What is the most accurate way to value a used car? Kelley Blue Book and Edmunds differ in valuation by almost $1,000 for example (private party value for 94 Honda Civic in good/clean condition). Can anyone explain the difference in values or which is more accurate?
Actually, the value of a car is what someone will pay for it. The prices in these books are determined, as I understand it, from the average prices dealers allow for a trade in or what they pay for the car at auction (wholesale price) and the price the dealer gets for the car (retail price). These books are useful as a starting point in negotiating for a car, but really isn’t an exact figure for a particular car. For a 15 year-old Honda Civic, I’m not certain that either price guide has much meaning.
The problem with the "what someone will pay for it’ idea is that you don’t know if the next person to look at it would have paid more. The what someone will pay for it premise is too simplistic,you do need to set a bottom level as to the minimum you will accept.
Lots of variables including location, condition, one-owner, all service records, etc. Look at NADA as well. Also check eBay completed listings – what prices similar cars actually sold. Pricing a car, or a house, in today’s market takes a bit of creativity. Try cars.com, autotrader.com and craigslist. Keep in mind it’s a buyers market – lots of seller, not may buyers. Something is only worth what someone else will pay. Lots of used cars are going for well under wholesale or trade-in value these days.
Some of those prices are just too crazy to believe. In New England, the car is worth $2,000, California $3,000 if you are selling and less if you are buying. There can be no specific price for a car that age. It’s all dream work. Discard the Kelley book; the prices are silly.
The value to you and the value to me and the value to each other reader here is likely to be different. There is no such thing as a specific value for a used car. In fact there really is no such value for a new car.
The “True Value” is what a willing knowledgeable buyer and a willing knowledgeable seller agree on and that only applies to that specific car at that specific time.
The published values are only reports on what has happened in the market. They do not set prices, rather they just reflect them. As noted above they take their data from different sources.
The point of all this is don’t rely on any book price.
Kelly Blue Book (KBB) numbers seem too high. Edmunds are more realistic. I think KBB is catering to dealers who want to keep values and the prices they charge on the high side.
I check KBB, Edmunds, and NADA to compare their values. I also look at Auto Trader, and Cars.com to see listings of similar cars. Ebay completed listings are another good resource. Then you have to be realistic about the condition of your car. We tend to think our cars are in the best of shape and buyers are not so prejudiced. They see the car more as it really is and perhaps the condition isn’t as “Excellent” as we thing it is.
After the research set a price you think is on the high side of fair. This will allow some bargining room when buyers come to look over the car. If it can’t be taken for test drives you may have to reduce the price accordingly. Unresgistered, uninsured cars that can’t be road tested are a definate minus to me.
I prefer the edmunds prices as a starting value. If you want a good starting point, take it to a dealer and see what they will pay for it. Try CarMax if there is one near you.
The market sets the price, period. Determine the value of the car based upon your research. If your ad gets little or no attention then the price is too high. Adjust it downward and see what happens. If there is still no attention to the ad then drop it again. If you set a price and 20 people respond then the price is too low. The area you live in also determines the price. That’s just the way it is. You will never get as much for a vehicle in Appalachia as you can in Marin County, California.