by Ray Shefska | Last updated Jan 23, 2025 | Dealership Operations
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The value of your car plays an important role in getting you into your next car. You might decide to use your old car as a trade-in, or perhaps you’d like to sell it privately and use that cash as a down payment. Either way that you’d like to go, you need to understand what your car is worth. That’s where vAuto comes in.
There are plenty of auto evaluation tools out there, commonly called “books” because of the way in which they used to circulate. These days, most of the evaluation tools are online and can provide an instant value of any car.
Today, we’re going to take a look at vAuto. We’ll go over what vAuto is, how it reaches its value, and examine how accurate their values are.
What is vAuto?
Founded in 2006, vAuto is a company that was formed by “automotive industry veterans” that aims to give car dealerships a new way to manage their inventory of used cars. Their inventory management tools changed in 2010 when vAuto was bought out by the AutoTrader Group, which gave them access to all of the data from two of the nation’s biggest wholesale markets: Manheim and Autotrader.
All of this data serves to provide car dealerships with more information about their used car inventory. The goal is to help dealerships make the most of their used car inventory and ultimately make the most money possible.
In 2014, vAuto finally grew beyond its original purpose as inventory management software and launched Conquest, a tool for new cars and pricing services. These days, dealerships around the country use vAuto to manage their inventory, evaluate cars, and even guide the reconditioning process of trade-ins.
Have you noticed that all of their services are for car dealers? That’s because vAuto is not a consumer-facing company. The car dealerships are their customers, not car buyers. As such, they restrict access to their services to those who pay a subscription fee.
How Does vAuto Reach its Value?
As discussed, vAuto has access to two valuable marketplaces for wholesale cars: Autotrader and Manheim. Using this data, vAuto calculates how much a dealership should pay for a car. Not only that, but they estimate how long it will take to sell the car in question.
Unfortunately, vAuto does not disclose any part of the algorithm used to calculate car values. We can assume that it takes into account all of the usual data, such as make, model, mileage, and condition. All of this information can be used to determine how much you should be offered for your trade-in.
Are vAuto Values Accurate?
Dealerships have been using vAuto for over a decade. It’s designed to help them manage multiple aspects of their business. Evaluating used and new cars is only one of the services made available by vAuto. As such, car dealers are quite confident in the services that they receive from vAuto.
Most car dealerships consider vAuto to be an important part of their auto valuation process. They’ll run your car through vAuto to gain a better understanding of how much to offer you, how long it’ll take them to sell it, and how in-demand your particular car might be. With all of this information in hand, they’ll make you an offer with the goal of making a profit on your car.
When Should I Use vAuto Values?
You won’t be using vAuto, as they are a subscription-based service that caters directly to car dealerships. However, you can use our Market Price Report, Kelley Blue Book, and NADA Guides to determine the value of your vehicle. You can even make use of CarEdge’s new integration with Black Book to help you understand what you’ll be offered for your trade-in.
Most car dealers will use vAuto in conjunction with the Black Book to determine what to offer a customer for their trade-in. You should understand that they’re likely going to show you the lowest valuation they can find, so don’t be afraid to push back. Highlight the valuations from other services to show that your car is worth more than what they’re offering.
One great strategy is to obtain quotes for your car from other dealerships or sites, such as Carvana and Vroom. Take these real quotes to the target car dealership to show them that you already have offers on the table. If they want your business, they’ll likely offer you more for your car.
Interested in learning how people come up with car values? You can learn more about other evaluation books here.
by Ray Shefska | Last updated Jan 23, 2025 | Dealership Operations, Trade-in
🚘 Search for cars with no ads Whether you’re selling your car privately or trading it in to a dealership, you absolutely need to understand the value of your vehicle. The last thing that you want to do is get taken advantage of because you don’t understand your vehicle’s worth. That’s where NADA Guides values become important.
However, there are quite a few different car evaluation tools out there. These are known colloquially as “books,” since they began as physical books. With so many options, which bok value should you use?
Today, we’re going to take a look at NADA Guides, one of the most popular car value estimators out there. We’ll take a brief look at their history, discuss how they reach their values, and examine when you should use their evaluation tool.
