How Accurate is KBB Used Car Sales Price?
As humans, we are always scared when making big decisions. A car can cost about $30,000 in this economy, so car buying can be one of the most important decisions to make in a person’s life. Thus being unsure and nervous is expected. These days, just as the demand for used cars has increased, there are a lot of websites that cater to customers looking to buy used cars. KBB is one of them. But have you ever wondered how accurate the KBB used car prices are?
Buying a used car has become easy because of the vast resources easily found on the internet. If you are thinking of buying a used car and are not sure if the price quoted by your local dealer is fair or not, you can just search on KBB, also known as Kelley Blue Book. KBB can show an estimation of the fair price of cars in different conditions. But the question remains: is the price actually accurate?
What is Kelley Blue Book?
First, let us get acquainted with the Kelley Blue Book, which has become a phenomenon over the years. Anyone who has bought or sold a used car in the United States of America has heard the name. Kelley Blue Book, KBB in short, is a third-party website that works as a platform where buyers and sellers of used cars can meet. Here, you can list your own car that you want to sell at a price offered by KBB. Or, you can buy a car from the huge inventory displayed on the website.
KBB was first started in 1926 when it was actually a blue book! Created by Les Kelley, this worked as a diary of sorts that kept track of all the cars that he wanted to either buy or sell. Later, as Kelley’s empire grew, KBB was given the form of a website that was reachable by everyone. Currently, KBB has a monthly visitor rate of 30 million and has become the main source for any and all information regarding buying and selling cars.
How Do We Use Kelley Blue Book?
As users, KBB is like an unending pit of treasures. With the huge array of buyers and sellers, along with the vast inventory of all types of vehicles, it is the only place where everyone can get a quote. KBB works as both buyer and seller of used cars.
- Sell your car: If you want to sell a car on KBB, all you have to do is fill up a form ad list the car’s condition, VIN, features, mileage, and make. Then they will ask to appraise the car, and then they will quote a price for the car according to the car’s current market value.
- Buy a car: A lot of car buyers like to buy cars from KBB. The cars are displayed along with the price, and if you like a car, KBB will connect you to a seller with whom you can finalize the details. There is also the chance of negotiating the price.
- Learn a car’s worth: KBB uses huge data banks and calculates the price of a car thoroughly. So many people get on this website to check the price of different cars. They also used the price as a reference to understand the current market state.
How Does KBB Determine Car Pricing?
Kelley Blue Book price uses various sources to collect data in a way so that they can be analyzed and calculated to estimate the value of each car. The value of used cars can be very vague. KBB’s car condition definitions include many aspects, such as type of vehicle, condition, age, mileage, and demand. Based on the real-time market situation, historical data, industry developments, the economic state of an area, and the location of the vehicle.
There are a few basic ways that are commonly used by KBB to measure the price of a used car. All these different sides of pricing are included in the data bank from both the past and the present to calculate car values.
- Suggested Retail Price: This is the price that is normally asked by most dealers for the same car that adds profit to the wholesale pricing.
- Trade-in value: It refers to the amount you would get in the case of your returning a car in exchange for another one.
- Private party value: This is the price that no one fixes. It is the amount the buyer is willing to pay to private sellers in exchange for a car.
- Certified Pre-owned (CPO) value: This indicates the worth of a car offered by a CPO program.
How Accurate are the KBB Used Car Prices?
Even though KBB is one of the most popular sites that provide information on the prices of used cars that are quite reliable, it is not always the case. People are using the benefits of Kelley Blue Book data to their satisfaction, but some critics have found reasons to doubt the values attached to cars on the KBB website.
- Popularity is Perceived as Accuracy: The main problem the critiques have about KBB is that the idea that Kelley Blue Book prices are reliable has spread around so much that people take the amount as gospel. The popularity of KBB motivates people to blindly trust the prices without double-checking.
- Not Always Realistic: The price written on the KBB website are often unrealistic. Sometimes the analyzed results are old and have no relation to the current economy, making customers deeply confused.
- More a Business Than a Service: As KBB is a site that earns money through ads and subscriptions, it has become highly profit-oriented over the years. This hampers the fairness of the process.
- Inexperienced Quality Appraiser: KBB arranges appraisals of the cars before putting them up on the website. But these days, the lack of professionals has created disappointments among the regulars.
Reasons Why the Accuracy is Hampered
From the above discussion, it is obvious that there are some problems in the whole process conducted by KBB. As there is no concrete scientific way of making sure what a specific used car is worth, the price offered by KBB might seem too much to someone, whereas the same price may seem low to another customer.
As KBB uses a vast amount of data to analyze and calculate the possible price of a car, it is often the case that the data used is too old. With sudden shifts in the economy, fixing the randomness issue becomes difficult. Thus, sometimes the KBB price might not portray the actual worth of the car.
Huge Variety in Data
The data used come from all over the place from various sources. All the sources used might not be accurate. Rentals, local shops, auctions, junkyards, and private sellers often have the tendency to exaggerate and hide the real data.
Because of the high popularity of Kelley Blue Book, people have created a huge reputation for it. This is the best in the market, so whatever price is offered by KBB, people tend to be too trusting.
What Can You Do As a Precaution?
Trusting anything blindly can never go well. So no matter how much the reputation builds itself up, we need to double-check the prices offered by KBB before buying a car. Even if you are trying to sell your old car, it is good to check with multiple different sites, including KBB, to make sure that the worth is portrayed similarly by each of them. There are a few very well-known platforms that can be kept in mind:
- National Automobile Dealers Association (NADA)
- Consumer Reports
- J. D. Power
All these platforms use similar methods to make the necessary calculations. So the price shown for similar cars should not be too far apart. That way, you can be sure of which platforms can be trusted.
Kelley Blue Book pricing is not the most accurate as they don’t buy vehicles themselves. It has been a huge help to people who do not have the basic knowledge about used cars and car buying or selling. With each situation, the price can vary for even the smallest of details. So Kelley Blue Book works as a knowledgeable guide to make sure what a car of a certain condition is worth. The price estimation and purchase facilities easily make KBB the most popular third-party car-selling party. After making some research on the website, we can even find the perfect car we want to buy.
KBB prices might not be absolutely accurate all the time, but there is a chance for you to negotiate the price. They know that used car prices depend on the amount a customer is ready to pay. So these numbers are waiting to be challenged. Just make sure to do your research on other platforms and browse other online and local sellers to get an idea of the car’s price first. Then you can bargain on your can of choice that you have chosen from the Kelley Blue Book website.