The Internet is a wonderful place that has empowered us to make good consumer choices. Prospective car buyers, for instance, are able to find the value of a used car with great ease. The problem, however, is that there is the NADA used car value book, Edmunds, and Kelley Blue Book (KBB). All three of them say that they are the most trusted authority, but there are significant differences between the prices they list. So which one is right?
Understanding The Price Differences
The price differences between NADA used car value book, KBB and Edmunds can sometimes vary by as much as $3,000, which is a huge amount. In fact, you should be able to find even bigger differences for certain models. This shows you just why it is so important that you do proper research if you are in the market for a new car. After all, only one of the three can be right. While it may be the easiest solution to simply presume that the cheapest one is correct, since this will favor your own pocket the most, this isn't always the right thing to do.
So who's price is right? The real answer is that none of them are. As a rule of thumb, you can assume that a retail side price is too high, that a trade-in side price is questionable, and that a private side price is nothing short of confusing. Of course, none of these can help you. What you need to do instead is focus on the market. The market is comprised of those people who actually deal with the used car industry on a daily basis. These are the people who actually buy and sell cars, in other words, as these are the ones who have the real knowledge. All websites can do is give you a guide, and they each use different sources to establish their guide price.
Other factors matter as well, not in the least your geographical location. For instance, banks in the northeast of the country rely on the NADA used car value book, even though dealers will almost always use the KBB. At the same time, online statistics have shown that buyers are turning to Edmunds on a more regular basis. Dealers like KBB because the price is almost always inflated. Buyers, meanwhile, want something unrealistic, which is generally provided by Edmunds. Banks, on the other hand, want to spend as little as possible so they turn to NADA prices, which are generally undervalued.
Herein lies the real problem: three entities are involved in the process of buying a used car. There is the buyer, the seller, and the bank and none of them is signing from the same hymn sheet since they all want what is best for their personal pockets. This is why, if you want to get a real idea of what a fair price will be for a used vehicle, you should average the three different prices. In so doing, you will have a far more realistic picture.