What is the NADA Guide?
Short for the National Automobile Dealers Association, NADA has been around since 1917. Not long after their formation, they started releasing NADA Guides, which is an evaluator tool used to determine how much a used car is worth.
Back in 1933, it was released as a periodical publication that has grown into a fully-featured website that helps consumers to understand as much as possible about a car’s value.
NADA Guides values are trusted by countless car dealers and consumers when it comes to understanding the worth of any given vehicle. They are widely considered to be an equivalent to the popular Kelley Blue Book. There is much debate about which one of the two is more accurate, but the truth is that they are both worth using.
How Does NADA Reach Its Value?
Since NADA Guides was created out of a car dealers’ association, NADA Guides use real sales data from car dealerships to reach their values. NADA Guides use three primary criteria to determine the value of any given car:
- Local market demand
- Wholesale price
- Real-time retail market prices
NADA Guides put heavy emphasis on the car’s wholesale price, as opposed to focusing on mileage and conditions, as other value estimators do. The downside to this, however, is that NADA assumes that all vehicles are in great condition. This practice results in overinflated prices in situations in which the vehicle does have mechanical or cosmetic issues.
You should use NADA Guides values in conjunction with other value estimators to paint a picture of your car’s worth. Dealerships will use NADA Guides to establish a loan value for when they look for financing offers, then they’ll typically use the Black Book to reach their offer amount. This means that you should use everything at your disposal to counter their offer and ask for more. You deserve to get the most out of your trade-in.
Are NADA Guide Values Accurate?
NADA Guide values are considered by many to be overinflated, due to the fact that they don’t factor in the condition of the vehicle. However, many dealerships and consumers still use these guides to get an idea about what their car is worth.
Dealerships typically use the Black Book and NADA Guides in addition to their own appraisal to determine the value of your trade-in. They want to make money off of your trade-in, so they’ll generally offer you a much lower value than what you’re expecting.
When Should I Use NADA Guides Values?
You should use NADA Guides whenever you are planning to trade in or sell your car. Don’t rely solely on Kelley Blue Book — use NADA Guides, as well. Both are free, so you might as well put them to work for you! The more information that you can bring to the dealership with you, the better your negotiation will be. There is no single source that dictates your value; you’ll need to use multiple sources to understand the worth of your vehicle.
NADA Guides are largely used by financing companies, too.
Ultimately, NADA Guides are a great resource for anyone that wants to gain an understanding of the value of their car. Just like with Kelley Blue Book, don’t expect a car salesman to suddenly accept your value from NADA Guides. You will need to secure several other quotes from sites like Carvana, Vroom, and Carmax, and leverage these offers during your negotiations. You should do everything that you can to get a great deal on your new car.
If you’re selling your car privately, NADA Guides and the Kelley Blue Book can work together to justify your asking price. You can use both in your negotiations with the other party to help you get the best price for your car.
Interested in learning how people come up with car values? You can learn more about other evaluation books here.
by Ray Shefska | Last updated Jan 23, 2025 | Dealership Operations, Trade-in
Understanding how much your car is worth is vital when you want to sell it privately or trade it in at a dealership. Without knowing your car’s value, you risk expecting too much or selling it for far too little. That’s where Black Book values matter.
There are quite a few different evaluation resources out there, usually known as “books.” Each one of these books has its own unique method for evaluating how much a car is worth.
Today, we’re going to take a look at one of the gold standards for car dealerships: Black Book. While consumers are often familiar with a book of a different color (yes, we’re talking about you Blue Book), Black Book is often the one that dealers trust and use.
What is Black Book?
Founded in 1955, Black Book has grown and evolved every decade, but their mission has remained the same: To provide the most accurate car valuations out there.
Something that is unique about Black Book is that they charge a subscription fee, which means that their book values are typically only available to car dealerships and lenders. Why would you pay a fee to evaluate your car one time? That is a big reason why most consumers aren’t aware of Black Book (until they get to the dealership).
Black Book valuations are provided through many different mediums, most notably a weekly magazine that is circulated among approved sources, and in other formats, including their website and app. Car dealership solutions such as DealerTrack and Eleads integrate with Black Book to provide their sales staff with real-time Black Book values.
