How Reliable Is the NADA Used Car Price Guide

February 22, 2012

Information on how the NADA Used Car Price Guide is sourced and verified, and how to use the guide for evaluation your own used car sale or purchase.

NADA Guide

The NADA Used Car Price Guide is a set of consumer reports similar to the Kelley Blue Book and to the Edmunds Guide. The NADA Blue Book is the official retail price listing for the National Automobile Dealers Association, a national trade group that incorporates thousands of car dealers. Therefore, the guide can make use of a wide variety of points of sale in order to list NADA used car prices. When purchasing a used car, it can be difficult to ascertain exactly what the value for a particular vehicle is because there is typically some discrepancy between the values listed in the NADA guide, the Kelley Blue Book and the Edmunds Guide. The NADA guide is a reliable source of information, but you must understand exactly what it represents in order to make use of it effectively.

How NADA Lists Prices of Cars
NADA representatives tout their price guide as the strongest representation of the true auto market values in comparison with the prices listed in the Kelley and Edmunds guides. They claim that NADA has a unique set of data points that those other guide books are unable to access; the sales made by auto dealers who are exclusively affiliated with the National Automobile Dealers Association. The result is that the NADA price guide uses hundreds of thousands of individual transactions to come up with average price listings for its vehicles, which is generally a stronger set of data points than either of the other two major used car pricing guide systems is able to use.

Issues with the NADA Values
One primary issue with the NADA value for a used car, however, is the fact that they make use solely of dealer sales prices. If you are planning to sell your vehicle to a private buyer, or if you're purchasing your car from an individual and not from a dealer, the dealer-based sale prices of the same model, year and make of vehicle are not going to be entirely helpful to you. Dealers tend to sell vehicles for quite a bit more money than individual sellers do, and the NADA guide does not always account for the various discounts and dealership incentive offers that are made in these cases.

A second reason to be cautious when dealing with NADA values is that this particular price guide only analyzes sales of cars in very clean condition. This accounts for a much larger percentage of dealer sales than it does individual sales; in fact, only a very small fraction of used cars sold on the individual market are in such good condition. For this reason, the NADA value for a vehicle may not be the most reliable gauge of price.

How to Use the NADA Used Car Price Guide

The NADA website walks you through entering criteria to find the price guide estimation for the used vehicle you're considering. The steps below outline the process for using the NADA online used price guide.

Visit the NADA Website

  • Click on the tan "Go" button to the right of Prices & Information on the homepage
  • Enter your zip code
  • Choose your make
  • Choose year
  • Choose trim type
  • Enter mileage and options

Compare Trade-In and Retail Values
After entering the criteria for the used car you want to find the pricing estimates for, a list of values will come up: Rough Trade-In, Average Trade-In, Clean Trade-In and Clean Retail. Each heading is click-enabled with a pop-up that describes what each term means.

Research Related Information
The site has several links to direct you to additional information including:

  • Free VIN (Vehicle Identification Number) check
  • Standard specs
  • Information on standard warranty
  • Any recall information
  • Safety and quality ratings from the National Highway Traffic Safety Administration

Search and Compare Similar Vehicles
From the same page, you can click on the "Compare Vehicles" heading to open up a new page that saves the information of the car you just researched with the ability to add a second car to do a side-by-side pricing comparison.

NADA helps provide consumers with much needed information about used automobiles, enabling them to make informed choices when selecting and purchasing used vehicles. It's an important step in the car buying process.

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