When looking at the value of your car, its worth will depend on who is asking. If your car insurance in Salt Lake City is determining value, it will be different than if you’re trading it in. If you sell it to a private party, it may have another dollar value. It’s helpful to know the different markers of value when deciding what your car is worth.
The Blue Book
You’ve undoubtedly heard of Kelley’s Blue Book which is popular with many vehicle owners and buyers. It uses specific data to set the value of vehicles for resale. It’s mainly used for retail resale or private sales. For instance, you would look up your vehicle with the Blue Book if you were listing it in the newspaper or on Craigslist for sale.
Another reason people turn to the Blue Book is to find out the value of vehicles when going to buy a used model from a dealership. They will look up the vehicle they own for the trade-in value and for the model they want to buy.
The Black Book
The Black Book gets it’s pricing from what vehicles are selling for at auctions. It will provide information to help the dealer determine the right price for the vehicles they are putting on the lot.
Dealers choose this book because it will tell the wholesale value of the vehicle. They can then determine how much profit they want to get back and mark up the price accordingly.
How Insurance Companies Value Your Car
Insurance providers will use a variety of methods to determine the value of your vehicle. Generally, they only pay out a percentage of the value if your vehicle is in an accident. Anything over that amount means it will be totaled.
Say for instance, you have a car valued at $10,000 and the insurance company will pay out up to 80 percent of the value. If your repairs come to $8500, they till total the vehicle even if it’s fixable.
Insurance companies offer cash value and replacement value policies to their customers. Cash value is what the vehicle is worth now, and it may be determined used the Blue Book along with other data the insurer compiles.
Replacement value is the cost to purchase another vehicle similar to the one you own if it would be beyond repairing or not worth the costs. Some people aren’t even aware of replacement coverage because it’s more expensive.
When looking at your vehicle and trying to decide the value, you need to know why you want to know, who you’re dealing with and where they are looking at value. When you can figure the value, you have more room to negotiate. It also helps you know what to expect if your vehicle is in an accident or you want to trade it in. Just make sure you get the value from it that you feel you should have, which may not be measured from any book.