CarEdge is the first non-dealer, non-financial institution to provide Black Book values directly to consumers. Join to gain access to Black Book values and much more.
How Does Black Book Reach Its Value?
Black Book’s main method to evaluate cars is to visit over 60 auctions throughout the country every week to acquire information about used cars. Take note that these are wholesale auctions, which means that they are for dealers only.
Black Book’s data collectors physically visit auctions to obtain sales data, although they also seek data online. Their goal is to have information about every car sold at an auction in the entire country.
Just like other evaluation tools, Black Book has a proprietary algorithm for the way that they reach their total number for a car’s value. On Black Book’s website, they say that they have precise data that comes from “combining advanced capabilities of data scientists with the industry expertise of automotive analysts.” We like the way that sounds.
Black Book gives different values for wholesale, trade-in, private party, and retail transactions. Additionally, they have subsections based on the reported condition of the car. Just like other evaluators, they use as much data as possible about the target car to reach a value. This data is available for CarEdge members.
Are Black Book Values Accurate?
Since Black Book valuations are largely based on the selling price of used cars at a wholesale auction, Black Book tends to be accurate in its evaluations. Dealerships will undoubtedly use Black Book to determine how much your trade-in is worth. Black Book is typically more conservative than other book values. This is another reason why dealers typically rely on their values — it allows them to make more money when they sell the vehicle.
When Should I Use Black Book Values?
Black Book values were once only available for dealerships who paid the membership fee. However, we’ve integrated Black Book evaluations with our CarEdge member solutions. Now, you’ll be prepared for what a car dealership is likely going to offer you for your trade-in.
However, you should absolutely know about Black Book. Dealerships will run a report on your trade-in and use it to make you an offer on your car. Since Black Book is based largely on real sales, car dealers tend to think of their suggestion of value as the guaranteed sale price for your vehicle. That doesn’t mean that the negotiations need to end there. Instead, you should come back with your own information to get them to raise their offer price.
Before visiting the dealership, obtain estimates from other tools. Your most important negotiating tools will be actual offers from other dealerships. You can easily get a quote from Carvana, Vroom, and Carmax. Using these quotes to guide your negotiation process is a good way to secure a great deal. Additionally, CarEdge members now have access to Black Book valuations so that they know what to expect when they visit a car dealership.
Interested in learning how people come up with car values? You can learn more about other evaluation books here.
by Ray Shefska | Last updated Jan 23, 2025 | Dealership Operations, Trade-in
🚘 Search for cars with no ads Determining the value of your used car requires more just than a rough estimate. When it comes to trading in your vehicle or selling it to a third party, accurate pricing is important. Without it, you run the risk of asking too much (and not finding a buyer) or selling it for too little. That’s where Kelley Blue Book values come in.
However, there are many different evaluation resources that you can use. These are known as “books.” Dealerships and car owners can use these books to evaluate their car’s value. Which one should you be using?
Today, we’re going to go over the most popular book, Kelley Blue Book. We’re going to take a look at what it is, discuss the values they give, and go over when to use a Kelley Blue Book estimate.
What is the Kelley Blue Book?
Kelley Blue Book began in 1926 and has become the standard for used car prices. Part of its popularity came from the fact that they used to publish a physical book that was blue, and it became widely used.
These days, the Blue Book lives at KBB.com, where it provides real-time evaluations of your vehicle. When you input all of the car’s information and details about its condition, you are given both the trade-in value estimate and the private party estimate. You’ll also receive a fair purchase price and pre-owned price (in case you’re the one looking to buy the car).
While they no longer distribute a physical book, the Kelley Blue Book remains the gold standard among consumers that want to learn how much their car is worth.
How Does Kelley Blue Book Reach Its Value?
Kelley Blue Book is vague on their website when it comes to the ways that they evaluate vehicles. Their exact algorithm is proprietary, which means that we can’t pick it apart. All we know is that it depends on data intelligence and uses predictive analytics and field analysis to come up with an estimate of your car’s price. According to their website, they use over 250 data sources to come up with their estimates.
