Kelley Blue Book and Edmunds; How to Use Both To Your Advantage When Negotiating the Price of a Used Car!

By Maureen Condon

Edmunds.com True Market Value online

Photo Credit: Maureen Condon

Two of those reference points are the Kelley Blue Book Suggested Retail Value and the Edmunds.com True Market Value.

They represent two totally different points of view and it’s important to understand those differences.

The "Kelley Blue Book" value is an estimate by Kelley of the "listing" prices being asked by dealers — not what they are actually getting for the car.

Kelley’s numbers are "suggested retail values." The actual selling price may vary substantially. In many cases, it may be substantially lower than the asking price.

The version of the Kelley Blue Book that Kelley offers to consumers states:

Retail Values represent what a dealer may ask for the vehicle once it has been inspected, reconditioned and possibly warranted.

In contrast, the Edmunds.com True Market Value is Edmunds’ estimated average selling price for the car. It’s what dealers in your region of the country are actually selling the car to consumers for. It represents the negotiated average price for the vehicle. It’s a better reference point to use when you are negotiating a price for the vehicle you want, than the Kelley Blue Book Suggested Retail Value.

As stated on the Edmunds.com web site:

“Edmunds.com's staff of statisticians, researchers, programmers, and pricing managers spent over a year developing TMV pricing for used vehicles and work continuously to refine and improve it.

“The process begins with raw transaction data: millions of records of actual used car sales for thousands of makes, models and styles, in all regions of the country and in all colors, updated on a regular basis. This data is sorted, cleaned, analyzed, and processed, and becomes the basis of TMV used vehicle pricing.

“Second, our (Edmunds’) staff developed a complex and proprietary set of rules that permit us to determine, based on this underlying database, the following TMV prices for the vehicle you specify: dealer trade-in (the estimated average price consumers are getting from dealers for their trade-ins), dealer retail (the estimated average price consumers are currently paying dealers for used vehicles), and private party (the estimated average price consumers are paying each other in private party transactions). These rules take into account such factors as the vehicle's original price when new, its estimated depreciation rate, the color of the vehicle, which of five regions of the country the vehicle is located in, and the vehicle's mileage, condition, and options. The result is a highly customized value for the vehicle you are researching given the current conditions in your local market.”

One thing that struck this reviewer about pricing parameters was how the color of a used car might affect its price. For instance, in the Sunbelt states, a black car, that draws the heat of the sun, is less valued than the same car with a lighter shade of paint.

If you look online for both The Kelley Blue Book Suggested Retail Value and the Edmunds.com True Market Value for the used car you are targeting, before you start shopping, you’ll have a much better sense of when you are making a really good deal for your next used car purchase.

For more information, and for a definition of terms, visit:

http://www.edmunds.com/advice/buying/articles/49241/article.html

To check online to see what the Edmunds.com True Market Value of the used car you want to buy is, visit:

http://www.edmunds.com/tmv/index.html

To check online to see what the Kelley Blue Book Suggested Retail Price of the used car you want to buy is, visit:

http://www.kbb.com/used-cars