Think of Kelley Blue Book (KBB) as a negotiating tool, a negotiating tool that helps buyers and sellers establish a common ground during the car buying process. In short, KBB takes some of the guesswork out of determining car value. Through a detailed analysis, Kelley calculates the average value for each car being sold. With this information at their disposal, buyers and sellers can negotiate accordingly.
How Accurate Is Kelley Blue Book?
Unfortunately, the answer to this question is not black and white. In reality, Kelley Blue Book pricing can serve as a starting point for negotiation, but it often does not represent how much consumers are actually willing to pay.
For instance, Kelley Blue Book calculates the average sticker price listed. However, this is not necessarily a reflection of what that vehicle is selling for. Just because someone is asking for a certain price does not mean that that someone else is willing to pay that price. In reality, the negotiated price is often much less than the average retail price.
When to Use Kelley Blue Book
The above is not meant to discourage you from consulting Kelley Blue Book. For many than 80 years, KBB has served as an unbiased source of information, helping buyers and sellers make informed decision. When used correctly, Kelley Blue Book can help with any number of car buying and selling decisions, including:
- Deciding whether to trade in or sell privately
- Negotiating the retail price
- Determining vehicle condition
Trading vs. Selling
When it comes time to sell your vehicle, your first decision will be whether you want to trade it or sell it privately – and Kelley Blue Book can help you make the final decision.
- Trade-In-Value: This is the amount the amount that consumers can expect to receive from a dealer for their trade. Keep in mind, this value is lower than what you would receive if you sold the car privately..
- Retail Price: This value is representative of the average dealer’s asking price for a used car, and it should serve as a starting point for negotiation between a consumer and a dealer. As noted earlier, this is just an estimate of asking price, and in no way reflects how much is actually being paid for that vehicle.
The Effects of Vehicle Condition
A vehicle’s condition can have a great impact on how its value is estimated. Kelley Blue Book calculates a vehicle’s condition by placing it within one of four separate categories:
Depending on which of the categories the vehicle falls within, the value can fluctuate dramatically. However, it is important to keep in mind that this is somewhat of a subjective process, with the seller often overvaluing the condition of the vehicle.
To avoid discrepancy, be sure to read Kelley Blue Book’s description for each category. Only by ensuring that the vehicle meets the defined criteria can you be sure you are settling on a fair price.
UsedCars.com has a unique relationship with Kelley Blue Book so that each and every listing compares the suggested retail value against the dealer’s pricing so that you can see what kind of deal you are getting for that vehicle. You can even browse through vehicles that are sorted by percentage off the Kelley Blue Book suggested value in the “Best Deals” section of the site.