Is Kelley Blue Book Reliable?
When buying or selling a car, a large percentage of the population relies heavily on Kelley Blue Book in order to determine the value of their vehicle. It has been a resource for consumers for nearly one hundred years. Despite its’ credentials, is it still a reliable source of information? The following are compelling reasons as to why you should take the information with a grain of salt.
We, as humans, tend to get emotionally attached to our possessions. This can easily happen with our vehicles. People often look up the trade- in value or resale value of their car and feel it’s a low number. It’s easy to assume our car is better than all of the other 2010, four door sedans. It could very well be; however, Kelley Blue Book has no way of knowing that. Accepting the ‘average’ sale price associated with your car could easily be a mistake if your vehicle is worth more than the KBB number. Human error as well as pricing errors can leave consumers feeling frustrated and losing trust in this resource.
The people who work at creating Kelley Blue Book spend a lot of time collecting data on pricing in order to make this resource a reality. An article written by Jim Probasco for investopedia.com explains this further by saying, “Kelley’s proprietary algorithm analyzes pricing data along with historical trends, current economic conditions, industry developments, time of year, and location to determine Kelley Blue Book values. That process results in the following values for used cars: Private party value– How much you will have to shell out for a specific used car from a private seller, trade-in value– The amount you are likely to get from a dealer for a trade-in, suggested retail value–What dealers are typically asking for a specific used car, and certified pre-owned (CPO) value– How much cars covered by the CPO program are worth.” Gathering this information and getting it out to the public in a timely manner is the ultimate goal, however, sometimes the information is already outdated by the time it gets to KBB. This can result in inaccurate pricing suggestions.
The number you find online for the value of your car is going to be different than anything a dealership is going to offer you. The above mentioned investopedia.com article also states, “Most dealers do not use KBB for trade-in (wholesale) values. Instead, many rely on National Auto Research’s Black Book or the Manheim Market Report, neither of which is available to the public. More important, both tend to skew lower than KBB in wholesale pricing.”
You cannot rely on KBB to be accurate 100% of the time. You should feel free to consult resources like KBB in order to figure out pricing; however, it should not be the only source you use. Gather multiple numbers from different sites in order to get the most accurate information possible.