How cash for cars companies determine vehicle value?


You’ve reached the point where you’re ready to sell your old car. It could be because you’ve decided to upgrade your vehicle, trade your small vehicle to get a family car or purchase the car of your dreams. Regardless of reason, anyone selling a used vehicle has one thing in common: You want to get as much as possible for your vehicle.

The amount of cash you get for your vehicle strongly depends on its valuation. Furthermore, the merchant you sell to will always try to buy it for as little as possible to increase profit.

If you’re selling your car, you should understand how the value of a vehicle is determined.

Why learn how vehicle value is determined?

The used car market was valued at USD$1.57 trillion in 2021. This number is only expected to rise. Furthermore, it’s well-known that most car buyers are likely or willing to purchase a used car instead of a new car. With these facts in mind, as a driver, you’ll almost certainly reach a point where you’re ready to sell your old vehicle.

Vehicle buyers, like Cash For Cars, offer you the opportunity to sell your vehicle relatively quickly and easily. The benefit of this arrangement is that the wait between the decision to sell and the actual transaction can be shorter and more convenient than attempting to sell your car through other streams. These deals can be great if you’re in immediate need of cash, but you can’t expect to receive retail value in exchange for your vehicle.

Remember that dealerships and merchants will buy your used vehicle with the intention of earning from it. This means that they’ll buy it from you at a price wherein they’re able to resell it for profit.

Still, several factors determine the valuation of a vehicle. When selling, you want to ensure you get a fair deal from which both parties can benefit. Understanding how a vehicle is valued can help you secure such a deal and avoid receiving less than your vehicle’s worth.

How age affects value

From the moment a brand-new vehicle is driven off the lot, its value starts depreciating. Exceptions to this would include rare, vintage, and otherwise sought-after vehicles that are considered collector items. Every used vehicle has a value estimation dependent on make, model, and the year it was produced.

The first thing a merchant will do when evaluating your car is check a trusted automotive pricing guide, like the Kelley Blue Book, to get a valuation of what the vehicle would be worth. This sort of valuation can be thought of as an “upper limit.” It’s a rough estimation of what a used vehicle in excellent condition can be sold for at retail value – what the buyer can resell it for, at best.

The condition

The value of any used item will vary depending on its condition, including automotive vehicles. Here, a company would consider factors like mileage and general wear.

  • As you probably know, mileage refers to the total distance a vehicle has driven. Investopedia explains that the higher a car’s mileage, the lower its value. It makes sense when you consider that more mileage means more usage, which means there’s been more opportunity for wear to accumulate.
  • General condition. This factor is somewhat subjective and will vary between vehicles, buyers and sellers. The condition of a vehicle isn’t directly proportional to mileage. Furthermore, what one person considers slight wear, another may consider a deal-breaker. When you’re selling to merchants like Cash For Cars, they’ll look at condition with respect to how it might be received by the next owner.
  • Accident history. It can depreciate the value of a vehicle; however, this isn’t always the case. How accident history influences your vehicle trade value typically depends on location, the car, who’s buying it, and who it may be sold to. Perhaps the biggest disadvantage is that some buyers are less inclined to purchase vehicles that have been in accidents. Remember, this may be brought up during price negotiation and may slightly devalue your used vehicle.

Aftermarket parts and personalised vehicles

Don’t be surprised if you’re offered less for a vehicle that’s running with aftermarket parts and personal touches. This can be a special case when it comes to the collector-type vehicles mentioned before. But official stock parts typically give you an advantage when selling your vehicle for cash.

Aftermarket parts and personalisation aren’t necessarily bad, but there’s an understandable caution involved concerning their reliability. These also indicate that work was done on the vehicle. Some buyers might be concerned with the quality of the work done. As a general rule, you can expect any aftermarket work to lower the value of your car.


Unless the vehicle you’re selling is exceptionally rare and sought after, like a limited edition luxury vehicle, you can expect to resell it for less than what you paid for it. Everything from the vehicle’s condition, mileage, service history, age and any work done on it can and will be considered when determining its value. Educating yourself on how vehicle valuation works will help you grasp the realistic value of your vehicle and negotiate a fair price that leaves you satisfied.

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