1. Nada Used Car Prices, Edmunds Used Car Prices, And Kelly Blue Book Used Car
Prices – Whose Prices Are Right?
The Internet has been touted as the greatest resource for the used car buyer.
Prospective buyers can find trade-in, private party, and retail values in a heartbeat.
The question to consider, however, is what Internet source is right? The three major
sites: NADA, Edmunds, and Kelly Blue Book are clamoring to be the Trusted
Authority on used car values. Yet price discrepancies are frequently in the $1000’s
from site to site. Which web site, if any, is the most accurate source for the used car
buyer?
To illustrate the discrepancies, here’s an everyday example: NADA may retail a 2003
SAAB 9-5 Linear at $15,996, Kelly Blue Book prices it at $17,456, and Edmunds
prices it at $14,800. These are all retail values, assuming excellent or clean condition.
$17,456 minus $14,800 is a $2,656 difference. That’s a huge price difference in the
highly competitive used car market.
The retail values placed on many vehicles by these web sites can have even larger
price differences - some as high as $4000 to $8000 dollars. These gigantic price
fluctuations can leave a used car buyer spending $1000’s extra, depending on which
guide he or she used. Moreover, private party and trade-in sale prices do not
accurately account for vehicle condition, and less than 5% qualify as excellent.
Vehicle condition is a critical variable. An owner might think his trade-in is in
stunning condition and thus worth X, based on his Internet research. An expert may
know it needs $1000’s in repairs and reconditioning costs.
The answer to “whose prices are right” is that none of the big three web sites reflect
used car prices accurately. Most often, the prices are too high on the retail side,
questionable on the trade-in side, and confusing on the private side.
So what or who is the real authority? The answer is the Market! The market (i.e., the
folks grinding it out everyday in the used car market place – sellers and buyers)
reflect true market value. Web sites are guides only. The used car prices from these
sources need to be measured against the reality of the market.
Here’s a scenario to illustrate the importance the market plays on used car values. In
the Northeast, the banks rely on NADA, used car dealers prefer to use Kelly Blue
Book, and used car buyers are turning more and more to Edmunds. Now the dealer
will likely want to use the inflated (Excellent condition) Kelly Blue Book value. The
buyer wants an unrealistic Edmunds price, and the bank wants to use an under-valued
NADA price. In other words, the three primary people in the car buying process – the
buyer, the seller, and the lender, are all on different pages. Each player wants the most
advantageous price based on the part he or she is playing. The market is the only
element that evens the playing field. The point here is to demonstrate that the market
is the true source to determine a REAL and FAIR used car value.
In order to get a fair price, according to the market, a used car buyer should aim for
the middle. Avoid the highest prices and be realistic and flexible about the lowest.
Stay somewhere in the middle to get a fair deal.
If you want a great deal, follow the market closely. If buying from a retailer, eBay and
auction prices don’t count, as these are wholesale venues. Check out Cars.com,
AutoTrader.com, and some of the other Used Car Sources. See what the vehicle you
want (including miles, equipment and accessories) is being advertised for. Again,
shoot for the middle!

2. Use the popular Internet resources, but don’t follow them blindly. You may actually
pay significantly more than market value.

3. Use the popular Internet resources, but don’t follow them blindly. You may actually
pay significantly more than market value.
Having said all this, this doesn’t mean that used car dealers are going to stop trying to
low ball trade-in offers. And of course every dealer wants to sell its vehicles for a
maximum. But remember, the same goes for car owners, but in reverse. They want
the highest price for a trade and the lowest retail price on a vehicle.
When using Internet sources to determine a used car value, be sure to enter the correct
information. This may sound elementary, but option packages, models, miles, color,
equipment, engine, transmission, gear ratios…etc, can be confusing. Yet these are
important variables that will affect prices dramatically. In short, the wrong
information skews the numbers.
Finally, what really needs to be highlighted with NADA, Edmunds, and Kelly, as well
as other Internet sources, is that they are GUIDES. They are excellent resources for
vehicle information, but weak resources for prices. This is not to bad mouth any of
these sites – they are great starting points. Remember, however, that these guides may
or may not be in the car buyer’s favor. Fair used cars prices are dictated by the
market. Yes, do your research on the Net, but don’t cling to it. Use the Internet only to
find the used car market’s middle ground.
Ottawa used cars