You Never Know What Something Is Worth Until You Sell It

photo 2-2One of the fundamental principles of investing is that all the numbers we use to track our investments from day to day are estimates. In reality, we never know what a non-cash asset is truly worth until the moment we exchange it for cash. Or, in a slightly more folk-lyrical way, “You don’t know what you’ve got til it’s gone.” (Are you now humming, “They paved paradise, and put up a parking lot”? If so, mission accomplished.)

Our recent adventure in selling the Jeep reinforced that message quite a bit.

What Did We Think The Jeep Was Worth?

Well, around when we were debating whether or not to keep the Jeep listed as an asset on our balance sheet, we had it booked on the Kelly Blue Book assessment of the Jeep’s worth – $7,400. In truth, we both knew that the Jeep had some issues. Any new owner would likely want a new top since the current soft top was starting to leak. They would probably also want a new cd player since the cd player in this Jeep hadn’t worked in at least 5 years. The paint was very chipped from years of highway driving, and there were scratches on the doors from where Mr PoP had taken them on and off over the years to drive around doorless.

Not to mention the darned thing was filthy – inside and out. Mr PoP took pride in the fact that the Jeep was “au-naturale” and that its only wash during the 7 years he owned it was a rinse-off to get all the salt off after he drove it up north during the winter. The layers of grime inside and out were thick enough that I wasn’t sure how well it would clean up after all this time.

Mentally, I had accounted for the fact that I wouldn’t be surprised if we had another $1,000 – $1,500 in write downs when we actually sold the vehicle. And Mr PoP had done the same. In fact, in our He Said/She Said on taking the Jeep off the balance sheet, Mr PoP said,

“I have serious doubts that the Jeep will fetch anywhere near its KBB value on the market, and don’t want to be caught short when the time comes to get rid of it.”

Going into this, it’s safe to say we both were going to be pretty happy to get $6,500+, but not insanely surprised if the final sale price started with a “5”, either.

Expectations Low, But We Had To Try

But we still wanted to get as much as we could out of it, so we spent some money and some time, and got the Jeep in as good of a condition as we could.  About $200 covered cleaning supplies, stuff to make the paint as nice as possible, a cheap-o buffer tool, a couple of light bulbs to replace ones that had burned out, a steering wheel cover, and some microfiber cloths.

There was also a LOT of elbow grease that went in. I attacked the interior – carpets, upholstery, and plastic fixtures. The color of the dirty water and cloths that were coming off of this cleaning job was just disgusting. There were years of dirt inside. (At one point Mr PoP tried to claim the dirt was a protective coating against sun damage, but I wasn’t buying it.)  Mr PoP attacked the exterior – cleaning, then removing the oxidation of the paint, waxing it, getting the fenders and bumpers as black as possible, and making the wheels and tires shine too.

photo 3-2

Then, we took it to the beach and took some pictures to show it in the best light possible. We posted it on Craigslist for $6,500 and went to bed.

What The Heck?

In the morning, we discovered Mr PoP’s phone had been blowing up all night. Dealers calling and texting from hours away offering cash for a quick purchase. Clearly we had undervalued the Jeep by asking for that price, as sight unseen offers were higher than asking. Mr PoP texted most of them back saying he needed to re-evaluate what it was worth and would re-list it that evening.

He hemmed and hawed over the Jeep pricing for the better part of that day, and finally convinced himself that it was in “Good” condition on KBB (I had been using “Fair” due to all the little issues that annoyed me about the Jeep), which brought the KBB up over $8K. Then, pretty confident that we had found the floor for the Jeep’s price, wanted to see if there was a ceiling. He listed it for $9K that night, and again, we went to bed.

The inquiries were a little slower to come in, but after a day or two Mr PoP had several interested people who wanted to come see the Jeep. He was picky, though.

The Actual Sale

The first person he chose to have see the Jeep was someone who seemed like an ideal buyer – serious buyer, all cash, and had been looking for a Jeep like this for several months. The buyer arrived on time to the appointment Mr PoP scheduled, took it for a quick test drive, and within an hour we were filling out the title and bill of sale paperwork and I was counting out 90 $100 bills on the hood of the car.

