For the last decade or so, the world wide web has been touted as the greatest resource for people selling their used cars and prospective buyers. Whether you are buying or selling most people rely on online used car pricing guides to determine exactly how much a car is worth. When it comes to a vehicle’s mileage and current condition it can be hard to determine the true value of a vehicle. You might be wondering what car guide is the most accurate? Can you rely on online car pricing guides?
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Some people underestimate the importance of using car pricing guides. However, whether you are buying or selling a car to a private buyer or to a dealership knowing a car’s cash value can make a major difference.
What Car Pricing Guide Is Most Accurate? – Kelley Blue Book Value Top Rated Automotive Guide
More than twenty million visitors log onto Kelley Blue Book each day, making it one of the most used car pricing guides on the internet. Kelley Blue Book was originally established in 1926 as a book by Les Kelley that revealed the list of cars he desired in his collection and how much he was willing to pay for them. It’s safe to say that the Kelley Blue Book has become somewhat an authority or expert source in this field.
While numerous automotive experts have coined Kelley Blue Book as the most popular and trusted guide when it comes to obtaining a vehicle’s value, many still wonder is it: accurate and reliable? Let’s take a look at the process this website uses to determine the value of a car and an honest assessment of some of the issues that consumers may face while using this guide.
How KBB Determines A Car’s Worth
Kelley Blue Book uses a variety of sources to calculate a car’s current value in the market. This automotive guide receives used car prices on a daily basis from automobile manufacturers, franchised dealerships, private party auto sales, rental fleets, and wholesale car auctions.
The website aggregates this information, uses a sophisticated algorithm that analyzes this data. Additional factors such as; location, time of year, historical trends, and key industry developments are used to produce the final value of a vehicle. This in-depth process allows KBB to be able to provide:
Private Party Value – How much a used car is worth when sold or bought in a private transaction.
Trade-In Value – How much you can expect to get if a used car is traded in at a dealership
Certified Pre-Owned – The value of a used car that is covered by a CPO program
Retail Value – This refers to the average price most dealers are going to ask for a specific used vehicle.
Top KBB Discrepancies
No, car pricing guide is perfect and Kelley Blue Book isn’t exempt. There are a few factors that could affect KBB accuracy which includes:
Slow To Update Information
Because Kelley Blue Book aggregates data from so many sources this website can experience a lag time in updating its information. So sometimes users may receive a car value that doesn’t always reflect the current industry and market trends or the economic condition. This is normally because the automotive industry is constantly evolving and changing. Keeping up with these adjustments in real-time isn’t always possible.
Consumer Bias
Yes, consumer bias is a real thing. Often, buyers think that the car they are selling is worth more than it is. Most people have sentimental feelings for their vehicle which causes them to misjudge the condition of the car. When your expectations are aligned with reality it’s easy to lose faith in KBB values.
Mismatch Data When Compared to Professional Sources
Professional dealers rely on the Black Book by the National Auto Researcher and the Manheim Auto Report to determine the true value of a vehicle. However, these resources aren’t available to the general public. The values presented in these professional resources are slightly lower than Kelley Blue Book.
What Car Pricing Guide Is the Most Accurate – What About Edmunds?
Edmunds is another popular source that can help consumers determine the market value of a used car. Edmunds was established in 1966 by Ludwig Arons. As Kelley Blue Book, Edmunds started publishing books that outlined automotive specifications which helped consumers make educated decisions when purchasing used cars.
Over the years, Edmunds has garnered a great reputation for providing reviews on the most popular vehicles on the market and car pricing estimates. Just how reliable is the company’s car appraisal tool?
Edmunds car appraisal tool mainly relies on data from dealerships that have provided the company authorization to access their sales data. Edmunds receives sales data on a weekly basis to provide up-to-date information. This data is processed by the company’s team of automotive and industry experts who take into consideration other crucial factors such as value, location, and seasonality to update the website’s valuation tools.
Along with its car appraisal tool, Edmunds also provides additional resources such as the True Market Value and True Cost to Own. The True Market Value tools allow consumers to see the average price consumers are paying for new and used cars in their area. This insight can help buyers make informed decisions while it provides pricing guidance for sellers.
Edmunds True Market Value tool aggregates car pricing data in your specific zip code. Edmunds processes sales data from over twenty-five percent of the auto dealerships in the United States. Therefore, you can rest assured that their TMV tool is accurate.
True Cost to Own is a pricing system designed for buyers to find out the associated costs of owning a particular vehicle. True Cost to Own uses crucial factors such as fuel costs, average insurance costs, and depreciation values to determine how much a buyer can expect to spend on maintaining the vehicle over the next five years.