We do know that Kelley Blue Book uses the make, model, mileage, and condition of various systems to come up with its value estimate. They also take into account the type of transmission, engine size, and any custom options that might increase the vehicle’s value. Of course, we can bet that they calculate depreciation, too.
Are Kelley Blue Book Values Accurate?
Generally speaking, Kelley Blue Book values can give people an over-inflated idea of what their car is worth. If you visit a dealership, the used car manager is not likely to agree to your Kelley Blue Book estimate.
Why is this? It’s largely because people overestimate the condition of their car when they’re using Kelley Blue Book’s tool. A small dent might not be worth mentioning to you, but an appraiser will certainly take note of it. Car dealerships primarily have to consider how much work will go into fixing the vehicle up so that it’s ready to sell, which is usually around $2,000.
Kelley Blue Book is a trusted tool for consumers, but dealerships don’t care what it says. They’ll use other tools, such as the Black Book and vAuto to determine what to offer you for your trade-in.
So if we’re strictly talking about dealerships, Kelley Blue Book values are not considered to be accurate. When it comes to private sales, though, Kelley Blue Book evaluations can be quite valuable. Private sellers and buyers both tend to use them when they’re navigating a deal.
When Should I Use Kelley Blue Book Values?
You should use Kelley Blue Book when you’re looking to sell your car to a private party. Since the person you’re selling it to has likely already run a report, as well, you can use these estimates as a starting point for your negotiations.
Ultimately, Kelley Blue Book is a lead generation tool for car dealerships. They do their best to evaluate their cars, but their income generator comes from selling your information to car dealerships or directing your traffic to a car dealership’s website.
Even though you may have been raised to think of Kelley Blue Book as the ultimate decision-maker when it comes to a car’s value, if you’re dealing with the dealership, you’re better off looking at the Black Book or vAuto. Save Kelley Blue Book for the times in which you’re selling or buying a car privately.
Keep in mind that CarEdge members have access to Black Book estimates so that you can be prepared for what a car dealer might offer you.
Keep in mind that CarEdge members have access to Black Book estimates so that you can be prepared for what a car dealer might offer you.
Interested in learning how people come up with car values? You can learn more about other evaluation books here.
by Ray Shefska | Last updated Apr 25, 2023 | Finance & Insurance
🚘 Search for cars with no ads If you’ve bought a car before, you’ve experienced the “F&I office.” Shrouded in secrecy, the F&I office, which stands for Finance and Insurance, is one of the greatest profit making centers within a car dealership. F&I Managers can be some of the highest paid employees at a car dealership because they generate so much profit for the business.
That being said, many car buyers are confused when they enter the F&I office. The paperwork, the many products, a good F&I Manager’s sales tactics … They all make it challenging to get in and out of the dealership without having purchased something while in the F&I office.
We also wrote a guide for general car buying jargon that you might also enjoy: The Car Buyer’s Glossary of Terms, Lingo, and Jargon
One way you can feel more confident and comfortable in the F&I office is by understanding the jargon, slang, and lingo used by F&I Managers. That’s why we prepared this guide, our Dealership F&I Office Glossary of Terms.
Please bookmark this page to reference when you are at the dealership in the F&I office. Please also consider sharing this page on social media so that your friends and peers can be more knowledgeable about the car buying process as well.
Without further ado, let’s dive in!
Finance
Finance your car purchase with CarEdge. We work with trusted credit unions nationwide. Get pre-approved in minutes!
Buy rate (APR)
The buy rate is the interest rate that a financial institution quotes to a dealer when you apply for financing through the dealership. Your dealer may offer you an interest rate that is higher than the buy rate, which is referred to as the sell rate. Ask the F&I Manager, “Are you quoting me the buy rate?” When negotiating your financing options through a dealership.
Sell rate (APR)
The sell rate is the interest rate that the dealership quotes you for your dealer-arranged financing. When you submit a credit application through a car dealership, the dealer has the discretion to charge you more than the buy rate. Always ask the F&I Manager if your interest rate is the “buy rate” or the “sell rate”.
