As the US is still one of the largest concentrations of car drivers and owners, we see an incredible 40 million used vehicles trade hands each year as people downsize or trade in for something newer and more exciting. In most cases, this can be a big help in covering the cost of a brand-new car, bringing the all in total closer to buying a used car several years old.
The only trouble is that a lot of people don’t end up getting the best-possible deal because they don’t know what the real trade-in value of their car actually is. The Kelley Blue Book (KBB) has long been an excellent and reliable resource for people who need to get an idea of the trade-in value of their car to help them get a fair deal.
Below, we’ll be taking a closer look at KBB trade-in value, how KBB has expanded from numbers in a book to a full-blown broker, and other common questions surrounding trade-in values.
Background: What is KBB Trade-in Value?
Before the building and expansion of their website and online car buying/selling platform, the KBB was true to its name and came in the form of a literal blue book that people used as a reference for car values. It was a handy reference that gave a standard valuation on car models based on their make and model year.
When selling, all buyers and sellers then had to do, in theory, was to factor in any damage or other individual factors that would affect the price, and work out a deal. When trading in, buyers would at least know if they were getting a good deal or not and perhaps hold out for something closer to that price.
In the modern context, however, they now include the amount you can get for your car by trading it in via their online platform via their network of participating dealers. By entering your car’s VIN and answering some questions about your car’s condition, you can get an instant cash value on the car offered by those participating dealers. You can then confirm your offer, take the car to the dealer for a final inspection where the price will be confirmed and paid. The offer price would only change if the car didn’t match the description that you gave when getting your cash value.
When defining the KBB trade-in value, there are important things to remember to avoid being disappointed or getting frustrated:
- The price is an estimated value only, not a definitive amount that you will certainly receive when trading the vehicle in.
- Trade-in values on KBB are updated every week
- The value is based on an average between similar make, model, year and condition vehicles
- The value is meant for use primarily as a tool for negotiation
- The value will invariably change to some degree based on the various factors we go into in the next subsection.
How is KBB Trade-in Value Determined?
So how does the KBB website come up with a cash value so quickly? As with any trade-in tool online, the exact formula is not revealed, being simply described as calculated using “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 a number of factors that go into the calculation however, without revealing anything of consequence about its proprietary valuation tools. These factors include:
- Specific details about your vehicle such as its mechanical condition, interior and exterior conditions, what options you purchased with it, odometer reading, model year and so on
- Supply and demand --- if there are too many people offering the same type of car, then the value goes down
- Historical market trends --- how the car has performed price-wise on the market over the past year or more
- Region and local market factors
How Do Users Get Their KBB Trade-In Value?
The simplest way for users to get a trade in offer is to put the car forward, get an offer, and then take it to the participating dealership as soon as possible to confirm and collect the cash amount. If they are still looking at other possibilities, however, they have time because their offer from KBB is good for 7 days with no obligations to the recipient.
To get a trade-in value and offer from a KBB partner dealership is free of charge with no additional fees or costs to the user. The important thing to remember, though, is that the price given by KBB is not necessarily the final amount you will receive, though the vast majority of cars that have been described accurately should receive that amount as agreed.
Dealers are typically located within the user’s metro area, and users are required to bring the following with them when taking the car for inspection:
- The instant cash offer certificate from KBB
- The vehicle title
- Vehicle registration
- Valid driver’s license or other government photo ID
- Any and all keys, remotes, fobs and also user manuals
- Service and maintenance records
After the car has been inspected, users have a further 24-hour period to consider the offer if they haven’t made up their mind yet. That’s a useful feature that allows users a bit more time to see if another better offer will come through, and it reduces pressure in the moment of inspection to accept the offer straight away. If users feel they are being hard done by, they can walk away first, actually pressuring the dealer in some respects.
According to KBB’s own information, “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 car owners be vigilant and ensure that any dealer looking to lower the value presents clear and concrete proof that your description was inaccurate.
The Inspection: How a Car’s Condition Impacts Your Offer
When taking the car to the participating dealership for inspection, there is a visual inspection carried out of both the interior and exterior. The task here is to ensure that the car matches whatever description you have indicated when getting your cash offer.
For example, you might have declared that there were paint chips on the driver’s side of the bumper, as well as a scuff mark on the driver side door sill. These will first be checked to ensure they are as described. If your “paint chips” are actually a rusted bumper with half the paint missing, then you can expect a decrease in the offer.
Some factors can also make a car ineligible to receive an offer, which will also be verified by the attending dealership. If these were honestly revealed at the point of inquiry, no offer would have been made in the first place:
- The vehicle title - It can’t be a salvage title, gray market vehicle, a taxi, or a limousine.
- Market forces - If the market for this particular vehicle has been too volatile, then the risk of making an offer would be too great.
- Recall data - If the vehicle is found to have unresolved recall repairs, then it won’t be accepted and an offer withdrawn.
- Modification - If the vehicle has been modified or tuned beyond its OEM standard, then you’ll also likely have your offer withdrawn.
Does KBB Take Cars That are Financed Or Leased?
Yes, they do. There is some extra paperwork involved if your car is leased or still on finance because the title may not be in your hands. The KBB system arranges to do the added paperwork needed to pay off a financed vehicle, after which you will receive any remaining cash. For leased cars, users should check with the leasing company what paperwork would be required.
When trading in financed or leased cars, it’s critical you contact the finance company or leasing company involved and get clear instructions from them on what to do. For financed vehicles, the most important thing is the amount offered on the car will be enough to cover the remaining finance.
Selling the car privately would more likely generate enough cash to cover the amount, but trading-in value is typically lower than a private sale price. Verify the remaining balance before accepting cash offers.
Is KBB a Good Deal?
As with any online instant cash offer for your car, it’s firstly 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, auction value, etc.
The numbers aren’t usually too far apart, but they are different. The highest is the direct sales value, which should be according to the market value of the vehicle assuming there’s no additional damage.
When considering whether your offer is a good deal, typically the natural response is to go price compare. Which is exactly why Topmarq was created. How do you know you're getting a good deal unless you check what other offers are out there?
Well now it's as easy as filling out a basic form to get offers from the top online and local dealers that you can compare side by side before deciding where to sell. You can get started here .