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How Do Kelley Blue Book Values Get Determined?
What Is Kelly Blue Book?
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Kelly Blue Book, or KBB for short, is an automobile valuation company that is commonly used as a resource for researching the price of a car. Kelly Blue Book is one of the most widely known and accepted valuation resource in existence. KBB provides valuations of all types of vehicles, both new and used. KBB estimates take important factors, such as a vehicle's total mileage, condition, transmission type and location into account when calculating value.
KBB Suggested Retail Value
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The most commonly used valuation estimate that KBB makes is its suggested retail price valuation. While many people use this price as a ballpark for the actual value of a vehicle, this value is actually an estimate of the average asking price that a dealer will quote for a given vehicle. This number is estimated based on actual dealers' quotes, as well as adjustments based on the condition of a specific car. Since the suggested retail price is only an average of a dealers asking price, the actual value of a car--the price that a buyer can get it for--can be substantially less than the KBB suggested retail value.
KBB Private Party Value
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Another estimate the KBB publishes is a vehicle's private party value. This is an estimate of the price that one would expect to buy or sell a vehicle between two private parties. Unlike the suggested retail value, this price reflects the actual amount paid in the final transaction, not an estimate as to the starting point of negotiation. This value is based on actual sales data of vehicles between private parties, and adjustments made for vehicle specifics. The private party value is often a more useful number to guess at the value of a used car than the suggested retail value.
eHow Article: How Do Kelley Blue Book Values Get Determined?
