08.24.2022

Black Book’s Trade-In Value

For over 60 years, Black Book’s Trade-In Values have been utilized by industry experts, including buyers, sellers, and lenders, as the Gold-Standard to accurately represent the current trade-in value of a vehicle. The published values reflect daily changes in the marketplace and are adjusted for mileage, condition history, and region. As an independent data guide, Black Book’s mission is to agnostically report the market, therefore we do not project a vehicle’s value, nor do we imply what the value should be; rather, Black Book reports the current valuation. Our goal is to report the market with precision, in the timeliest manner possible. 

Recently, Black Book introduced a VIN specific valuation (History Adjusted Value) that considers the individual history of each vehicle, including the number of owners, vehicle usage, number of accidents and corresponding severity, title issues, flood/hail/fire damage, CPO history, and other variables that are not obvious when physically inspecting a vehicle. Through the use of real-time data, powered by AutoCheck, we incorporate over 1,200 VIN specific history data elements, and adjust the value accordingly, based on our proprietary algorithm, ensuring our users incorporate all potential variables into the trade-in value.

Sales Data​

Black Book’s trade-in price is based on the most comprehensive view of the automotive market. Through proprietary relationships and agreements nationwide, Black Book receives transactional sales data from most auctions, as well as a variety of upstream auction feeds from OEMs, fleet management companies, rental car companies, lenders, dealer-to-dealer auction platforms, and more. We cover more than 95% of all auction sales, and we account for all available sources, not just one. ​

Additionally, our survey personnel attend and report on over 65 auctions each week where they: inspect sold vehicles, record weather, attendance and other local conditions, and interact with the industry’s front line. ​This allows us to properly identify changes in buying behavior, demand, and supply in the marketplace before any data trends emerge.

Methodology

All Black Book values are data driven. We use a proprietary statistical expert system in which machine learning techniques are aided by our subject matter experts – analysts with a combined 250+ years of industry experience. In addition to a statistical outlier detection process, the data is reviewed and annotated by automotive analysts in order to apply machine learning techniques.

Once the data is prepared, the following adjustments are made to any sale:

  • Condition Adjustment: Condition of the vehicle is ascertained and included in the calculations
  • Mileage Adjustment​:  All sales prices are adjusted for deviation of actual mileage from expected mileage for a given month. The cents per mile rate is determined using non-linear regression and depends on the vehicle class and age
  • Regional Adjustment:  Regional differences are identified and accounted for when the national average is derived

Posted in: Dealers