It was, perhaps, the easiest car sale we’ve ever had, even though we’re half sure we might have left a *little* bit of money on the table selling it to the first buyer. (Optimal stopping is something the famous secretary problem gets into. For the nerds out there, the idea behind the secretary problem is that to find the optimal stopping point in a search for your best choice, you’re best off to look at, but discard the offers of the first 37% (1/e) of interested buyers, and then take the next offer that is higher than any of those offers. Mr PoP did some sorting with the applicants – choosing to see the buyers he thought were most serious first, so the condition that the order be random wasn’t met for us and this would have changed the results. So sadly, I was denied the opportunity to test the secretary problem results in real life.)

But in the end, we were thrilled to have $9K in our hands, and the buyer was thrilled to have the Jeep. The only person not thrilled was one dealer that lost out on buying it the first go-around and retaliated by telling Mr PoP, “Well… you’re dumb.” Indeed. If “dumb” is ending up with an extra $2.5K in our pockets, I’ll take my dumb husband any day of the week.

Take Home

As much as we estimated the value of the Jeep using KBB, and then mentally discounted it for all the flaws we saw in it, we truly had no idea what this asset was worth until it was gone*. But the best we can do is continue to make these estimates and keep on going.


What are the assets that you have that you’re the least sure of their value? Do you have any methods that help you balance a conservative estimate with a “fair” value?


* Just in case you think we undervalue all of our cars, trust me that this was definitely not the case with the last car we sold before this one where I thought we would get $7K and we ended up with $5.5K.

48 comments to You Never Know What Something Is Worth Until You Sell It

  • I bought my used VW Rabbit for way undervalue for what it was worth. Score for me! Congrats on getting a higher price!
    Tonya@Budget and the Beach recently posted..Addicted to Busy?My Profile

  • Just the other day, hubs and I were talking about a house that we looked at when we were house-shopping. He told me that it sold for $275,000. I snorted and said, “That house was NOT worth $275,000.” Then I thought for a second and said, “Well, I guess that if someone bought it for that, then it was worth $275,000.” A house is worth what someone is willing to pay for it, right? (However, I am of the opinion that this particular buyer could have found a better house for that price…) Oh well, now that I’m a home-owner in the area, people paying more for houses in my neighborhood brings up the value of my house as well!
    Becky @ RunFunDone recently posted..HalloMy Profile

    • Haha, I do the same thing all the time, especially rentals. I look at what people pay for them and know the DCF on the payout is not anywhere near what I would want to get for that kind of money and say “not worth it!” But it was to the person who parted with their money…

  • I’m glad you sold your jeep so easily. I guess you never know who might be looking for exactly what you’re selling. I sold an old Toyota on craigslist once and it was far easier than I had ever imagined.
    Holly@ClubThrifty recently posted..Obsessed: 4 Reasons I Love Credit Card RewardsMy Profile

  • Wow! Congrats! If only everything was that easy.
    nicoleandmaggie recently posted..My big summer plan for DC1My Profile

  • I generally look on craigslist/eBay for similar items to what I’m trying to unload and then set a price just lower than some of them, or just higher, depending on how quickly I want to move the item and the relative conditions. eBay is easier because you can look up successful sale prices rather than just what folks are looking to get for their items. I’m horrible at both undervaluing and overvaluing things we own. I’ve resigned myself to get what I can for things and not worry about what I *thought* the value was. Sometimes I’m lucky, sometimes I’m not!
    Mom @ Three is Plenty recently posted..Reasons we have a large-ish emergency fundMy Profile

  • Congrats! That is awesome! Must have been nice to sell it for more than you originally thought it was worth.
    Michelle recently posted..How To Gain Experience When You Have NoneMy Profile

  • Christie

    I think the great photo on the beach helped too. It’s the beginning of summer too. Jeeps look Fun! …. I had no idea that you could get oxidization off a car.

    • A friend of ours is selling a much more expensive car now too, and one of the things that he kept talking about was that the pictures need to help sell it. Having the Jeep out on the sand really gives an idea of where it can take you. =)

      The oxidation on the Jeep wasn’t too bad, but I’ll have to get the product name from Mr PoP for you. Basically it lifted a light fog off the color from the entire exterior and the red paint was much brighter after using it.

  • Debbie M

    Ugh, I do not like estimating resale values on my property. I just use kbb for the car and the average of zillow’s and my county’s estimates on my house. I estimate that everything else is worth zero. (A bunch of it really is worth $0 in resale due to being worn out and/or out of style even though it’s worth much more than that to me.)

    Before bringing books (which are not worth $0) to Half Price (which pays and amount that rounds down to $0), I will look them up online. I don’t really sell anything else. Oh, I will also bring things to Good Will and use low-ball estimates for taxes purposes–I don’t even bother checking consignment shops first.

