If you’re considering buying a repossession, it’s a good idea to familiarize yourself with Kelley Blue Book (KBB) values. Given a history of over 90 years and millions of unique visitors logging onto the site each month, KBB is one of the most popular and trusted guides for automotive pricing. It can also be incredibly useful when placing a bid on a repo car. But, how reliable is KBB?
Let’s go over the basics of how KBB determines used car values, some issues with pricing to think about and solutions when placing a bid on a repo car.
How KBB Decides Used Car Values
Kelley Blue Book regularly receives car prices from wholesale auctions, car dealers, rental fleets, auto manufacturers and private party sales. It uses a sophisticated algorithm to analyze pricing data, historical trends, current economic conditions, time of year, location and industry developments to come up with an accurate value for each vehicle.
Here are the different values each car is given.
- Private party value. This number tells you how much you can expect to pay for a vehicle through a private seller.
- Trade-in value. The trade-in value is the amount you’re likely to get when trading in your vehicle.
- Suggested retail value. This is the price that car dealerships are usually asking for a vehicle.
- Certified pre-owned value. Cars covered under certified pre-owned fall into this category.
As you can see, KBB takes many factors into consideration when determining the value of today’s vehicles. However, there is still a lag that must be accounted for, as it takes time to collect and analyze the data. It’s possible that the latest trends and economic conditions aren’t being accounted for in the latest number. Other than this, you can expect Kelley Blue Book to be a good benchmark for your bid.
Tips for Bidding on a Repossession
When you find a repossession that you want, the next steps are to inspect the vehicle and place a bid. Here are some tips that will help you place a strong bid.
- Consider other sources. KBB is great, but there are other options as well. Check out the NADA Guide (the yellow book) and consumer reports. Compare your findings for the most accurate price.
- Negotiate. There is usually some room to negotiate when buying a repossession. Banks and lenders want these vehicles off their books and some will go below the KBB value.
- Set a limit. Know what you’re willing to pay for the vehicle. When multiple people bid on a repossession, it can drive up the price. Don’t let the excitement of winning a bid cause you to pay more for a car than you need to.
- Choose a bank or lender. Although you can bid through an online auction, it’s better to work with a lender or bank. You can get financing through this seller, which gives you more negotiating power and better terms.
The Bottom Line
Kelley Blue Book is a great resource, but it’s not the only one out there. Be sure to consult other resources, establish a limit and do a thorough inspection. This way, you’ll be confident when it comes time to place a bid. To browse repossessed cars, trucks, RVs, boats, etc. in your area, visit RepoFinder.com. It’s FREE!