By John EganWhat Is the Book Value of a Car?
By John Egan
Quick Answer
The book value of a used car is its current value based on factors such as its year, make and model, condition and mileage. Online tools from companies such as Edmunds, J.D. Power and Kelley Blue Book provide book values for consumers.
When you're preparing to sell your car, it's important to know what it's worth. A vehicle's book value tells you what it may fetch on the market based on various factors, including its year, make and model, condition and mileage.
What Is Book Value?
Book value indicates what a vehicle would be worth if you sold your car now. Book values usually apply only to used cars. Factors that go into calculating book value include:
- Make and model
- Year
- Vehicle trim
- Optional equipment
- Condition
- Mileage
- Economic conditions
- Local market conditions
The book value also depends on a vehicle's buyer. For instance, you normally can fetch a higher price if you sell your car to a person rather than to a dealership through a trade-in.
Book value typically covers a dollar range, which can help you set your list price before you sell it. As a car buyer, this range might help you negotiate a lower price.
Market Value vs. Book Value of a Car
The book value and market value of a car are often the same. However, market value applies to new and used cars sold by both dealerships and individuals.
For example, when you review your car's book value, you'll notice a retail value. This is the price that you'd likely pay if you bought a car from a dealership, and it's usually above the private-party and trade-in book value.
Dealerships usually assign higher market values to a car because they normally can assure a buyer it's in good condition. Some dealerships might even recondition or refurbish a car before putting it up for sale.
Be aware: The book value and market value of a vehicle differ from the actual cash value, which is what car insurance companies use to figure out a car's value in the event of an accident claim. The actual cash value might not be the same as the book value.
How to Calculate Book Value
Fortunately, you don't need to use your own calculator to determine the book value of your car. You can find a car's book value using several online resources, such as:
Generally, you must supply information about your vehicle, such as its year, make, model, trim, mileage, condition and optional equipment. To get the most precise book value, provide accurate information along with the vehicle identification number (VIN).
Frequently Asked Questions
The Bottom Line
Book value represents the estimated price a used car might sell for today, based on factors such as year, make, model, condition, mileage and local market conditions. Knowing this value can help a seller come up with a realistic list price and give a buyer an edge in price negotiations.
Online tools from sources like Edmunds, J.D. Power and Kelley Blue Book enable someone to look up a vehicle's book value by supplying details such as a car's condition, mileage and VIN. If you're in the market for a car loan or lease, another number to keep in mind is your credit score. You can obtain your FICO® ScoreΘ for free from Experian.
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About the author
John Egan
John Egan is a freelance writer, editor and content marketing strategist in Austin, Texas. His work has been published by outlets such as CreditCards.com, Bankrate, Credit Karma, LendingTree, PolicyGenius, HuffPost, National Real Estate Investor and Urban Land.
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