KBB Has Been around Since Before WWII
Kelley Blue Book provides needed information on car pricing to both the banking and insurance industries. Since before World War II, they have set the standards used for car loans and replacement values.
How does Kelley Blue Book determine the value of a car?
In order to determine the value of a car, data is drawn from a number of sources.
- Wholesale Auctions
- Independent Dealers
- Franchised Dealers
- Rental Agencies
- Car Manufacturers
- Financial Institutions
- Private Party Transactions
Based on the data, they then determine the highest possible “cash value” of a given vehicle based on its condition, age, and mileage.
What values can you get through Kelley Blue Book?
The Blue Book pricing information may seem a bit confusing if you don’t understand what you are looking at. For each vehicle, there are several price points presented.
Private Party Value
The Private Party Value is the typical price that you will pay when purchasing that car from an individual. It takes into account the manufacturing year, mileage, and overall condition of the car.
Your Trade-In Value is the average amount given by car dealers when you “sell” them your car and purchase another. Many times the actual value will be different depending on demand and dealer promotions.
Suggested Retail Value
This price point gives buyers an dealers a starting point for negotiations. It is representative of what others have paid for that type of vehicle. Options, mechanical upgrades, and dealer promotions may cause this figure to be high or low.
Certified Pre-Owned Value
Cars that are “certified pre-owned” have undergone more extensive checks than your typical used car. They often come with proof of maintenance and damage records. This Blue Book value is the starting point for negotiation for this type of vehicle.
Fair Purchase Price
This figure varies based on market fluctuations. It may be higher or lower than the other Blue Book values because it is not calculated on a formula. Instead, it takes all factors, including demand into account.