    • “I estimate that everything else is worth zero. (A bunch of it really is worth $0 in resale due to being worn out and/or out of style even though it’s worth much more than that to me.)”

      Totally agree. We have a lot of random things that someone might say, “Oh this is worth $X”, but eh? It’s not really worth it to us to really think about and sell a lot of that stuff. If we really want to be rid of something we often list it for cheap on Craigslist and if it doesn’t get a buyer in about a week, we move the listing to Freecycle. If no pick up in another week, goodwill. I like Freecycle over goodwill since I’ve heard Goodwill actually throws out a lot of the donated merchaindise if they don’t think it’s sellable. I’d rather see it go to someone I know will keep it out of a landfill for a while, which is why I like Freecycle.

  • Congratulations on selling the jeep! I’ve never tried selling cars before so I can’t say what works best. I have sold various smaller items online and what I do is that, I just check other people’s prices. Of course, I take into account the amount I originally paid for the item. Then I check around sites to see if other people are selling the same item and how much they’re pricing it.
    Alexis S. recently posted..8 Advantages of Online BankingMy Profile

  • Congrat on your $2.5k bonus! Really interesting article to me – I’ve actually been working as a ‘valuations specialist’ for the past 10 years, mostly valuing businesses. And ‘fair value’ really does come down to what two parties are prepared to exchange something for, like Becky’s example above.

    We see this often with businesses who say ‘my business is worth at least X’, but if no one will buy it for that price, it’s not really a ‘fair’ value. Things can definitely be worth more to you than anyone else though, which is different to ‘fair value’ – that just means you’re better off keeping it! The ‘endowment’ effect plays an interesting role in this too….
    Jason @ Islands of Investing recently posted..You’re Awesome! (inaugural edition – May 2014)My Profile

    • Mama PoP

      Thanks so much for the link. It is a really interesting article and a great website that I added to my RSS…

    • Yes, the endowment effect is definitely interesting and Dan Ariely has done some interesting experiments on it as well. On a much smaller scale, they asked people to make oragami cranes and judge what their crane was worth and what other oragami cranes that they did not make were worth. The difference is astounding.

  • Wow, nice get! It’s kind of amazing how much the internet helps with something like this. Within the span of two days you could list the car, get feedback, and re-list at a better value, all with just a few clicks. This uncertainty though is one of the reasons I hate listing our cars on our balance sheet. I don’t really think it makes sense to leave them off, but I also don’t really have a good sense of what they would sell for. Hopefully we’d have an experience like yours.
    Matt Becker recently posted..Save on Childcare with the Child and Dependent Care CreditMy Profile

    • Craigslist is definitely pretty awesome at facilitating these kinds of transactions so much quicker than newspaper classifieds did before.

      There’s an inherent uncertainty with pretty much any non-cash asset on the balance sheet, since you’re unsure what kind of friction you’ll encounter exchanging it to cash… Stocks are the same way… until you sell it, you don’t know the exact price you’ll get and you just hope you’ve ballparked it reasonably. =/

  • Ivy

    We always sell through Craigslist for the Blue book price and always sell quickly – we’d rather have no hassle instead a slight premium. The last car we listed sold the same afternoon – that felt really weird but also really nice to get it out so quickly, dents and everything, we hadn’t even buffed it up

    • Nice job getting rid of it the same afternoon, especially without cleaning it up much. The jeep was bad enough that I would have felt embarrassed trying to sell it to someone without cleaning it really thoroughly.

  • I think putting the extra clean up and work into the jeep really made the difference. I feel the same with houses, I see a zillow value and start thinking that our house would sell for 40k or 50K more and zillow is just off.
    Even Steven recently posted..Are Your Parents Rich-Small Town LifeMy Profile

  • Congrats on getting it sold so well! Maybe it’s because it was the nasty part of winter, but we just got almost no nibbles at all when we were selling a 2007 CR-V, even though it was priced to sell. (We eventually sold it to–we probably could have gotten a few hundred more if we had held out for a private buyer, but the clock was ticking.)

    Now we’ve been selling off some smaller items–an old bookcase, an antique blanket trunk, American Girl doll, crib, etc. There, I usually use the half-what-it-cost-new rule of thumb. I sold the doll for less than it was worth ($50–good-condition Samantha with two dresses) because I would rather sell to a friend for a price that seems reasonable to ME than gouge some sap on eBay (where naked dolls appear to be going for $80).

