So I’ve been investigating a possible purchase of a used car, and I’m looking at what severall local dealers are listing via Autotrader Online and their linked websites. As I’ve identified a few candidates, I’ve run their specs through Kelley Blue Book to check pricing.
Well, after doing four, I’m a little surprised. For one that Kelley says should be $32K, they’re asking $27K, for one that Kelley says should be $28K, they’re asking $22K, for one that Kelley says should be $40K, they’re asking $32K. While I’d find it hard to make myself pay this much for a car, out of curiosity I checked one that they’re asking $40K for, and Kelley says it ought to be getting $52K!
What is going on here? These are cars at three different dealerships, and I’ve checked VIN histories on all of them - none show a problem. Has Kelley just plain lost track of the market? Is this, for some reason, THE weekend of the year to buy a car?
The only other thing I can think to check is what they’ve actually got on the window sticker, and I’m heading over to one of these dealers now to check that.
Ringo, we have experienced the same thing. We just bought an Audi A4 today at a dealership that Blue Book said was worth $6K MORE than we paid for it. Weird.
There’s a reason for this. The blue book value means nothing! There is the wholesale and retail blue book value. Both of these are to help dealers make more money. Not a reliable way to tell you what your car is worth. The prices you’re seeing are inflated so the dealer can sell you a car for more than it’s worth, or take off a few thousnd and make you think you’re getting a great deal.
The best way to tell what you’re car is worth is look in the want-ads and see what others are asking for the same year, make and model.
It depends on what book you are reading. There is a dealer price kbb book, that’s the price dealers are asking. Those are NOT the prices the cars are sold for on average.
I suggest you run your cars through edmunds.com & kbb.com instead of looking in the book.
As one who worked in the used car biz for five years, I can unequivocally state that whenever we saw a buyer on the lot with a copy of the Kelly Blue Book in hand we were very happy to see that customer. We always felt KBB was about $3,000 high on average retail, plus or minus depending on the model.
For us, the only book that counted was the Black Book, the average wholesale value of used cars seven(?) or fewer model years old that had sold at local dealer auctions the previous week. To my knowledge, the only ones eligible for a Black Book subscription were authorized dealers and lending institutions, so it was difficult but not impossible for a consumer to get this info.
To determine trade-in value, the dealer usually started at black book and then deducted for excess miles, poor condition or appearance, necessary repairs, etc. They never added for options, such as sunroofs or alloy wheels.
To determine retail asking price, they usually started at what they purchased the vehicle for and added any reconditioning expense. Then they add enough fluff dollars to allow a discount on the vehicle and still make an adequate profit. The final price gets adjusted if it seems too high or low for the market.
Sometimes it becomes apparent right away that they will be unable to sell the car retail at a profit (they paid too much for it, significant undisclosed/undetected damage) so they will take their losses early and wholesale the car.
Although I wouldn’t bet my career earnings on it, I would have to guess that the KBB website’s values get updated more often than once a year. I would even have to guess KBB offers an updated paper edition at least four times a year.
I’ve found Kelly Blue Book’s estimates to be wildly high as well. Try Edmunds.com, I think they give estimates which are much closer to reality, and you can really get specific with options etc.
One of the big problem’s with the Kelley Blue Book is that people always overestimate the condition of their car. Very few people have “excellent” condition used cars.
As I said, try kbb.com because you can enter the zip code & tons of other things about the car, including like if its red or green, which effects it’s value… also carbuyingtips.com is great.
x-ray vision, I got this from edmunds.com a year ago:
“All too often, however, the dealer will direct your attention to a printed price guide — and often it will be the Kelley Blue Book. (Kelley publishes more than one price guide for used cars, but the one your dealer is likely to use is the one labeled “Kelley Blue Book Auto Market Report — Official Guide,” the version of the book that Kelley sells to dealers.)”
"Our advice is simple: If a salesperson whips out a copy of the dealer edition of the Kelley Blue Book and points to one of its retail prices, say to him or her: “It is nice to know the price that Kelley thinks dealers are asking for this car, but can you show me what dealers are actually selling this car for?”
Well, I tried Edmund’s and the prices in general seem a bit more realistic. Of course, when I checked out their search for cars in my area, the first one up was one for which the dealer listing it is asking $35K, while Edmund’s says it should sell for $59K. Clean VIN history - I have to at least go look at it.
OK, so just how does one figure out what a car is worth? For shits and giggles, I stopped at a CarMax lot this evening and checked out three cars of potential interest. Comparing them as well as one can with the different formats of the two websites, we get:
" so just how does one figure out what a car is worth?"
That depends on the condition of the car & you would have to visit the cars in person & compare. Also hidden things you don’t know about can determine value. e.g. did they turn back the odometer?
My rule is that a car is only worth what someone would pay for it. Check ebay.com, they have a car auction site where you can see what people paid.
Frankly, if I had to buy used I would probably buy from a auto rental agency like enterprise.com they have a set price for their cars & often they put them up for sale once they have about 30k on them.
As an insurance adjuster that handles total losses regularily, I can also confirm that Kelley Blue Book is extremely high. In my local market, some dealers even pring the KBB web page and say “Look at us…We sell less than Kelley Blue Book”…woohoo.
Autotrader.com and Cars.com are both ASKING prices…not what they’ll actual sell the car for.
You can only use any “book” value as a guide, it’s not gospel. I like NADA because it’s not an opinion, it’s the actual dealers reporting what the cars actually sell for.
But the real value of a car is what the local market will bear. Check other dealers in your area, local newspapers, and negotiate, negotiate, negotiate.