Are Kelley Blue Book Prices Accurate?
When buying a car, searching for a car with the right price, and all the features you require can be difficult. Similarly, and if you’re on the selling side of things, deciding on a fair figure to sell your vehicle for can be equally troublesome.
For the most part, Kelley Blue Book (KBB) is one of the most accurate sources when it comes to prices for buying and selling used vehicles.
Kelley Blue Book is a powerful resource. However, it is just one of multiple sources that folks use to help guide them in the car buying or selling process. Keep on reading to learn about what makes KBB so accurate, and some other reliable sources for car prices.
What Is the Kelley Blue Book?
The Kelley Blue Book was first published in 1926 and was actually a blue book. At the time, it was a resource, created by Les Kelley, for the cars he wanted to buy and sell. In the subsequent decades, the Kelley fortune grew, subscriptions to the KBB soared, and the KBB became the leading source for car buying and selling information.
Nowadays, the KBB continues to be one of the most trusted sources in the used car market. KBB relies on a massive data bank that leverages sophisticated calculating technologies in order to create the most accurate price estimate possible.
How Are Kelley Blue Book Prices Calculated?
Depending on your needs, Kelley Blue Book is able to create three different value types:
- Private party value: this is the value when sold to a private party or individual
- Trade-in value: this is the value of the vehicle when traded in with a dealership
- Suggested retail price refers to the value most dealerships are paying
- Certified pre-owned (CPO) value refers to the value for vehicles in the CPO program
KBB relies on a powerful algorithm to crunch the numbers, so you don’t have to. The algorithm is incredibly complex, and relies on key information in order to do its calculating:
- Historical pricing trends
- Current economic conditions
- Industry changes
- Time of year
- Geographic location
- Year, make and model of the vehicle
- Mileage and condition
- Advanced features
Despite being a very helpful resource, there are a few fall backs related to the estimates that KBB offers.
Critiques of KBB Values
Over the years, KBB has become one of the leading sources in car buying and selling estimates. The data they’ve collected, and the algorithm they utilize to produce estimates is vetted, and for the most part, very reliable.
However, there are just a few items that can affect the accuracy of the KBB values:
- Consumer Bias
- Lag time
- Varied Data
When it comes to our beloved cars, we tend to over-price. This is normally a result of some bias related to how, as the seller, we think the car is in better condition than it really is. Unfortunately, if you misjudge the condition of the car you are trading-in or trying to sell, the value that KBB estimates may not match what you originally concluded yourself.
Kelley Blue Book relies on historical data, as well as current changes in the car buying and selling markets to create their estimates. Unfortunately, however, when it comes to the most up-to-date information, there can be a slight lag time.
In other words, the values that KBB produces may not always reflect the most recent trends and economic conditions.
When it comes to trade-in value for vehicles, most dealerships choose not to use KBB. Instead, they rely on National Auto Research’s Black Book, or the Manheim Market Report. Neither of these sources is available to the public like KBB is.
The reason for this is that these sources tend to offer lower pricing than KBB when it comes to trade-in and wholesale pricing.
So if you are relying on KBB for an estimate for a vehicle you would like to trade in with a dealership, be prepared for some varied data.
Suggestions for Using Kelley Blue Book
Kelley Blue Book is an excellent guide when it comes to researching pricing for vehicles. It is a powerful resource and can help in many ways. Here are some suggestions for how to use Kelley Blue Book.
Unfortunately, the KBB values tend to favor dealerships. This means that the retails prices listed on KBB can be higher than other sources. So if you choose to use KBB as a resource, we recommend you start with the listed price, and negotiate downward.
KBB is great because when it comes to pricing estimates for used cars, they provide measurable and objective criteria. This is perfect for combatting against the consumer bias problem, and inflated value estimates.
This is especially helpful when purchasing a car from a private party. By using the criteria created by KBB, you can negotiate a price that you think is too high.
Gather Other Opinions
KBB is just a starting point. It is best utilized when combined with information from other sources. When deciding the price you want to sell your car for, or when negotiating with a dealer for your dream car, we suggest you also rely on other resources as well.
Other Resources for Accurate Estimates
Kelley Blue Book is fantastic. But it should not be the only source you rely on when deciding to buy a used car, or sell your vehicle. There are other resources out there that are also extremely helpful:
The bottom line is that none of the resources from above, KBB included, is perfect. However, when leveraged all together, they can provide the most reliable and accurate information possible. This will help your transaction go smoothly, and ensure the fairest price for all parties involved.
Selling Your Used Car at Prieto Automotive
We firmly believe that you should sell your used vehicle with us. At Prieto Automotive, we can offer:
- An easy transaction process: we have years of experience and know the drill
- Competitive pricing: we know you want the most for your car, and so we won’t low-ball
- Same day payment: cash or check payments the very same day
- A safe environment: no more sketchy meetups with Craigslist customers
- Pricing for any vehicle: bring in any vehicle, no matter the condition
We understand that some folks believe that selling a car can be a cumbersome process and a major headache. Well, we are here to prove those folks wrong.
If you’ve got a used vehicle that needs to be sold, bring it into Prieto Automotive for a free evaluation, and let’s make a deal!