    But I had no idea what to charge for the blanket trunk-it was a present–but we got so many responses at $10 (condition was not that great) that my husband thinks we must have under-priced it. Oh, well! Next time I sell something like that, I’ll make sure to poke around some junk/antique shops first.
    Frugal Paragon recently posted..An Even Lower-Key Toddler BirthdayMy Profile

    • Thanks, FP. Around here sales really slow down for certain things (RE, sometimes used cars) in the heat of the summer, as seasonal residents are gone and many people in the service industry aren’t feeling as flush as when the cash is rolling in. Maybe it’s a similar effect for a really bad winter up north? Only compounded by the fact that no one wants to test drive a car when there’s ice on the roads.

  • You know, it’s almost embarrassing saying this, but I only track my cash and investment assets. I’ve got no idea what my car is worth. I do know that I’ve been offered more for my TV than I paid for it brand new! That’s pretty neat. Glad to hear you got so much out of the jeep. Making an extra 2500 is an awesome thing!
    Joshua L Rodriguez recently posted..Why Most Bloggers Fail…And Why You Wont!My Profile

    • I don’t think it’s anything to be embarrassed about. If you don’t have an interest in selling them, then what’s the point in keeping track of their value?

  • There is no vehicle like a Jeep and it will always be on of my favorites. I really like the model you had. A Jeep will hold its value longer than most vehicles. Craigslist is your friend when it comes to these transactions but be sure to get your vehicles inspected before purchasing on Craigslist.
    Vinu Nair recently posted..No Fault Accident Who PaysMy Profile

    • I was surprised the buyer didn’t bring a mechanic or have it inspected – we would have been happy to have let her, but she just bought it on the spot!

  • For whatever reason Jeeps hold their value and Jeep buyers are a very “forgiving lot”. Scratches and dents that would hurt value on other cars seem to have little or no impact on Jeeps. In another life DW and I bought a Jeep CJ7 with fiberglass top and Levi seats new from the dealer for $8K on the street. We drove it for over 4 years and did oil changes….that was it ….never even put tires or even brakes on it. Put it in the local paper for $6800…First caller…was there in an hour…handed me $500 to “hold it” and returned in an hour with a trailer AND 63 …$100 bills. I have never lost so little money on a new car. We drove that Jeep for over 4 years at an opportunity cost of $1200…

  • “For whatever reason Jeeps hold their value and Jeep buyers are a very “forgiving lot””

    After this experience, I couldn’t agree more.

  • […] Planting Our Pennies a “Well… you’re dumb” story about selling a car for more than its book value.  Nice Craigslisting, […]

  • Great job with the sale – $9k is really awesome and it sounds like a win-win situation!
    anna recently posted..Brief UpdateMy Profile

  • You guys were so lucky to find that buyer! I was sure the story was going to include a lot of people who were “just looking” or who tried to nit-pick a thousand dollars or so off the price. Glad it all worked out and that the elbow grease paid off!
    Debt and the Girl recently posted..Happy Memorial Day!My Profile

  • This is great, I always use Kelly’s Blue Book to find out the value of my car – for my net worth calculations – but I figure I should subtract $1,000-$1,500 because maybe my car is not in as good condition as I think.

    I’m still going to “low-ball” my car’s value for my own calculations but when it’s time to sell it I’m going to follow your steps and clean the heck out it and listed on the high end – maybe somebody bites.
    Aldo R @ MDN recently posted..Introducing “The Friday Five”My Profile

  • […] Planting Our Pennies, the POPs have an amazing story about selling a jeep and getting more than they expected. LOTS more. Goes to the old adage that a product or service is […]

  • Wow what a great experience and you made out with some extra dollars. I don’t know if I missed something, but why did you sell the car? Do you have an fund in mind to invest the dollars?
    EL @ Moneywatch101 recently posted..Pension Concerns are AlarmingMy Profile

  • I think this concept not only applies to things but to work as well. People undervalue themselves and their services. Sometimes all you have to do is set your price higher, but how do you know when that will pay off and how will you know when that will lose you the opportunity altogether.
    Stefanie @ thebrokeandbeautifullife recently posted..I’m a Car Virgin: What To Know When Buying Your First CarMy Profile

  • […]  Mrs. PoP at Planting Our Pennies writes, You Never Know What Something Is Worth Until You Sell It.  Since we’re in the subject of selling stuff, Mr and Mrs PoP decided to sell their Jeep on […]

  • […] in large part to selling the Jeep, we had an awesome month on the income side of things, which is awesome.  But on the other hand, […]