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Are Kelley Blue Book Values Reliable and Accurate?
For consumers who want to buy a used car, it is very important to assess the current value of the car they are going to buy. Kelley Blue Book (KBB) is known as providing trusted guides in car pricing and values. That is why it becomes one of the most popular guides. The evidence of its popularity can be seen from the number of visitors logging on to the websites. Every month, there are more or less 20 million peoples visiting the website. It can be concluded here that many people rely on KBB when it comes to buy vehicles.
Although the website is very popular among car buyers and even automotive experts agree that Kelley Blue Book give reliable values, the question whether they are accurate still arise. Here is the assessment to find out the accurateness and reliability of KBB.
How KBB Set the Values of Used Cars
The sources used by KBB in getting the real-world prices of used vehicles are from rental fleets, car manufactures, wholesale auctions, dealers, and private sales transactions. The prices are monitored on a daily basis. The pricing data, then are analyzed using a combination of Kelley’s patented algorithm, latest economic conditions, location, historical trends, and the automobile industry growth. All of these factors determine the values of used cars.
There are some values of used cars generated from the analysis. The first one is a private party value. It determines the price you have to pay for a particular used car sold by a private seller. The second is a certified pre-owned (CPO) value. It determines the price of cars sold in the CPO program. The next one is trade-in value which determines how much you want to get for a trade-in from a dealer. The last is the suggested retail value that sets the amount the dealers generally ask for a particular used vehicle.
Does Kelley Blue Book Show Accurate Values? – Check out the video
Factors Affecting the Accurateness of KBB Values
Some issues related to KBB pricing may occur because there some factors that can influence the KBB values. Here are the factors:
- Consumer bias. Some sellers or traders mostly think that the care they are trading have better condition than the valuation structure set by KBB, This misjudgment related to the car condition may not match the KBB values.
- Mismatched data. Instead of using KBB, many dealers rely on either Manheim Market Report or Black Book for determining wholesale values. The problem is that they tend to skew the price of used car in order to appeal consumers. That is why their values are lower than KBB values.
- Lag. The pricing data analysis done by KBB can take time. Therefore, the prices listed do not always reflect the most current condition and trends of the economy.
What are the Solutions?
For consumers who use KBB as the primary guides, it’s suggested to do the followings:
- Bargaining. Listed retail prices of KBB are typically higher than other guides. So, you can negotiate. Start with the retail price and ask for lower prices.
- Printing Out Definitions. If you purchased a used vehicles from a private seller and you think the price is too expensive, show the KBB’s print-out of car condition definition.
- Asking for sources. It is necessary to ask for sources because Black Book, Manheim, or other insider guides set lower wholesale prices.
- Find other guides. Consulting other guides is useful to get an average value for the used car you are planning to buy, sell, or trade.
Alternative Resources
Talking about other guides, there some additional resources that you can use to provide more information before selling, trading, or buying used automobiles.
- Edmunds
While KBB only has four categories of car conditions, Edmunds offers five categories. Edmunds is considered as more accurate than KBB. Bur this is not always the case. That is why, using several sources is recommended.
- J.D. Power
This guide is recommended for those who want to sell a car in a specific area.
- NADA Guides
NADA pricing is usually more expensive than other guides due to the specific standard it uses in setting up the price. So, you should adjust the NADA prices down.
- Consumer Reports
From Consumer Reports, you can get lots of information such as general pricing on used automobile, suggestions on cars to buy and not to buy, and information on reliability.
The Bottom Line
Different consumer guides use their own algorithms and this results in different car pricing. For this reason, it is better to check some main consumer guides to determine the average price. Although KBB is a good resource, it should not be used alone. There is no perfect guide. The best thing to do is to combine at least three main consumer guides to get the accurate and reliable value of used cars.
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