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Kelley Blue Book Trade in Value for Used Cars Valuation



What is trade in value?

When consumers buy a new car and sell their current vehicle to the dealership, that vehicle is called a trade-in. Almost always, the amount of money that a dealer will offer for the vehicle, the trade-in value, is less than the amount of money that you could get by selling it on your own, the market value.

As a car owner, you might decide to sell your car to the dealership and buy a new one. That vehicle is called a trade-in and the worth of the used car in terms of money is called the trade-in value. The trade-in value is therefore the amount of money a dealer will offer for a vehicle, this is most always less than the amount the car owner could sell it in the outside market, market value.


A new car starts losing its value as soon as its tires hit the public roads. This and other factors are considered to determine the value of a not-new car. Car dealers and buys have relied on the information from certain sources to make well-informed car, truck and SUV buying decisions.

The Kelley Blue Book trade-in value

Kelley blue book trade in value for used cars

Since 1926, new and used car buyers and sellers have relied upon Kelley Blue Book for authoritative and unbiased information. Most people rely on the Kelley Blue Book (wrongly spelt Kelly blue book) making one of the popular pricing guides in the country.


Kelley Blue Book receives real-world used car prices on a daily basis from wholesale auctions, independent and franchised dealers, rental fleets, auto manufacturers, lessors and private party transactions.

To determine car values and other products, pricing data from these sources along with historical trends and economic conditions are analyzed using the Kelley’s proprietary algorithm. Other factors that determine the  are industry developments, time of year and location.

The Kelley Blue book data is very useful to determine trade-in value especially when you are planning to sell your used vehicle. Follow the following suggestions in your quest to get the best trade-in value for your used vehicle using the KBB pricing guide

If you are buying a used car from a private seller, show KBB’s car condition definitions to the seller especially if the selling price is far higher than it is worth

Don’t rely on one pricing guide, apart from the Kelley blue book, sort out other sources like Black book and NADA guide for a fair worth of trade-in value

Be able to negotiate the price irrespective of what the kbb trade-in value is.

How to use KBB Trade value for Used Car

Car value estimation on the Kelly Blue Book is an estimation of a fair market range and a fair purchased price of that car type. It is neither accurate nor wrong. It is a car value guide. Everyone seems to have access to the KBB trade value likewise car dealers. So they as well have that in mind while trading for your car.

Unlike you, the individual seller, car dealers use the Manheim Market Report (MMR) to guide their trade value estimation. Though they do not rely on one source, the value from these two reports (MMR and KBB) are compared. The MMR is an action report that averages together hundreds and thousands of vehicle sales (nationally or regionally), it gives a premier indicator of wholesale prices. This is not a free report so it’s often obtained by those in the daily business of cars.

Here is how a typical car dealer use both reports (MMR and KBB)

If the KBB Value of a particular used car type is $10,000 and that the MMR is reporting the average sale price to be $11,200 then the car dealer will probably use a percentage off the KBB value to value your trade and might start by offering you $8,000. The value gap between the two reports would make them flexible enough to want to add more green (this dependent on your knowledge of the current KBB trade value). They probably might give up not more than a $10,500 but they would hardly reach the MMR trade value (as you might have no idea).

In another situation like this, if the MMR average auction sale price is $6,500 and KBB trade value is recording $10,000, dealers would stand more on the MMR price. He would probably not want to put any more than $7,000 into your trade.

Remember, KBB values are only estimation and do not necessary mean the true price. But the knowledge of the KBB value estimation of your used car before trading it is very important. This guides your decision as a used car seller.

What to consider

The condition of your car is an important factor. Though a KBB value rate all these factors but you alone know the true condition and how much it could worth.

Consider the KBB trade value depending on your car type and if the condition is still in shape and nice, you shoot a 10-20% down price from the KBB value estimation. Just like the example above, you might consider higher price than the KBB estimation though a car dealer hardly add one more dollar to an estimated value from Kelly Blue Book. But it depends on how persuasive you are as a seller.

If the car condition is not as good, you are look in at a 30-40% discount but do not expect the price to shoot higher than the KBB value. I’m sure the car dealer would not hold on to complete the transaction so you can give a fair judgement based on the value estimation.

Some important dos and don’ts

  • Do not accept the first price offered by a car dealer.
  • If your car is really worth the price you ask, demand for it. A used car with very few repair and it appear to be a ‘front line ready car’, car dealers try as much not to let such go.
  • Before you put up your used car for sale, take time to work on it. It is profitable to have a used car on ‘front line ready’ deals queue up for such cars. So service your car, replace bad tires and take time to detail all these excellent features not commonly expected in used cars.

Be aware that even with the MMR or KBB trade value, a car dealer can size the worth of your car by first impression and mind you, they take their time to inspect the car.

 

 

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