How to Calculate Resale Value

A major consideration in buying a car is its future resale value. Knowing how much you can reasonably get from a trade-in will influence what your options are. While many people know about Kelley Blue Book's estimated car values, fewer are aware of the Black Book value calculator. While both organizations claim to be the most accurate estimator of used and new car values, they actually have opposite approaches to the car sale process, both of which may be valuable when determining the valuation of your used car.

Used cars have certain criteria by which their value is determined. Some differences have more impact on the car's final price than others. An often-overlooked fact is that a car's value drops dramatically as soon as it leaves the sales lot. In fact, research from Carfax shows that a car's value drops by 10 percent within the first month of purchase and as much as 20 percent within the first year.

Furthermore, The Car Connection explains that while some factors depend on personal preferences and regional disparities (such as the color, supply and demand or economic outlook), other factors can be easily calculated based on the condition and features of the car. Specifically, the vehicle's physical condition, optional features and its mileage will all add or subtract value.

Different carmaker brands have different rates of depreciation, which the team at Bankrate defines as the difference between a vehicle's worth when purchased and sold. One useful tool to estimate your car's depreciation over time is CarEdge, which offers an online calculator on their website. This resale value calculator shows that, aside from the make, model and condition of your car, higher mileage is the largest factor that increases the depreciation rate. In contrast, additional features such as power windows, heated seats and backup cameras will increase your resale value.

Kelley Blue Book was founded in 1918; Fred Beans Dealership explains that it did not originally evaluate vehicle prices and focused instead on comparing and rating different cars. KBB later added prices, but these prices are evaluated based on a proprietary set of criteria known only to the KBB editor.

The Black Book vehicle guides are released by National Auto Research and are almost exclusively used by and distributed to dealers and financing sources, such as banks. Black Book visits 60 vehicle auctions across the United States each week and the compares prices it gathers there against dealership prices before applying adjustments for features and details like color or upholstery.

Although consumers don't have direct access to Black Book guides, sites such as Cars.com and NewCars.com use Black Book prices. Black Book prices are generally considered to be more accurate but also assume that the vehicle is in very good shape and are most often sold by a dealership.

If you've carefully maintained your vehicle inside and out, Black Book pricing may offer you a better price evaluation than Blue Book guides. For vehicles with a few dents or more miles, Kelley's Blue Book prices will serve as a more accurate reference. In all, while the Blue Book evaluates prices from a consumer's perspective, the Black Book considers the price from a dealer's perspective.

Being aware of both evaluations may give you a better idea of the range of prices you are realistically likely to get. There are many free online calculators available that will be able to provide you with estimates.