Determining the value of your used car requires more just than a rough estimate. When it comes to trading in your vehicle or selling it to a third party, accurate pricing is important. Without it, you run the risk of asking too much (and not finding a buyer) or selling it for too little. That’s where Kelley Blue Book values come in.
However, there are many different evaluation resources that you can use. These are known as “books.” Dealerships and car owners can use these books to evaluate their car’s value. Which one should you be using?
Today, we’re going to go over the most popular book, Kelley Blue Book. We’re going to take a look at what it is, discuss the values they give, and go over when to use a Kelley Blue Book estimate.
What is the Kelley Blue Book?
Kelley Blue Book began in 1926 and has become the standard for used car prices. Part of its popularity came from the fact that they used to publish a physical book that was blue, and it became widely used.
These days, the Blue Book lives at KBB.com, where it provides real-time evaluations of your vehicle. When you input all of the car’s information and details about its condition, you are given both the trade-in value estimate and the private party estimate. You’ll also receive a fair purchase price and pre-owned price (in case you’re the one looking to buy the car).
While they no longer distribute a physical book, the Kelley Blue Book remains the gold standard among consumers that want to learn how much their car is worth.
How Does Kelley Blue Book Reach Its Value?
Kelley Blue Book is vague on their website when it comes to the ways that they evaluate vehicles. Their exact algorithm is proprietary, which means that we can’t pick it apart. All we know is that it depends on data intelligence and uses predictive analytics and field analysis to come up with an estimate of your car’s price. According to their website, they use over 250 data sources to come up with their estimates.
We do know that Kelley Blue Book uses the make, model, mileage, and condition of various systems to come up with its value estimate. They also take into account the type of transmission, engine size, and any custom options that might increase the vehicle’s value. Of course, we can bet that they calculate depreciation, too.
Are Kelley Blue Book Values Accurate?
Generally speaking, Kelley Blue Book values can give people an over-inflated idea of what their car is worth. If you visit a dealership, the used car manager is not likely to agree to your Kelley Blue Book estimate.
Why is this? It’s largely because people overestimate the condition of their car when they’re using Kelley Blue Book’s tool. A small dent might not be worth mentioning to you, but an appraiser will certainly take note of it. Car dealerships primarily have to consider how much work will go into fixing the vehicle up so that it’s ready to sell, which is usually around $2,000.
Kelley Blue Book is a trusted tool for consumers, but dealerships don’t care what it says. They’ll use other tools, such as the Black Book and vAuto to determine what to offer you for your trade-in.
So if we’re strictly talking about dealerships, Kelley Blue Book values are not considered to be accurate. When it comes to private sales, though, Kelley Blue Book evaluations can be quite valuable. Private sellers and buyers both tend to use them when they’re navigating a deal.
When Should I Use Kelley Blue Book Values?
You should use Kelley Blue Book when you’re looking to sell your car to a private party. Since the person you’re selling it to has likely already run a report, as well, you can use these estimates as a starting point for your negotiations.
Ultimately, Kelley Blue Book is a lead generation tool for car dealerships. They do their best to evaluate their cars, but their income generator comes from selling your information to car dealerships or directing your traffic to a car dealership’s website.
Even though you may have been raised to think of Kelley Blue Book as the ultimate decision-maker when it comes to a car’s value, if you’re dealing with the dealership, you’re better off looking at the Black Book or vAuto. Save Kelley Blue Book for the times in which you’re selling or buying a car privately.
Keep in mind that YAA members have access to Black Book estimates so that you can be prepared for what a car dealer might offer you.
Interested in learning how people come up with car values? You can learn more about other evaluation books here.