What Car Pricing Guide Is Accurate? – Why You Should Rely on National Appraisal Guides
The National Automobile Dealers Association is another one of the top appraisal tools used to determine the value of used and new vehicles. NADA has been around for nearly eighty years and they have developed relationships with a plethora of institutions all of which help them provide pricing guides to consumers.
National Appraisal Guides utilizes data from car wholesalers, used car dealerships, and equipment manufacturers. They use supply and demand as well as other macro-factors in their online valuation tools. They also utilized AutoTrader to provide pricing information.
When compared to appraisal tools from Kelley Blue Book and Edmund, National Appraisal Guides is known to generate values that are much lower than the values presented on these websites. According to automotive experts, NADA values are so low because they have a vested interest in low wholesale prices and high retail prices.
NADA also doesn’t have any historical data that they can use to adjust to current economic conditions as the values of cars begin to drop. NADA is often used by banks and financial institutions to show inflated retail prices when consumers are applying for auto loans. Although NADA has been around for decades they aren’t a highly trusted source in the automotive pricing industry.
Kelley Blue Book vs Edmunds Which Pricing Guide Is Most Accurate?
There are several automotive experts that will tell you that Kelley Blue Book is the most accurate pricing guide amongst the two. Most people tend to lean towards KBB because it’s more popular. However, popularity doesn’t necessarily equate to accuracy. Both Edmunds and Kelley Blue Book offer great general pricing information both of which are based on current market conditions and standard price levels based on the make and model of the car.
Kelley Blue Book appraisal tool uses a pricing structure that is more favorable to dealers so the listed retail value for a vehicle may be slightly higher than what the average price is especially when you compare it to other guides like Edmunds. When you enter the same vehicle specs on each site they will generate slightly different values. Consumers can use figures from both websites to calculate the average price for the vehicle in question by simply dividing the values
by two.
Edmunds robust appraisal engine offers four car condition categories while Kelley Blue Book only offers one. Depending on how honest you are about your car’s condition, Edmunds could be slightly more accurate than KBB in some aspects. The great thing about Edmunds is that besides their standard car appraisal feature they provide additional tools that narrow values down to the user’s specific area. This can further help buyers make wise purchasing decisions.
On the other hand, NADA guides were specifically designed for members enrolled in the National Automobile Dealer’s Association trade group. You’ll find that NADA guides are typically higher than KBB and Edmunds because they use an algorithm that assumes that trade-ins are in very clean condition. Any values you receive from this website you’ll have to adjust based on the condition of your vehicle.
J.D. Power is an additional popular resource that provides pricing guides. They use a rating system that only applies to new cars. Their used car search feature uses your zip code to provide quotes from dealerships in your area. Compared to Edmunds, Kelley Blue Book, and NADA this resource lacks the robust appraisal engine that these websites use.
The Bottom Line
Whether you are a buyer or a seller Kelley Blue Book and Edmunds are the best car pricing guides to use to help you determine the true market value of your vehicle. It’s a good idea to use both appraisal tools to get a good general idea of how much your used car is worth. According to experts, it’s wise to consult one or more pricing guides to calculate the average price for the vehicle you plan on selling or buying. There are dozens of appraisal tools on the internet. While they all might not be as advanced as KBB and Edmunds they can certainly be beneficial when you compare the price quotes you receive all across the board.
Also, consumers should not solely rely on values generated by these appraisal tools. These price quotes should simply serve as a guide. Search the internet for the car you’re interested in buying or selling to see how much they are generally going for. Car shopping websites like Carvana, Auto Trader, and Auto Direct can be very helpful for finding out current pricing information.
Once you find a few different prices on the internet, you should jot them down and do the math to come up with the average price. Come up with about two to three average prices and compare them to the values you generate on Kelley Blue Book and Edmunds. This can help create a much clearer picture of what’s a reasonable price for your used vehicle or what’s the general asking price for the vehicle you want.
Although insider pricing guides like Manheim and Black Book aren’t easily accessible to the public, some consumers have been able to get their hands on such resources. You should steer clear of these resources because the prices these appraisal tools generate are inflated and specially designed to help dealers set their prices.
Cash Car Buyer – Salvaged Appraisal Tool
Here at Cash Car Buyers we purchase used vehicles in all kinds of conditions. We use an independent appraisal system to determine a vehicle’s worth which is based on the make, model, year, and current condition of the vehicle. As one of the top auto salvagers, we also take into consideration the depreciation of the vehicle. The value of a car decreases tremendously if it’s been involved in an accident.
Automobiles that are completely totaled are purchased from companies like ours using a scrap value system. The scrap value of your vehicle is determined by its weight and how much recyclable metal the car has. If you are searching for an accurate quote for your totaled or junk vehicle you can use the Cash Car Buyers appraisal tool.