determine the monetary value of your car. They work by filtering whatever information you enter through several databases in order to provide you with an accurate estimate of the value and worth of your car.
These websites follow the current market price of vehicles by monitoring wholesale auctions, consumer sales, as well as franchise and independent dealers.
The valuation site or guide runs a search based on the details you provide to give you a possible range of prices. This valuation is also dependent on the overall car condition, the buyer, and the seller.
Types Of Care Valuation
After inputting your vehicle details and information, a price is provided based on different factors.
The trade-in value is the lowest possible amount you will get offered for your car; it’s also known as the wholesale price. This valuation gives you an estimate of what a dealership will offer you should you decide to do a trade-in.
Private Party Resale Value
This valuation type gives you a price estimate that you can expect if you advertise and sell your car on your own without a dealer.
Certified Pre-Owned Value
There are some used cars that are sold with a bumper-to-bumper warranty after inspection. As indicated by some pricing guides, these certified pre-owned cars always get higher-priced offers.
Dealer Retail Value
This price goes way up. It’s higher than the price that a private party resale or trade-in would offer. This is usually the price a dealer would sell your car for.
What Is Your Car Worth?
A car's worth, simply put, is your asking price. After getting an accurate and estimated value for your car, the amount you offer a buyer or the amount the buyer offers to pay for the car is the car's worth.
Value Vs Worth
The value of your car determines how much it is worth. The higher the value of your car, the more it’s worth on the market.
Before you sell your used car, it’s better to research and understand its value in order to have an accurate idea of how much it’s worth in the market. This knowledge will give you confidence during negotiations.
It’ll also help you choose a fair selling price for your vehicle for what it’s truly worth. Accurately priced cars commonly sell faster too.
When looking to sell a used car, value vs worth plays a very key role. There are several factors that could affect the value of your car, and in turn, its worth. It pays to have up-to-date information such as your vehicle maintenance list and vehicle history checks, as this makes the process of selling used vehicles easier and faster.