"It's not easy to come to an agreement on the price of a car," says Eric Charles, a used car dealer and master mechanic in the Chicago area. "Every used car is different and everyone has their own ideas about what each car is worth. That's why an outside source like Kelley Blue Book is important."
Kelley Blue Book has been an independent source of vehicle values since its founding in 1926. The fact that it is an independent source of information is important. Because value
With any new car haze, an unbiased source of information is important to help the buyer and seller come to an agreement on the price of the vehicle.
Without an established, independent source of vehicle value, eachused carnegotiating a price would be infinitely more complicated. Nearly a century of Kelley Blue Book has
provided the unbiased pricing data in the Kelley Blue Book Used Car Price Guide. That information is important for consumers and used car dealers, as well as others who need it: financial institutions, insurance companies and government agencies. For used car pricing information to be useful, it must be accurate, if not "perfect." And it must come from a source that is credible and respected. The parties must believe
used car prices are reliable to rely on when negotiating and closing deals. UsedCars.com uses the Kelley Blue Book Used-Car Guide Book for vehicle values on our trade-in route.
Product of research
Kelley Blue Book values are derived from vast amounts of data, including actual sales transactions and auction prices, which are analyzed and adjusted to account for seasonal and market trends. Because the car market has significant regional variations, they are also adapted to local conditions in over 100 different regions and are updated weekly to provide consumers with up-to-date information on used car prices. To obtain all the necessary data, KBB uses several key data sources, including wholesale auctions, independent dealers, franchise dealers, and private transactions. It has traditionally relied heavily on wholesale auctions as they reflect information from key sources including consumers, retailers, financial institutions, rental fleets and leasing companies.
The result of the process
Kelley Blue Book used car values are not accurate and KBB does not claim to be accurate to the penny. He acknowledges that it is a "guide" and that the values he has published are estimates. But these are not random sampling, they are estimates based on a well-established process, vast amounts of data and generations of expertise in determining and, in a sense, determining the value of vehicles. Kelley Blue Book calls it its "own editorial process." An important thing to remember is that used car values don't have to be dollar-perfect to be useful to any entity that needs pricing information. Instead, they just need to be close enough to give the buyer and seller a common understanding of the constraints of the transaction.
As former Kelley Blue Book president Paul Johnson once said, "One thing we know about the value of a used car is that it will be 'wrong', but any value will be close enough to value.
the 'right' value that will facilitate the transaction."
The process starts with a thorough analysis of all collected data and is informed and enriched by historical trends, current economic conditions, industry development,
seasonality and location.
The values that emerge from the process, in KBB's words, “reflect the latest view of the changing market and are therefore endorsed by several leading
organizations as well as the average consumer."
The overarching goal is to provide a credible guide in an ever-changing buying and selling environment where thousands of transactions take place every day.
Main criteria for evaluating used cars
Massive amounts of data are used to create the values quoted by Kelley Blue Book. First, there is market demand. Depending on the area in which the vehicle is sold, the relative demand
has a major impact on its value. An individual used car sold in New York may have a different value -- or a different price -- than the same used car sold in Iowa. Another criterion is the condition of the vehicle. For any used car, the wear and tear it has undergone has a major impact on its value. Estimating wear and tear is often a matter of personal opinion, hence used car values can only be used as a guideline.
Another criterion is the equipment level of the individual car. A car without accessories and the same car model with a full range of high-tech and comfort features will have two different values. Finally, there's mileage, which is a proxy for how worn out the vehicle is and how close it is to the end of its life.
Used cars have a lot of value
If you ask, "How much is a particular used car worth?" you might think the answer would be a simple number - say,10.000 dollar. But in reality, every used car doesmultiplevalues. For example, if a used car is sold to a private individual - a private individual - the seller can usually expect more money for it than if the car was sold or traded in at a dealership. Why? Private buyers do not intend to resell the cars they buy, so they can afford to pay more for the vehicle than a used car dealer. A used car dealer must buy at a low enough price that the company can make a profit when it sells the car to the consumer after it has been prepared (at a certain price) for sale. Due to factors like this, every used car has "trade in value, "private value" and "retail value".
Values of individual used cars
The trade-in value of the Kelley Blue Book used car is the amount a consumer can expect from a dealer if he or she trades it in as part of a purchase or lease transaction
another vehicle. Note that this assumes an accurate valuation of the vehicle. It is also important to note that the trade-in value is often lower than what you would get if you sold the car privately, and can be higher than if it were sold directly to a dealer.
The Kelley Blue Book Used Car Private Party value is what a consumer can expect to pay when purchasing a used car from another consumer. As with all Kelly Blue Book values, private entertainment
value is a guideline. It can change depending on several factors. For example, if the vehicle comes with a warranty, the value is likely to be higher than the general private party value because only the warranty coverage adds value.
The certified value of a used vehicle is also usually higher than the value of a private individual. It includes the fact that the vehicle is offered with a warranty and not as is, as a typical used vehicle is sold. Because warranty coverage provides peace of mind that customers are willing to pay extra for,”CPOvalue" reflects this. Of course, no seller offers certified used cars, so the CPO value takes into account the dealer's profit, advertising costs, sales commissions, and other costs of doing business.
Finally, the Kelley Blue Book Used-Car Pricing Guide can serve as a good barometer for buying and selling vehicles. When used in conjunction with other price research i
common sense at the time of purchase can help you ensure that the price you pay or receive reflects current market conditions.
“The purpose of any used car price guide should be to reflect current market conditions,” said Charles. "In some cases it can even predict market prices, but at the very least it should tell you what is right and fair at the moment."