Automobile Pricing Guide

Dear Dave,

What is the difference between NADA, Kelley Blue Book, and Edmunds.com? Is one more accurate than the others, and how would you use them in negotiating the sale or purchase of a car?

Anonymous

Dear Anonymous,

NADA stands for National Automobile Dealers Association. A lot of their information is based on loan value, which basically is nothing more than what a banker wants to lend on a particular vehicle. Plus, it seems to me that overall NADA is oriented more toward the dealer than the consumer. KBB and Edmunds are both pretty fair in terms of real world value, but you have to gather up pieces of information in order to get an accurate assessment.

I always look at the KBB private sale section when I buy or sell. Then, I'll print out the information and use it during the negotiation. You could also shop other car sites online and find out what they're asking for the same kind of vehicle. If you gather up several reference points of information you'll begin to see a pattern evolve, and you'll end up with a pretty good idea of fair market value.

Let's say one site lists a car at $12,000, and another says $13,000. You could turn around and honestly tell a buyer that you're offering a really good deal at $10,000. You could also toss out the high-end prices and the lowball numbers to come up with a good middle-ground figure that's fair to both parties!

-Dave

* For more financial help, please visit daveramsey.com.

Comments and feedback can be sent to feedback@ldsliving.com