When you’re either buying or selling a used car, determining an appropriate price is a frequent stumbling block that people come across. As a buyer it’s hard to know if the car you’re looking at is really priced fairly; as a seller it’s hard to know if you’re low-balling your car or pricing yourself out of the market.
The way around this problem is for both buyers and sellers to have a common reference that offers a standard price. This comes in the form of many popular publications and listings, including the Kelley Blue Book (KBB), but also Black Book. KBB is the “senior” of the two in age, being founded back in 1918 compared to 1955 for Black Book. Besides their age, the two have other important distinctions that many don’t realize.
We’re taking a close look at Black Book car values, what they mean, who they serve and what the essential differences are between it and the likes of KBB.
What is the Black Book Car Value?
Put simply, the Black Book value is a valuation of a vehicle according to the organization Black Book based on its own data. It is focused on providing the wholesale and auction value of cars to dealerships. Using this information, a dealer is able to determine a retail price on a used car that will guarantee a profit, or perhaps to set the right cost price to attract customers that they can then augment with profit-making extras like accessories, financing and more.
Black Book prices are not readily available for anyone to simply look up. You have to subscribe to gain access to its data. This model is quite different from some other popular valuation platforms like KBB, but we’ll cover those differences in more detail in the next section of the blog.
The Black Book platform offers not only valuations, but a host of other services to those working within the automotive sales industry, including (but not limited to): trade appraisals, market research and data, depreciation trends, risk assessment, residual forecasting and more. In essence, it’s an indispensable tool for those in automotive sales and marketing, providing the key base figures they need to formulate strategies for the coming year in vehicle sales.
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 information they provide. First of all, 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 from which to formulate a fair and competitive price for their car. Black Book, on the other hand, is focused on retailers in the marketplace. In other words, KBB is a consumer tool rather than an industry tool.
Another difference is in the ways in which people interact with these services. We mentioned in the previous section, for example, that BB data is not available 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 who may only buy a single in a period of 7-8 years, or even longer.
KBB, on the other hand, offers a free and open online platform, and previously offered a publication that was targeting dealerships, but that was discontinued in 2017. Users need to simply enter information about their vehicle into the platform, and can get the trade-in and private sale value of their vehicle instantly.
In terms of interaction and access, KBB has another difference to Black Book in the way that users can gain offers for their cars via the platform. KBB, in a similar fashion to some other consumer-oriented platforms such as Edmunds.com, has a facility through which users can get an instant offer on their vehicle after learning the trade-in and private sale value of their car. This is not something that BB offers.
This brings us to another key difference, which is that 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 who are looking for a certain car brand or model, but have no notion of what it should cost. Upon learning the basic value of their target car, they can then be connected to listings armed with the market information they need.
Black Book, on the other hand, is a starting point for industry professionals who are looking to set retail prices on their vehicles strategically both to generate profit and make their operation competitive in the marketplace. They don’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 other supplier such as an auction house.
It should be noted that while KBB is the most consumer-friendly, it’s not as though dealers couldn’t also use it as a reference point, especially if they were smaller and they were looking for a more affordable alternative.
Is Black Book Better than Other Car Valuations?
Just about every major vehicle valuation platform claims to offer the most accurate data to their users, and that includes Black Book. Is it really better, though? The fact is that their data is garnered from much the same type of sources as many other platforms, including KBB. The primary source material their data is wholesale auction results and numbers from real vehicle transactions happening across the US and Canada.
Does the fact that their 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, but it doesn’t automatically make it better. It’s fair to say that their data is both reliable and accurate, but that doesn’t make it any more accurate or useful than others.
In addition, it’s unfair to compare like for like when looking at an industry-focused platform like Black Book and alternative consumer-focused platforms like KBB and Edmunds. Some point to the fact that the data has differences as proof that BB is more accurate. The fact is that these platforms are sharing values to different primary audiences. It’s therefore not right 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 book we can throw into the mix, namely the Australian “RedBook” vehicle valuations. RedBook is an Australian web-based platform that also covers New Zealand, Malaysia, Thailand and even China.
It is more in line with KBB in its consumer focus, and offers users information on cars, bikes, boats and more, but also a range of commercial fleet services, and access to information on JDM imports, which are very popular 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 fairly expensive proposition as a consumer to subscribe to just to find out the exact wholesale price of a certain vehicle that you might be interested in. For consumers, platforms like Edmunds and KBB are definitely the best proposition.
For those working in the automotive industry, specifically in sales and marketing, however, it is undoubtedly an indispensable resource. Car pricing is far more complex when you’re on the industry side than when you’re on the consumer side. From the perspective of consumers, they just 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 the slew of private sellers that are out there circumventing the wider retail network. This means that careful strategies have to be formed when it comes to pricing. Some retailers will employ a simple strategy, finding out the wholesale value and then marking up just enough to make profit and stay competitive.
Others might employ a more involved strategy by purchasing cars as cheaply as possible, but then selling at cost, or close to cost, and generating their profits in other ways.
To make these strategies a reality, dealers need the data that only Black Book can reliably provide. Therefore, if you’re a consumer, you don’t really need or benefit from its value so much. If you’re an industry player, it becomes much more of a necessity.