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What Is A Car Appraisal?

Hanna Kielar4-Minute Read
March 10, 2022


Whether you are buying or selling a car, an auto appraisal is crucial in determining how much the vehicle is worth. You may already be familiar with the appraisal process if you’ve ever been in an accident and filed an insurance claim. The insurance company sends a professional appraiser to assess the actual cash value of your vehicle in order to determine if it’s worth repairing.

There are different types of appraisals for buyers and sellers. We’ll walk you through your professional and DIY options for appraising your car.

What Is A Car Appraisal?

All new cars come with the MSRP, manufacturer’s suggested retail price, but used car pricing requires a car appraisal. The automotive industry has fine-tuned the appraisal process to consider a range of factors, including the car’s model year, trim level, mileage, condition and local market supply and demand.

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Ways To Get A Vehicle Appraisal

There are a few different ways to estimate resale value, varying in cost, purpose and, most importantly, credibility. The method you choose to appraise your car will depend on who's buying.

For example, a private party buyer will likely be relying on the same online resources as you to negotiate a deal. That said, if you’re shopping for a used vehicle and want to finance it, a lender will likely require a more accurate, professional appraisal before approving the loan.

We’ll walk you through how to get your car appraised in a few different ways.

Appraise It Yourself

Best For Negotiating

The internet is your starting point, and it’s free. You can use credible online sources like Kelley Blue Book (KBB) to estimate a range in your vehicle’s value. Simply input your ZIP code and VIN, make and model, or license plate number, and KBB will pull your vehicle history report and local market data to deliver a range of your vehicle’s resale value.

For example, a minor car accident could reduce your car’s value by $500, while major damage could decrease value by thousands of dollars. Base model trims tend to become outdated quickly as more and more technology becomes essential. When you buy a car from someone who is the sole owner, they can answer any questions you have about the life of the vehicle. The more owners a car has, the more cloudy its vehicle history becomes.

It’s also worth researching the current market for yourself by browsing aggregate car sales inventories, like Rocket AutoSM, for your car’s make and model, mileage and model year. These sites are often more attuned to market trends than other databases. Be sure to filter for other value factors comparable to your vehicle’s number of owners, accident history and trim levels.

Car Dealership Appraisal

Best To Compare Trade-In Offers

When you bring your car into a dealership for an appraisal, what you’re really getting is a money offer for your car. Car dealers will do the same research that you have done, but they’ll also physically assess the exterior, interior, mechanics and overall condition of your vehicle. They may also conduct a test drive before offering a final value. This can be a very efficient process – car dealers assess hundreds of vehicles a week and they know the market extremely well. You’ll typically have an appraisal within a half hour.

A dealership appraisal is often lower than a private party sale because the dealer has to pay to hold the inventory and make a profit on the eventual sale of the vehicle. The convenience of selling to a dealer and leaving with cash in hand and minimal paperwork comes at cost. If a dealer’s appraisal seems too low, you can always try to negotiate. You can use your research as a tool to increase the trade-in value of your vehicle. We recommend comparing appraisal offers with several different dealerships if you’re considering trading in your car.

Lender Appraisal

Best For Car Buyers To Assess A Deal

Car financing companies are in the business of assessing the risk of lending. Auto loans are typically “secured loans,” meaning they use the financed vehicle as collateral to sell if you default on the loan. Lenders won’t approve a loan amount that is higher than the actual cash value of the vehicle. If the lender considers it a poor investment, you should too.

Lenders will often send a professional appraiser to assess the car for free. If you’re financing a car, a lender appraisal is a very credible negotiating tool to help you get a better deal.

Professional Car Appraisal

Best For Collectible Cars, Second Opinions, Or Estate Matters

While all the above methods should come at no cost to you, hiring a professional car appraiser will cost you at least $100. That said, getting an accurate estimate from an independent appraiser can be worth it if you:

  • Disagree with an insurance appraisal that claims your car is totaled.
  • Are buying or selling a collectible car.
  • Need an accurate estimate of your assets for estate planning, divorce or bankruptcy.

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The Bottom Line: Car Appraisals Are Crucial Negotiating Tools

If you’re planning to buy or sell a car through a private party or at a dealership, you can expect to negotiate. Car appraisals provide valuable, accurate information about your vehicle’s worth that can both illuminate a bad deal and leverage a better financial decision.

Begin your own research by using our how much is my car worth tool to get an instant cash offer within minutes. No negotiations. No hassle.

What's your car worth?

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Hanna Kielar

Hanna Kielar is a Section Editor for Rocket Auto℠, RocketHQ℠, and Rocket Loans® with a focus on personal finance, automotive, and personal loans. She has a B.A. in Professional Writing from Michigan State University.