When buying or selling a used car, millions of Americans rely on Kelley Blue Book (KBB) to determine the value of the vehicle.
Although KBB is recognized as one of the most popular guides in automotive pricing, the question remains; is it accurate and reliable?
Here’s my appraisal (sorry, couldn’t resist the pun).
Options on Kelley Blue Book
Before we get to pricing, let’s first discuss the different types of purchasing and sales transactions listed on KBB.
- Private Party Value – Determines pricing for a specific used car from a private seller.
- Trade-In Value – Calculates the dollar figure you are likely to receive from a dealer for a trade-in.
- Certified Pre-Owned Value – Lists the price of used cars that are certified.
- Suggest Retail Value – Price dealers are asking for a specific used car.
How Does KBB Price Cars?
Ah, the secret sauce! There are several factors that go into KBB’s pricing model. On a daily basis, KBB receives real-world pricing information from wholesale auctions, independent and franchised dealerships, manufacturers, rental fleets and private party transactions.
KBB’s proprietary algorithm takes that pricing data and then factors in even more data, such as; historical trends, current economic conditions, time of year, and your location.
Are There Any Issues with KBB Pricing?
Based on my research, the biggest criticism of KBB pricing seems to come from a lag in (accurate) pricing updates. As mentioned, KBB is constantly receiving a ton of data from several different sources.
Unfortunately, it appears this data doesn’t always make it to KBB as quickly as some would like. As a result, prices listed on site may not always reflect the latest pricing trends of a given vehicle.
Another potential concern for consumers; KBB’s pricing tends to slightly favor dealers. The listed retail prices on KBB tend to be higher than other vehicle pricing guides. With that in mind, be prepared to negotiate!
KBB is a very valuable resource to use as a general guide. Their pricing tools will allow you to establish a baseline for your negotiations. But as we’ve established, KBB pricing tends to slightly favor dealers, so be sure to receive multiple quotes before assuming what you’ve seen online is the best deal you can get.
Car shopping can be a bit like visiting the doctor, no matter what the first guy/gal says, you should always seek a second opinion! Check other websites or pricing guides and calculate an “average” price for the vehicle you are trading in, selling or planning to buy.