NADA versus Kelly

4468 Views 11 Replies 5 Participants Last post by Miataman, Feb 11, 2005

argentum

Discussion Starter · Feb 10, 2005

This is a question indirectly related to the purchase of my new MCSC due for delivery early in May. I will be trying to sell my 2000Toyota Celica. Interestingly, I get widely different values for my car depending wether I've used the Kelly Blue Book or the NADA guide. An example: Kelly lists my trade in value at $8300 while NADA lists it at $9225. The Loan officer at my credit union told me that they and most banks use the NADA guide for value. She said that NADA reflected truer value of the automobile. Anybody have some additional input into this question?

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Gr8Dain

· #2 · Feb 10, 2005

The credit union I work for uses NADA as well, but we use the East Coast edition (since we are on the East Coast

). Are both of your guides assuming the same region? It can make a big difference sometimes.

Are you selling it via private party and not trading it? If you are trading it, most car dealers (around DC) use an even lower figure (Black Book). Good Luck.

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stephenjc

· #3 · Feb 10, 2005

I use both NADA and kelly Blue Book in my work on almost a daily basis. The difference bewteen the two that you observed is always the case. NADA is generally considered the industry standard in the auto business because it is based on actual wholesale and retail sales of vehicles. I am not sure what Kelly is based on. I believe that Kelly is an auto dealer helper. Their wholesale values are always lower than NADA and so when you trade in, a dealer will show you the kelly blue book price to justify the awful offer that they are making for your trade. Yet strangley enough Kelly Blue book retail prices are HIGHER than NADA retail prices. So now when you want to buy a used vehicle the dealers will use the Kelly Blue Book retail value to show you what a great deal they are giving you. In my opinion Kelly is nothing more than a fiction created to benefit car dealers when they are either buying or selling used vehicles.

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Z1GZAG N

· #4 · Feb 11, 2005

What you have to remember is that all three (NADA, Kelly and Black) are only "Guides"

The NADA may show your car is worth $9225.00

But if no one is willing to pay that amount after you've shown it to several prospects, you may well have to sell it for less.

There is a lot of factors that efflect price. Not just condition and mileage, but the weather, time of year, and how many other similar cars are on the market for sale at the same time locally.

If you don't need to sell in a hurry, price it on the high side to start. But if you need to sell it quick, you're going to have to list it with a reasonable price.

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argentum

Discussion Starter · #5 · Feb 11, 2005

Thanks for the feedback, everyone. That adds a little clarity.

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Miataman

· #6 · Feb 11, 2005

Guides are really nothing more than just that. Values vary greatly by region and even timing based on what dealers need to sell at a given point in time. In my business, I look at auction sales and use KBB.com trade value for reference when pricing cars we need to remarket.

If you want a realistic idea of what you can get for a car on trade, take it to a Carmax location and get a bid. They will offer to buy outright and often give more than what other dealers will in trade if it is in good condition. Then, look on their lot or web site and locate similar cars and that will give you an idea of the spread between wholesale and retail. Price accordingly and you should do okay

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stephenjc

· #7 · Feb 11, 2005

Miataman said:
If you want a realistic idea of what you can get for a car on trade, take it to a Carmax location and get a bid. They will offer to buy outright and often give more than what other dealers will in trade if it is in good condition. Then, look on their lot or web site and locate similar cars and that will give you an idea of the spread between wholesale and retail. Price accordingly and you should do okay

That is really good advice. i have done this myself with two or three cars of mine. Carmax will even print out the Kelly Blue Book and every time I have had a car appraised they always come out at least $1,000 higher than Kelly. Again its a tool for them to show that the price they offer is good. Other car dealers now commonly even reccomend selling a car to Carmax rather than trading it in as they seem to always give a substantially better price than any dealer will give on a trade. I understand that they can do this because they don't wholesale out their cars. The cars they but they will either put on thier lot and sell or sell at their own auctions rather than the big dealer auctions.

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Gr8Dain

· #8 · Feb 11, 2005

Miataman said:
If you want a realistic idea of what you can get for a car on trade, take it to a Carmax location and get a bid. They will offer to buy outright and often give more than what other dealers will in trade if it is in good condition. Then, look on their lot or web site and locate similar cars and that will give you an idea of the spread between wholesale and retail. Price accordingly and you should do okay

Really? I took a 93 Lexus SC300 to them to get a value prior to selling it. Buy sis they try to get one over on me. They offered $3,200 ans KBB had it between $6,000 and $9,000. I sold it for $6,100 on my own. It had low milage, but the used market was at a stinky point (and still is). I was rather disappointed in the Carmax offer. I take it as an absolute low. Since you know you could get at least that much, don't sell it to anyone else for less.

Dain

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Gr8Dain

· #9 · Feb 11, 2005

By the way, it was in excellent condition. The Carmax report even said that.

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Miataman

· #10 · Feb 11, 2005

Current trends always play a part in what they or any dealer will give. Also, being a 93 model, it might have been older than what they wanted to resell regardless of the condition. 10 to 12 year old cars don't provide for as much profit potetial as newer cars unless they can get them cheap. Used car sales need to generate at least $2000 to $3000 minimum potential profit before retail outlets will jump on them. Every car is assigned overhead cost before they ever get to the sales desk. Then you have commissions, fees, etc.

I'm sure it was a nice car. Just not what they wanted or needed at that time.

Disclosure - I am in the auto finance business but do not have any affiliation with or work for any dealer.

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Gr8Dain

· #11 · Feb 11, 2005

Heck, I know that they would just wholesale it. They don't want anything older than 5 yrs on the lot. I was surprised that they would even look at it. But then again, they do have that new service specifically for cars older than 5 yrs.

I did not want the car, so why should I expect them to want it. And I have worked in credit union financing for a number of years and know how the games are played. That is specifically why I don't play them when buying a car. That was the nice thing about not being able to deal on the price of the MINI ( if there is a good thing about not being able to deal). I had the price from MiniUSA and that was it. No over the top crud. I am just glad that I did not trade anything in to get it. I would not have gotten nearly enough for any of my existing vehicles.

Dain

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Miataman

· #12 · Feb 11, 2005

I agree about wanting to avoid the games. While I hate to pay retail, I really appreciate the way MINI has held its value. After 2 years, the car still holds over 80% of its value. You have to like that!

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