Difference between NADA & KBB – Car Dealership Secrets

Is there a difference between Kelley Blue Book (KBB) and National Automobile Dealers Association (NADA)?  

If you are looking to sell your car, there is a ton of mixed-up data out there which is just enough to confuse even the automotive retailers.  (Seriously!)

You can get values from KBB, Edmunds, CarFax, CarGurus and several other places. But if you are in the south, one value matters the most: NADA. And this is what makes the difference between NADA & KBB so important!

Simply put, if you are looking to buy a preowned vehicle, banks will only finance as much as the vehicle’s NADA value.

Every car holds a value at NADA according to its vehicle identification number (VIN) along with its miles and conditions.

The amount that you get a loan approved greatly depends on the NADA trade value, mileage, and creditworthiness. It can be anywhere between 80% – 120% of that value.

That means when a dealership or buyer is looking to purchase your vehicle, that number holds a large amount of weight as to how it can be resold.

For a dealership, that means if they own it for much more than that number, they either must turn away potential buyers, or not make as much money when they turn around to sell it.

For private party buyers, if they don’t have the cash, then their bank is calling all the shots.  So, if the car is priced too high, they will have to back out of the purchase.  

But why does NADA get to call the shots? Because NADA is slightly conservative and they don’t use a depreciation schedule. According to NADA.com, they use auction sales, retail sales and asking price data, as well as macro- and microeconomic factors and judgment to depict the used vehicle market. Used vehicles depreciate at different rates, which is why they do not use a standard depreciation percentage rate across all vehicles.

Another thing to note is that NADA is owned by J.D. Powers & Associates, a reputable customer advocacy company.  KBB is owned by Cox Automotive, a company built for dealers, that sells your information to dealers.

You have the knowledge. You have a choice.

Click Here to get your cash offer from the guys who are here to help you.

difference between NADA and kbb, dealership secrets

After having worked at car dealerships for a decade, it is my mission to bring to light the truths of car dealership tricks. My goal is to educate customers and give them the knowledge to be powerful against dealerships. Check out these other articles to help you along the way!

Best place to sell my car? Carmax or CarZeus?

What a Kelley Blue Book Value really does (SURPRISE!)

The Trade-In Secret Dealerships Don’t Want You to Know

About the author:

Vida Rivera is a 10-year veteran in the automotive industry, working her way up from Salesperson to Used Car Director. She has worked in both San Antonio & Dallas/Ft Worth markets. She subsequently left the dealership world because she was tired of their tricks & games. She now works with CarZeus as Buyer & Social Media Strategist.