When you're either buying or selling a used car, determining a reasonable price is a frequent stumbling block that people encounter. As a buyer, it's hard to know if the vehicle you're looking at is priced fairly. As a seller, it's challenging to determine if you're lowballing the car or pricing yourself out of the market.
The way around this problem is for buyers and sellers to have a common pricing reference. This comes from many popular publications and listings, including the Kelley Blue Book (KBB) and Black Book (BB). KBB is the "senior" of the two, founded in 1918, compared to 1955 for Black Book. Besides their age, the two have other essential distinctions that many don't realize.
Let’s dive into the differences.
What is Black Book Car Value?
Put simply, a Black Book number is a valuation of a vehicle according to the organization Black Book and based on its own data. BB is focused on providing car wholesale and auction values to dealerships. Using this information, a dealer can determine a retail price on a used car that will ensure a profit or perhaps set an appealing price that can be boosted by profit-making extras like accessories and financing.
Black Book prices are not readily available for anyone to look up. Subscribers have to sign up and pay to gain access to this data. This model differs from other popular valuation platforms like KBB, but we'll cover those distinctions later on.
The Black Book platform offers valuations and a host of other services to those working within the automotive sales industry, including trade appraisals, market research and data, depreciation trends, risk assessment, and residual forecasting. In essence, it's an indispensable tool for those in automotive sales and marketing, providing the critical figures they need to formulate vehicle sales strategies.
How is Black Book Different from Blue Book?
Despite the similar names, the Kelley Blue Book and Black Book are very different in terms of their usage and the type of provided information. Foremost, KBB is focused much more on the consumer level of the market. As we touched on in the introduction, KBB helps private buyers and sellers understand the market value of their car as a base point to formulate a fair and competitive price for their vehicle. On the other hand, Black Book focuses on retailers in the marketplace. In other words, KBB is a consumer tool rather than an industry tool.
Another difference is in how people interact with these services. For example, we mentioned in the previous section that BB data is unavailable to the average consumer unless they are signed up for the service on their platform. The subscription model costs around $65 per month or $700 annually, which would be a lot to pay for the average consumer.
KBB, on the other hand, offers a free and open online platform and previously sold a publication targeting dealerships, but that was discontinued in 2017. Users enter information about their vehicle into the platform and can get their car's trade-in and private sale value instantly.
Regarding interaction and access, KBB differs from the Black Book because users can gain offers for their cars via the platform. KBB, similarly to other consumer-oriented platforms (such as Edmunds.com), has a service through which users can get an instant offer on their vehicle after learning about their car's trade-in and private sale values. This is not something that BB offers.
This brings us to another key difference: KBB also acts as a linking platform to car listings, allowing consumers to find offers on cars they are interested in purchasing. In this sense, KBB is a starting point for consumers looking for a particular car brand or model but do not know what it should cost. After learning the basic value of their target car, a buyer can be connected to listings armed with essential market information.
Black Book, on the other hand, is a starting point for industry professionals looking to strategically set retail prices on their vehicles to generate profits and make their businesses competitive in the marketplace. BB doesn’t offer any connection to car listings, as it assumes that the industry operator already has the vehicle in stock or is about to purchase it from an owner or supplier, such as an auction house.
It should be noted that while KBB is consumer-oriented, the platform can serve as a reference for dealers, especially smaller ones unwilling to pay for Black Book’s services.
Is Black Book Better than Other Car Valuations?
Just about every major vehicle valuation platform claims to offer the most accurate data to its users, and that includes Black Book. Is it really better, though? The fact is that its data is garnered from much the same type of sources as many other platforms, including KBB. This information chiefly comes from wholesale auction results and actual vehicle transactions across the US and Canada.
Does the fact that BB data is focused on dealerships and is kept concealed from the non-paying public make it superior to KBB? The simple answer to that is no, it doesn't. It's not a minus, nor does it make the information better. It's fair to say that Black Book data are reliable and accurate, but that doesn't make it any more honest or valuable than other sources.
In addition, it's unfair to compare an industry-focused platform like Black Book against consumer-focused sources like KBB and Edmunds. Some point to the fact that the data has differences as proof that BB is more accurate. The truth is that these platforms share values with different primary audiences. It's, therefore, not correct to equate difference with any disparity in accuracy or reliability.
What About RedBook?
Without wanting to confuse anyone's understanding of the industry, there is yet another color of a book we can throw into the mix: "RedBook" vehicle valuations. RedBook is an Australian web-based platform that also covers New Zealand, Malaysia, Thailand, and China.
It is more in line with KBB in its consumer focus and offers information on cars, motorcycles, boats, and other vehicles. RedBook also provides commercial fleet services and access to information on JDM imports (a popular vehicle category in Australia).
Summing Up: Do I Need the Black Book Car Value?
As we've covered, BB car values are aimed primarily at dealerships. It would be a relatively expensive proposition to use this service as a consumer to find out the wholesale price of a specific vehicle of interest. For consumers, platforms like Edmunds and KBB are definitely the best proposition.
However, Black Book is undoubtedly an indispensable resource for those working in the automotive industry, specifically in sales and marketing. Car pricing is far more complex in the industry than when you're the consumer. From the perspective of consumers, they want to find the lowest or most reasonable price for the vehicle they're getting. For car dealerships, however, it's a different tale.
Dealerships have to compete with each other and even, to some degree, with a slew of private sellers. This means careful strategies when it comes to pricing. Some retailers will employ a simple method, find out the wholesale value and then mark it up just enough to make a profit and stay competitive.
Other retailers might employ a more involved approach of purchasing cars as cheaply as possible and selling at or near cost with the hope of making money in other ways. This strategy only works with Black Book data as a baseline. So, a typical consumer can’t truly benefit from what BB offers. It’s information best used by those in the industry.