Used Auto Buying: Understanding Used Auto Values
If you’ve never bought or sold a used auto before, you might be wondering how it’s possible to know if you’re getting a good auto value?
Buying a used auto can be both an exciting and intimidating time, especially if you’ve never gone through the process before. However, it is the opinion of many auto industry experts that it is a much smarter decision to buy a used auto over buying a new auto. By buying a used auto, you prevent yourself from absorbing the huge depreciation in value that occurs when you remove a brand new auto from the auto dealer’s lot. You can also typically find a good used auto at a great price.
The fact is that there are numerous companies that develop and provide used auto values, so it’s good to understand who these companies are as they can be good reference points when buying or selling a auto. Knowing auto values will help you be a fairer seller and savvier buyer. The primary auto value providers are:
Kelley Blue Book has been around for almost 90 years developing values, and they are considered the most well known and used by dealers, consumers, and finance companies. The values they provide vary based on the type of sale being considered: Trade-In, Private Party, Suggested Retail, Certified Pre-Owned. They provide values based on three types of condition levels: Excellent, Good, and Fair. What is most important to understand about KBB values is that the Suggested Retail and Certified Pre-Owned values represent what a dealer will normally be “asking” for relative to the sale, and they are not a representation of actual sales prices, so if you are buying from a dealer using a KBB value, you can usually negotiate them down.
Edmunds.com launched in 1995, and quickly picked up a reputation in the industry as being pro-consumer and anti-dealer. So, although they do provide a lot of very useful information on their site, keep in mind that most dealers will not use or accept Edmunds values. They call their values “True Market Value” and they are meant to represent the actual selling price for the following sales: Dealer Trade-In, Private Party, and Dealer Retail. The also differentiate the value based on numerous condition levels: Outstanding, Clean, Average, Rough, and Damaged.
NADAGuides is associated with the NADA (National Automobile Dealers Association) and has been online since 2000, but has been in business for many years prior. Similar to KBB, NADAGuides is widely used by dealers, finance companies, and insurance companies. Their values include: Rough Trade-In, Average Trade-In, Clean Trade-In, and Clean Retail. Since their focus is tied more to dealers, they do not provide Private Party values. Because of their dealer affiliations, you should do your diligence and compare their values to other providers.
Black Book has been around for many years as well, and although they do not readily provide their values online or to the general buying public, you may find dealers referencing them during your vehicle purchase. Since they do not openly share their values online it is difficult to use them during your research process and compare them to other providers. Thus, you should be weary of accepting a dealer’s use of Black Book values as it is difficult for the average consumer to compare to other providers.
You should work with the dealer to use one of the more publicly available auto value sources above. The more information you have, the better off you will be during the negotiation process.
Regardless of whether you are looking to sell your auto as a private party, or if you are looking to buy a used auto from a private party or dealer, you should pull the available used auto values from the different providers above and compare them.