The U.S. has one of the largest concentrations of drivers and car owners. It's a market where 40 million used vehicles trade hands each year. Sellers constantly search for something new that better meets their needs and preferences. And trade-ins go a long way in helping offset the cost of a new car.
The only trouble is that many people don't get the best possible deal because of unfamiliarity with a car's actual trade-in value. Kelley Blue Book (KBB) has long been a reliable resource for sellers who need a better idea about trade-in values.
Read on as we take a closer look at KBB trade-in values, how the company has expanded its services, and more things about its offerings.
Background: What is KBB Trade-in Value?
Before KBB went online, the company was true to its name as the publisher of a "blue book" guide for used car values. It was a handy reference that provided car valuations based on make and model year.
The KBB guide enabled buyers and sellers to set a base valuation (plus or minus specific factors) and work out a deal. At trade-in time, owners could determine if they received a fair offer or needed to hold out for something better.
In a modern context, however, KBB now provides an offer amount via its online platform that partners with participating dealers. Enter in the car's VIN and a few other facts, and the site generates an instant cash value. Take the vehicle to the designated dealer for an inspection and confirmation of the offer. The offer price may change if the car doesn't match the provided description.
When defining the KBB trade-in value, there are essential things to remember to avoid frustration or disappointment.
- The price is an estimated value only, not a definitive amount.
- KBB updates trade-in values weekly.
- The value comes from an average among vehicles with make, model, year, and condition.
- The value is primarily used as a negotiation tool.
- The value will invariably change to some degree based on various factors covered below.
How is KBB Trade-in Value Determined?
So how does the KBB website come up with a cash value so quickly? As with any online trade-in tool, the exact formula is not revealed. KBB describes it as "a proprietary tool that accounts for fluctuating market conditions and used car prices that may vary from day to day." Translation: we're not telling you exactly how we work it out.
KBB does list several factors that go into the calculation without revealing its secret sauce. These factors include:
- Specific vehicle details—mechanical condition, interior and exterior condition, options, mileage, model year, and other specifics.
- Supply and demand—the interest in and availability of similar vehicles.
- Historical market trends—the car's performance (price-wise) on the market over the past year or more.
- Regional and local market factors.
How Do Users Get Their KBB Trade-In Value?
The simplest way to get a trade-in value is to enter the car's details in the KBB site, receive an offer, and then take the vehicle to the selected dealership to confirm the pricing and collect the cash. KBB offers are valid for seven days, so there's time to shop around.
There is no charge to receive an offer or complete the transaction. Notably, the price given by KBB is not necessarily the final amount you'll receive. Though, the vast majority of accurately described cars receive the initial offer amount.
Dealers are typically located within the user's metro area, and car owners need to bring the following along as part of the inspection process:
- The instant cash offer certificate from KBB
- The vehicle title and registration
- Vehicle registration
- A valid driver's license or other government photo ID
- All keys, remotes, and fobs
- All owner's manuals and guides
- Service and maintenance records
After the car gets inspected, a seller has another 24-hour period to consider the offer if they haven't yet made up their mind. This is a helpful feature that permits the seller more time to think about the proposal, particularly if the valuation has dropped. There's also less pressure to sell on the spot.
According to KBB, "participating dealers are required to honor your instant cash offer, provided the information and condition you provided when creating your offer are confirmed to be accurate by the participating dealer." Therefore, it's key that a car owner ensures that any dealer looking to lower the value presents clear and concrete proof that the original description was inaccurate.
The Inspection: How a Car's Condition Impacts Your Offer
When taking the car to the participating dealership for inspection, a visual check is carried out of both the interior and exterior. The task here is to ensure that the vehicle matches the description provided during the initial part stage of the process.
For example, you might have referenced paint chips on the driver's side of the bumper and a scuff mark on the driver's side door sill. These issues are first checked to ensure they are as described. If your "paint chips" are actually a dented bumper with half the paint missing, then expect a lower offer.
Some factors, which are also verified by the dealer, can also make a car ineligible to receive an offer. Presenting this information upfront would have put a halt to the offer process.
- The vehicle title —The car can't have a salvage title or be a gray market vehicle, taxi, or limousine.
- Market forces —A volatile market or other factors that cause uncertainty.
- Open recalls —The offer is revokable if the car has unresolved factory recalls.
- Modifications —A vehicle modified beyond OEM standards may be illegible for purchase by the dealer.
Does KBB Take Financed or Leased Cars?
Yes, KBB accepts leased vehicles and cars with a loan balance. The dealer will handle the extra paperwork to pay off the finance company and give the seller any remaining cash. When selling a financed or leased car, it's critical to contact the bank or leasing company to get clear instructions about the process. And, it's imperative to determine ahead of time if the offer will at least cover the remaining balance (or lease buy-out price).
Is KBB a Good Deal?
As with any online instant cash offer, it's crucial to remember that it will never be as much as you would get if you sold the car to a private buyer. Car values are often split into different categories: sale value, lot value, trade-in value, and auction value, to name a few.
The numbers aren't usually too far apart, but each is different. The highest is the sales value, which should match the vehicle's market value assuming there's no damage.
When considering whether your offer is a good deal, the natural response is to compare pricing. This is precisely why Topmarq exists. How do you know you're getting a good deal unless you check other offers?
Just fill out a simple form to receive offers from top online and local dealers. It's an easy way of comparing multiple offers without any obligation or cost. Get started here .