OT: blue book value vs. reality for car

[jruhlen1980]

tl;dr version: how accurate are book values for used cars?

Full version:

Just for kicks I was looking at some used cars online and playing around with car payment calculators; I plugged in details on my wife's car to come up with a reasonable figure for what we could sell it for.

The Kelley Blue Book suggested individual re-sale value was about $3000, which seems reasonable. But when I compared it to actual prices available for that same model online, either from individuals or dealers, the asking price was consistently higher -- and frequently those cars had much higher mileage.

Some were in the ballpark, but they were still several hundred dollars higher, which I guess allowing room for haggling, makes sense. But some were several thousand dollars more expensive.

Granted, I understand that "what people are asking" is different than "what people actually pay" but it just has me curious -- how accurate are the suggested book values on vehicles?

My own personal experience, whether we're talking about cars or literally any other item that a person buys with money, is that I always pay too much and sell for too little. I don't think I have ever, one single time, been able to sell something for what I reasonably believe it is worth.

Anyone with more experience care to chime in?

[shovelhd]

Define "accurate" in an open market.

The price is what someone is willing to pay. I've found that the floor tends to be driven by the auctions. These prices vary one week to the next, but references like the Black Book track them over time so you get an average.

[Benneke]

The value of a car depends on where you are located. Generally, cars are worth substantially more on the west coast than they are in the northeast/midwest, and the difference can be very substantial. Its very common for used cars, particularly Japanese cars, to sell for well over their blue book value in the west.

[malcolm]

Like everything else depends on the specific model. Old land cruisers often fetch more than blue book way more. If it's a popular model it's valuable.

[veloduffer]

Besides model and geographic factors (e.g. Subarus in New England), the condition and maintenance of the car are important. If you have all the records of repairs and maintenance, a buyer may pay more for peace of mind.

[jlyon]

I have noticed that cars priced appropriately sell fairly quickly and are removed from sights and those overpriced languish online for months.

I think everyone who advertises recognizes they will sell for something less.

I have found the online ones KBB accurate but when it comes to older cars can be off on the low side especially if you have all the maintenance receipts.

Post made model year and miles and I bet a few of us will let you know what we think it is worth.

This forum has a lot of bright people.

[ftf]

Buying and selling cars isn't rocket science, and getting a good deal can be time consuming, both buying and selling. Not always though.


I don't think I've ever paid too much, and have sold, particularly motorcycles for the same I paid for them years later.

The reality is though how much time do you want to spend haggling and dealing? Sounds like not much.

[Ken Robb]

Car-Max will give you a written offer that is good for a week. That will establish a bottom price and give you 6 days to try and do better.

[JAllen]

About 10 years ago, I sold a '93 VW Jetta III for $2500. It was valued at around $1750 on KBB. I bought it a year or two prior for $600. Haven't had luck like that since.

Sent from my LGMS330 using Tapatalk

[grawk]

In august I bought an Audi A3 for $13999, and sold it today for $20,966...thanks EPA.

[pbarry]

Check your local CL for comparable vehicles, especially by-owner listings. This gives a decent indication of what similar cars go for in your area. Edmunds is another site that has a car appraisal tool. It seems more accurate to me than KBB.

[rounder]

I bought a car for my wife about a month ago. It was used and had 2,0000 miles on it. She did not need a new car but it seemed like a good deal.

I looked up the Blue Book value of our trade-in car based on miles and condition and it said $5,000.

The car store offered to go down in price by $1,000 and give us and extra $1,000 over the blue book value. I think that was partly related to the fact that we had done business with them before.

The lesson for me was that Blue Book means something, but that it is just an indicator, not the end of the process.

[jlyon]

And the true value is almost always higher than trade in value since then the dealer resells it for a profit.

Private party value is much closer to true value.

Originally Posted by rounder

I bought a car for my wife about a month ago. It was used and had 2,0000 miles on it. She did not need a new car but it seemed like a good deal.

I looked up the Blue Book value of our trade-in car based on miles and condition and it said $5,000.

The car store offered to go down in price by $1,000 and give us and extra $1,000 over the blue book value. I think that was partly related to the fact that we had done business with them before.

The lesson for me was that Blue Book means something, but that it is just an indicator, not the end of the process.

[Ralph]

I don't figure a dealership is ever going to give you more for your used car than what he can buy a used car, just like it, at an auction. You may think he is....but he isn't.....he's just taking the extra offer from his "markup" or profit.

Retail on used car just means auction price plus markup....most times a huge markup.....enough so he can make you think he is giving you a good deal on a trade in.

Private party is probably a better indicator of what you can get one for from an individual....or sell one yourself. I don't figure you ever beat a used car dealership in a transaction.

[carpediemracing]

Originally Posted by rounder

I bought a car for my wife about a month ago. It was used and had 2,0000 miles on it. She did not need a new car but it seemed like a good deal.

I looked up the Blue Book value of our trade-in car based on miles and condition and it said $5,000.

The car store offered to go down in price by $1,000 and give us and extra $1,000 over the blue book value. I think that was partly related to the fact that we had done business with them before.

The lesson for me was that Blue Book means something, but that it is just an indicator, not the end of the process.

In your case the book was used to make you feel better about your purchase. I assure you the dealer had way over $2k extra in the car.

I am pretty trusting when it comes to people telling me stuff, including my bosses. The most profitable car I ever sold was not a $110k out the door car, it was a $13k out the door car. I was told we had about $1500 in the car, meaning a margin of $1500. The couple asking about the car were limited in finances so I went and asked for $1250 off the car. The manager asked the service director to see if "he could help out" with the car and keep the costs down. The service director nodded seriously, I totally bought the act, and I went and sold the car.

After the car left another sales guy came over and noted "that was a good car". I agreed - I liked it so much I considered buying it for myself. "No, I mean, that's a good car." "No, I had maybe $250 left in it." "Just check the sheet when it comes out" (the sheet that has original cost, repair costs, and net margin.

I think the dealer made like $5k on that $13k car. I was expecting to get maybe $175 (our flat fee), instead I got close to $1000 for various things.

On the full margin $110k car I sold I think I made $750 or so.