Kelly Blue Book Values Explained and How You Should Use Them

By: Sarah E. Sanuth, is an insider in the automotive industry  with many years of experience in the car dealership and repair business

When selling or shopping for a car, most people turn to Kelly Blue Book for new and used car pricing information. It has come to be known as the “tell all” and is almost always the first stop for car buyers and sellers alike. But many people and industries turn to this book not knowing where they get their information, or what it means.

Kelley Blue Book bases its used car pricing reports on a compilation of information, some of which is based on asking price, not selling price; but most of the information is not available or can’t be tracked by the company.

KBB Trade-In (wholesale) Value:

This information is based solely on what a dealer is willing to pay for a vehicle. It is a compilation of sales data from dealer-only auto auctions. However, not all auctions report this information, so it can be off greatly. For example, at the largest dealer-only auction in New England, a 2002 Toyota 4 Runner with 76,000 miles in excellent condition sold for $5,000, KBB.com says it is worth $6,600 trade-in (wholesale.) Fleet, rental and repossessed vehicles will also sell for a lot less than what KBB is reporting as “trade-in” value. At these auctions, optional equipment isn’t given much weight, or even tracked.

If you are trading your vehicle in, the pricing provided by KBB.com should be used as a highest best case scenario as the numbers that KBB provides are more often than not much higher than the actual trade-in or wholesale value. However, the value you receive should not be off by more than $2,000.

KBB Retail Value:

For KBB, there really isn’t a way for them to track the selling price of used vehicles. The only information that they have available is the asking price that anyone else can find on the internet. They do get some “actual selling” price information from some used car dealers, but the percentage is very small compared to how many used car dealers there are out there. They base their retail value on new car prices and take into consideration the market, depreciation, the cost to repair the vehicle and dealer overhead.

When purchasing a vehicle at retail from a dealer, the price you would expect to pay should be no less than the Private Party value and no more than $2,000 above Retail Value. This is due to the fact that KBB.com isn’t going by “real” numbers, but rather estimate based on their complex equation. Some dealers may have to put more work into the vehicle to get it up to standard than what KBB.com estimates into their equation.

KBB Private Party Value:

There is no way to track private party sales at all. This again is based on the same method for retail value without the overhead, repairs and profit margin considered.

If you are going to purchase a vehicle Private Party, the actual price you can expect to pay will vary greatly depending on the actual condition of the vehicle, as private party sellers are not required to repair the vehicle to standards set by law. The least that you should pay for a vehicle at private party is the trade-in value and the most should be retail. There will be some vehicles that will be purchased at private party that are in much better condition than some that are being sold at dealerships, therefore you should expect to pay close to retail for this vehicle, but never more than retail.

Which KBB Value to Use When Selling Your Vehicle:

If you are trying to sell a vehicle, you need to do an honest assessment of the vehicles condition. Don’t just assume that you are private party and that is your price, because that can work for or against you. If you know your vehicle needs a lot of work and would not pass a safety inspection, you should start at the fair condition private party value. On the other hand, if you have given your vehicle its oil changes, tune-ups and had maintenance performed religiously, and it would definitely pass a safety inspection, your starting “asking price” should be close to full retail.

Things such as the market, supply and demand, and regional differences are considered in the equation for all values as well, but take time to reflect in their pricing reports. For example, where gas prices were just at an all-time high, smaller cars were in much higher demand, therefore the prices were higher because of the market. In this instance, the SUV values were decreased. When things like this are taking place, you should adjust what you will expect to pay for this vehicle as KBB.com has not “caught up” with the market yet.

Much of the information provided by Kelley Blue Book is based on their experience and the information they have compiled years past. Fortunate for them, they have almost 100 years of experience in the automobile appraisal business. But these numbers are not etched in stone. These numbers are merely a starting point, or an estimate and nothing more. Just keep in mind to check the asking price of a vehicle at multiple dealerships in your area to ensure that the Blue Book accurately depicts actual values, before using it as guidance, as the market changes constantly. Also check the asking price of used cars listed for sale on various websites like cars.com, autotrader or car search engine sites like iSeeCars.com.

If you have a question you’d like our experts and community to answer, please ask your question at  http://forum.iseecars.com.  To start your used car search, visit http://www.iSeeCars.com  

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Tags: kbb, kbb.com, kelley blue book, kelly blue book, used car prices

This entry was posted on Wednesday, December 24th, 2008 at and is filed under Tips on Buying a Used Car, Tips on Pricing. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.