Approval
The approval is a document from a financial institution that shows you have been approved for a loan with specified terms and conditions. When you submit a credit application through a dealer, they are not required to show you your approvals from the various financial institutions they contacted on your behalf. You should feel comfortable to ask to see your “approval” so that you can confirm they are not marking up your loan.
3 bureaus
Equifax, Experian and TransUnion are the 3 credit reporting bureaus. Each company gathers data about your credit use to determine your creditworthiness and credit score.
Prepayment penalty
A prepayment penalty is a fee charged on an auto loan for paying off the entire balance of the loan before the loan term is complete. Most auto loans do not include prepayment penalties, however some can. Prepayment penalty protections vary from state to state, so be sure to understand if your financing option has a prepayment penalty or not before signing the dotted line.
VSI fee
VSI stands for Vendor’s Single Interest, and this fee may show up on your final bank contract when purchasing a vehicle. Typically no more than $100, the VSI fee is a cost passed on to you by the lender that protects the bank in the event that the vehicle they are providing financing for is damaged or destroyed.
Base payment
The base payment is the monthly payment you will be making on your vehicle without any additional add-ons or ancillary products. Ask your F&I Manager what your base payment is when finalizing your car deal.
Credit application
The credit application is a form that is typically completed online that car dealerships use to secure loan options on your behalf.
Subvented rate
A subvented rate is an interest rate that is lower than you could receive elsewhere because it is subsidized by the manufacturer in an effort to sell more cars. Zero percent financing offers are an example of subvented rate programs from auto manufacturers.
On approved credit
When you are negotiating a deal with a dealer, the salesperson may quote you monthly payments. You may see the salesperson or sales manager write “on approved credit” next to it. It simply means that this payment is only applicable subject to credit approval.
Lease
Money factor on a lease
The money factor is the basis for the interest portion of your lease. Money factors can be converted to interest rates by multiplying the money factor decimal by 2400.
Due at signing on a lease
The amount you will have to pay out of pocket upon initiating a lease. Many car buyers look for “zero down” leases, however a typical lease will include the first lease payment due at signing.
Residual value
The residual value is the percentage of the vehicle’s original MSRP that the leasing company expects the vehicle to be worth at the end of the lease term. The residual value is not negotiable and is set for each vehicle at each term (i.e. 36,000 miles and 36 months will have different residual value than 24,000 miles and 24 months). Many leasing companies rely on Black Book and ALG to determine their residual values.
Disposition fee
The disposition fee is a fee charged by the lease company to offset expenses associated with the lease return process. The lease disposition fee is typically waived if you lease another vehicle from the same leasing company.
Acquisition fee
The acquisition fee is a fee charged by the leasing company at the inception of the lease. This fee is not negotiable and it is set by the leasing company. The acquisition fee typically covers the leasing company’s expense to purchase GAP Insurance on the vehicle.
Insurance Products
Extended warranties
Extended warranties are sold by manufacturers or car dealers, and they provide elongated warranty coverage on a vehicle. Extended warranties can only be sold by the manufacturer or the dealership selling a vehicle. Most extended warranties last for a short period of time, while longer coverages come in the form of vehicle service contracts. Read the full extended warranty guide here.
Vehicle service contracts
Vehicle service contracts are commonly referred to as extended warranties, however they are different. Vehicle service contracts are a contractual agreement between two parties (the contract provider and the customer), where the contract provider agrees to pay for any future repairs as stipulated in the contract. Many consumers purchase vehicle service contracts when thinking they are purchasing an extended warranty. Read the complete vehicle service contract guide here.
GAP Insurance (Guaranteed Asset Protection)
GAP insurance is a policy that protects car buyers in the event their vehicle is totaled and they owe more money on the loan than the vehicle is worth. For example, let’s say you bought a brand-new Honda Civic for $20,000. You financed it and bought GAP insurance. The second you drive off the lot, you’re in a major accident that totals your car. Your insurance company pays you $15,000 for the totaled vehicle, but what about the remaining $5,000 that you owe? That’s where GAP insurance comes in. GAP insurance will cover the $5,000, plus it should (depending on your policy) cover any deductibles involved. It is advisable to purchase GAP insurance from your auto insurer or bank, but typically not from a dealership since they mark it up significantly. Read the complete GAP Insurance guide here.
