You’ve probably heard people refer to ‘book value’ when talking about a car’s price. The ‘book’ they’re talking about is usually the Kelley Blue Book. It’s a price guide, published by an automotive research company of the same name. The Blue Book, or KBB, has been around since 1926 (which is impressive, given that there weren’t actually a lot of cars around back then).
All you have to do is enter the details (make, model, year, mileage, color, options) of the car you’re looking to buy or sell, and it’ll give you the Kelley Blue Book value—a price range to expect. It has different ranges for whether you’re planning to buy or sell privately (where you’ll typically get the best price), or buy from or trade in to a dealer.
The KBB is a great starting point when you’re trying to determine the fair market value of a car you’re selling or buying. But it’s not the final word, and definitely not the only source of car pricing information out there.
And, there’s a caveat, with Kelley Blue Book value and all the other pricing sites and tools—they may not accurately reflect the most current market trends. They’re ‘updated’ frequently (KBB is updated weekly), but it’s hard to know what, exactly, constitutes an ‘update’. The reality is that they use algorithms and averages, which may not capture big changes in the market right away.
For example, the used car market right now has shifted so extremely and quickly, as a result of the effects of the pandemic, that KBB and the others probably aren’t fully capturing this unprecedented spike in prices.
There’s also the Black Book—no, not the kind where people used to keep phone numbers of dating prospects back before smartphones. This Black Book keeps track of all the car makes and models out there, and their valuation. It’s similar to the Blue Book, except that it’s dealer-focused. It also has more detailed and paid tiers, for really detailed information that would be valuable to dealers but more than a consumer would need. It offers more consideration for future valuation of a car, as well.
In recent years, the Black Book has shifted its focus toward dealers and brokers, and they offer business-focused paid products now. So you’re likely to see Black Book car value calculation tools on some dealers’ websites.
In addition to the ‘books’ (which of course are primarily websites now), there are some other sites that serve as useful valuation references.
NADAguides is short for National Appraisal Guides, which makes us think someone over there has a thing or two to learn about acronyms. But what they do know is used car prices. NADA is powered by J.D. Power’s valuation data, and is slightly more geared toward car dealers and lenders, whereas the KBB is focused on consumer car buying and selling.
That said, the NADAguides website is quite consumer-friendly and easy to use, so it’s worth checking out the NADA used car value calculator.
Each of these sites have different details; for example, one might be missing certain optional equipment that the other one has, when you’re speccing out the details of the car you’re looking to buy or sell. And the Kelley Blue Book site asks you to specify color, whereas NADA does not.
Sites that advise you on your particular listing
Sites like TRED use the guide information from the above entities, but also use their own local market data on what particular cars have been selling for in that area—which is the very most accurate and realistic data to go by. They can then advise on what price to list your car at —and how long it will likely take to sell at various price points— so you can find the right balance between price and speed of sale.
The market has the final word
It’s very helpful to do your research and be informed when you’re trying to figure out a fair price for the car you’re buying or selling. It’s advantageous to know the Black Book, NADA, or KBB used car value. But you can’t always expect to get the price that the guides suggest.
There are always extenuating circumstances, both around buyer or seller preferences and situations. Maybe your car is an unpopular color. Or it’s missing a feature that buyers of that model typically want it to have. For example, a recent car that lacks a navigation system can be a tough sell; many buyers, especially of cars that are considered more ‘luxury’, want and expect it to have nav. Likewise, buyers of certain pickups or SUVs are generally going to be less interested if it doesn’t have four wheel drive.
On the circumstances side, maybe the guy who’s selling that white Miata you’ve got your eye on has kind of mixed feelings about selling it. He has it priced a little high, and isn’t interested in selling it for a penny under asking. But another local seller, with the same year and similar mileage Miata in red, is moving out of the country in a week, so she’s very motivated to sell. And then your preferences come into play—you like the white better than the red, but… how much is that preference worth to you?
So human factors always come into play, but overall market trends tend to be a good way to predict prices overall!