Blue Book Value Too Low?
Last Updated on Saturday, 28 May 2011 00:43 Written by Otto Friday, 27 May 2011 22:23
The first thing to remember about the Blue Book value of a car is that it is only a guide. Any used car salesman will tell you that a vehicle’s true value is the amount someone is willing to pay and not necessarily what is printing in a book.
The Kelly Blue Book is designed to give car dealers and car owners an estimated value. However, what most people don’t realize is that car dealers have a unique way of looking at the Blue Book value and appraising a trade in.
To begin with, car dealers use a different on-line Kelly Blue Book than the customer. If you search on-line for “Kelly Blue Book”, you will be directed to www.KBB.com.
This is the consumer or public version of the Kelly Blue Book. It will allow you assess the condition of the vehicle as Excellent, Good or Poor. It will also give you an estimated value based on your region.
KBB.com (the public version) is a great source for pricing your car on Craigslist.org or for private party sale. This public version of Kelly Blue Book generates it revenue from on-line advertising.
Car dealers use a different on-line resource offered by Kelly Blue Book. It can be found at Karpower.com. This website is used by car dealers to appraise trade-ins, print window stickers and manage their used car inventory. The values that are generated by Karpower.com are really what the dealer’s use to estimate the value of the used cars and you have to be a member of the site to access this information.
When you look at used car values on www.Karpower.com versus www.KBB.com you can see some differences. For Example, when I use KBB.com to find the trade-in value of a 2006 Acura MDX with 40,000 miles, the website published a value of $18,275 in “good” condition.
When I used Karpower.com I get a value of $17650 plus a mileage adjustment of $2575 resulting in a value of $20255.
This initially sounds good for the customer. However, how car dealers actually appraise the value is completely different. First of all, the car dealer will never add for the mileage adjustment. This means the value has now declined to $ 17650.
Next, the used car manager will deduct for reconditioning costs. Most car dealerships will perform some sort of safety check. This means they will spend a minimum of $500 to inspect the car for safety issues. They will check for items that will need to be repaired or replaced, such as, tires, brakes and windshield damage. Now the $17650 value has diminished to $17150 and will decline further based on what repairs are needed.
What does this mean to the consumer? Let me go back to my opening statement that a car’s true value is what someone is willing to pay. Dealers will pay more for your trade in regardless of the blue book value if you negotiate with them in an educated fashion and understand their system in which they operate. It is good to review how to prepare your next vehicle purchase. You can check out our Car Buying Research chapter in our Car Buying Guide.