Dent and ding coverage
Dent and ding coverage is a common insurance product sold to car buyers that provides protection from dents and dings. If you live in a city and you are afraid your vehicle may get a few small dents, dent and ding coverage would cover the cost of repairs instead of you paying out of pocket.
Tire and wheel coverage
Tire and wheel coverage is another common insurance product that pays for repairs and replacements to your tires and wheels. Be sure to ask if the coverage also covers cosmetic issues with the rims.
Exterior and interior protection
Exterior and interior protection products are add-ons that car dealers apply to their inventory without you asking. These protection products are already installed, but that doesn’t mean you can’t negotiate them.
Life insurance
If you pass away while you have your loan, this insurance will pay off the loan so that your estate does not have to. Although infrequently sold nowadays, you may come across this in an F&I office.
Accident and health insurance
Accident and health insurance provides coverage if you become disabled and cannot make your car payment. This is another product that is infrequently sold but you may come across it at a car dealership.
Excess wear and tear coverage (lease only)
Excess wear and tear coverage is only applicable for a lease and covers cosmetic issues at the time of lease return.
Lojack or similar tracking device
Lojack, and other anti-theft devices are frequently added to vehicles sold at a car dealership. Remember that these anti-theft products are taxable, which means they are negotiable!
Flat cancel
The period of time from the date of purchase of an insurance product where you will receive a full refund. After the flat cancel date you will receive a prorated refund. You can ask your F&I Manager, “What is the flat cancel on the tire and wheel protection?”
Negotiation
Menu-selling is a sales methodology used by F&I Managers to present different products that can be sold in conjunction with the purchase of your vehicle. Menu-selling is prolific in the F&I office.
A two term menu is a menu that shows you how ancillary products would impact your payments for two different loan terms.
What is cancelable
Nearly every product sold in the F&I office is cancelable. What does this mean? It means that if you feel you made a mistake by purchasing a vehicle service contract, you can cancel it and receive a refund. Read your contracts carefully, but don’t let a F&I Manager tell you otherwise … Insurance products are nearly all cancelable.
Paperwork
Motor vehicle power of attorney
The motor vehicle power of attorney form allows the dealership to transfer ownership of the vehicle from the seller (dealer) to the buyer (you).
Application for title and registration
This is paperwork from the state that has all of your vehicle and owner information so that the state can provide you with your title, registration, and license plates
Mileage statements
This is a form that lists the vehicle by VIN and the exact miles that are on the vehicle when it is either traded-in or purchased.
We-owe
A form that dealership staff will complete and associate with your deal for anything the dealership owes the customer. For example, floor mats that the dealership owes you as part of the car deal.
You-owe
A similar form to the “we-owe” that lists anything the customer owes to the dealership. For example, the second key for a trade-in.
Errors and omissions statement
A form the customer signs stating that they agree to come back and redo paperwork if there are any errors or omissions at the time of completion.
A form you will sign in the F&I office stating that you were made aware of all the products for sale in the F&I office.
Misc.
Payment grace period
How many days the bank gives you from the due date where they won’t charge you a late fee.
Trade payoff date
When you are trading in a vehicle and you have an existing loan, you will need to request a payoff amount from the financial institution. The payoff amount has a “good until” date, this date represents the date by which the payoff must be made.
Days to first payment
When you originate a new loan you can choose to have your first payment made anywhere from 30 to 45 days from the date of origination.
Signer and co-signer
The signer is the main obligor on a loan. The co-signer is the secondary obligor. If the signer does not make their payments the co-signer is on the hook for the loan.
Personal guarantor
A personal guarantor is the person who guarantees a loan, oftentimes this is required for a business purchase.
Soft pull
Soft credit inquiries do not affect your credit score and are typically used to prequalify for an auto loan.
Hard pull
Hard credit inquiries typically require your authorization and do impact your credit score. Financial institutions run a “hard pull” to make a final decision on your loan application.
What did we miss? Please comment down below and let us know. We’ll update this page as requests are made. Thank you for being a part of the CarEdge community!
