Why is there such a difference between Kelly Blue Book and NADA trade in values?

Question

I am in the process of trading in my 2004 car on a a new truck and in doing my research am finding the NADA trade-in value is over $2000 higher than the Kelly Blue Book value; for the same car! Of course, the dealer presented me with a deal reflecting the Kelly value, and I of course countered with the NADA value...

So, which value should I deem realistic and why such a huge difference?

Ah, the pleasantries of buying a car...

Answer 1

most dealerships use Kelly blue book...not because they are trying to gouge you, but because it is a more accurate value of what the car is really going for. They also look at what the car is going for at auction... They are not a not for profit organization obviously... NADA tends to be way to high on trade in value they are also comparing that trade in price to paying sticker.They also do not give accurate invoice prices for the new vehicles. Remember if you want to pay the dealership wholesale for their car then that is what you should expect to receive for your trade in. If you want to receive NADA for your car you should pay sticker because your discount is received in your trade in value...
Sincerely,
Honest car sales person

Answer 2

Acutally, most dealers I know use their own experience and AUCTION information to determine the best trade-in price for a vehicle. But that wasn't your question, was it.

Between NADA and KBB, the differences vary from month to month. Sometimes KBB is higher, sometimes NADA is higher. I think KBB takes more into consideration than NADA does. It gives the opportunity to rate the vehicles condition, and additional options that NADA does not allow for.

Being in the car business, however, we also remind customers that both of these services provided are GUIDES as to what a vehicle may be worth when trading it in. No dealer is going to open up their NADA book and give you dollar for dollar what it says. They may give you less, they may give you more. Here are some scenarios:

Vehicle have around 50,000 miles on it? Unless you can PROVE that you just had the brakes done (rotors, pads, calipars) we deduct $500 for a brake job that we will have to do before we sell it.

Some scratches in the paint? If, when you rub your fingernail across the scratch you don't feel it...it can be buffed out by the detail department. If there are A LOT of those kinds of scraches, expect another $300 - $500 in buffing. If your fingernail can feel the scratch, then the panel will have to be sanded down and repainted. Then you're talking a $200 - $500 per body panel.

Does the air conditioning blow COLD? If not it will have to be FIXED, not recharged...FIXED. That could cost anywhere from $200 - $1,200.

How's the interior? Does it smell of smoke? Dog hair? Stains in the carpt? Are there all 4 floormats? All this stuff will have to be fixed or dealt with by the dealer before its put on the lot "for sale" (Detailing costs over $100 usually. Factory floormats cost $75-ish) (If there is a stink that the carpet shampoo doesn't get rid of they have to use special cleaners that also cost more money)

What about the tires? Are they in good shape or worn? Would YOU buy a car with tires that on it? If you wouldn't, then the dealer will probably have to replace those, too. Expect $300 - $1000 (depending on the kind of tire)

How 'bout the exhaust? A little loud? Budget another $150 or more to fix that.

Anything else?.....Glass, bulbs, the radio, etc.

So, that 2004 vehicle that NADA gives you $8,455 trade in value for. Start deducting...what's wrong with it. If NOTHING AT ALL is wrong with it, then you might have a chance of getting what NADA is calling it for.

But, if you expect the dealer to give you what NADA or KBB says your trade is worth, also expect to pay what they say the new vehicle's MSRP is.

And after ALL THAT remember that what is happening in the market supercedes all that the GUIDES have to say. For expample: In my kneck of the woods a 2-wheel drive truck is useless. NADA may say that it books for big money...but even if I take it in on trade its going to sit on the lot until its not worth what we have in it..... So, to me a 2006 2-wheel drive truck is worth pretty much $0, regardless of what the guides say it is.

And if you say that the dealer should just "take it to auction" then we go back to my first paragraph that says THATS what we should go by. Because, why in any situation, would you sell something for less than what you paid for it? (Which is what consumers want car dealers to do all the time)

Answer 3

Nada Kelly Blue Book

Answer 4

It depends on the dealer. Some dealerships won't take any cars they can't put on the lot and sell as trade-ins. There's no way a dealership like that would touch your car. If they do take it they will really low ball you, so you might as well try and sell it yourself. Also, keep in mind the low end Blue Book values still assume they car is in reasonable running condition in no immediate need or repairs. If your car is hanging on by a thread or needs some serious work, you must subtract the repair costs from the Blue Book value to get an idea of what it's really worth.

Answer 5

Kelly is when you are selling the car privately or at a used car lot. NADA is when you trade in your car to a dealer ship or used car lot. So when you trade in your old car towards a new one the dealer is not going to give you what the car is worth. Instead they will give you a price that is best suited for them. Why because they want your money they are in this business to make a profit and not loose money.

Answer 6

Nada prices are obtained from actual dealer input. Its a much more realistic value.