For almost eighty years, NADA Guides and Kelley Blue Book have served as a guide for establishing price points, helping buyers and sellers fairly negotiate the value of new and used cars. Often recognized as the premiere publications in their industry, both guides can be counted on to provide unbiased facts and serve as an essential tool during the car buying process.
The trouble is that while both guide books are meant to help consumers and dealers establish value, there is often some discrepancy between the two sources. For instance, when used to calculate the value of the same vehicle with all the same specs, Kelley Blue Book and Nada Guides will often come up with two completely different numbers – Leading many to wonder, “Which one is accurate?”
Comparing NADA and Kelley Blue Book
The discrepancy can be attributed to the simple fact that Kelley Blue Book and NADA Guides use two different methods for calculating value. In the most basic sense, Kelley places a large amount of emphasis on mileage, condition, features and popularity, while NADA tends to focus on the vehicle’s wholesale price (i.e. what the dealer paid for the vehicle).
But before we go too far into examining how the guides are different, let’s take a look at what the two guides have in common.
Similarities between Kelley Blue Book and NADA include:
- Used by consumers and dealers
- Include values for cars, trucks, SUVs, and RVs
- Updated regularly
- Consumer focused
Despite these documented similarities, there any number of differences between the two sources, and determining which one to use can depend on your specific needs.
The Advantages of Kelley Blue Book
The origins of Kelley Blue Book date back more than eighty years, when a young car salesman from California, Les Kelley, began compiling a list of car prices as a tool for helping him evaluate vehicle value. Since those early beginnings, Kelley Blue book has become the go-to-choice among both dealers and consumers.
For the most part, Kelley Blue Book uses a standard set of criteria to calculate value:
- Local market conditions
Using these criteria in conjunction with determining the condition of the actual vehicle (Excellent, Good, Fair and Poor), a barometer is established, allowing consumers to compare vehicles across dealerships or between private party sellers.
The advantage to using Kelley Blue is its consistency across markets, meaning you can compare the pricing of a dealer in Florida with one in Nevada.
The Advantages of NADA Guides
The history of NADA Guides dates back almost as far as Kelley Blue Book. First published in 1933, these guide books continue to be relied upon by hundreds of thousands of consumers and trade professionals across the country each year.
The criteria NADA uses to calculate the value of a vehicle includes:
- Wholesale price
- Local market demand
- Real-time retail market prices
Keep in mind that NADA usually calculates a value that is higher than Kelley Blue Book. The reason for this is that NADA assumes the vehicle to be in relatively good condition – which in turn has earned Kelley Blue Book the reputation for more accurately reflecting the buyer’s objective.
The truth, however, is somewhere in the middle. Both guides can serve as a great starting point for negotiations. But, neither should be taken as the sole source of information. Instead, when used in conjunction with one another, NADA Guides and Kelley Blue Book can both be invaluable during the car buying and selling process.