Carbly | A Guide to More Accurate Vehicle Appraisals

A Guide to More Accurate Vehicle Appraisals

How to Maximize Profits and Minimize Losses

Whether you're determining the highest price to pay for a vehicle or understanding what you should accept as a floor for offers, finding out the true value of a car or truck can be a complicated business.

Fortunately, we've been doing this for a long time and have a strategy that can make it easier and help you avoid making bad purchases or sales. We call this process Source Triangulation. In order to accurately assess a vehicle's price, you need to consider the entire market. Dealers buying and selling at wholesale combined with the retail prices consumers are actually paying at the dealerships are the basis for understanding the market for a particular car.

Source Triangulation

Combining trusted sources of data to accurately determine market prices
Source Triangulation

Source Triangulation

Triangulating the 3 main sources of data for vehicle valuations is critical because it accounts for all aspects of the market. Limiting yourself to one source when valuing a vehicle leaves you with huge blind spots and vastly increases the likelihood of taking a loss on a deal.

Book Values

Book providers such as NADA Official Used Car Guide® and Black Book® provide an incredibly valuable service. They are able to abstract away much of the complexity and give individuals a baseline for determining values.

While these book value providers are essential to determining price, there is often significant variation between the numbers they provide. Our valuation method involves cross-checking at least 2 of these appraisal sources to determine how reliable the data actually is.

While these providers are valuable, they represent only one dimension to the solution, as they don't often fully reflect market variables. We'll see a few examples of this shortly.


The retail market is the last piece of the puzzle when it comes to determining value. It's the ultimate ceiling on what a vehicle is worth once it reaches the end buyer. Overestimate this number and you can quickly find yourself upside down. Underestimate it and you'll miss the mark at wholesale or leave money on the table at retail. Just like we do with guide books, Carbly recommends multiple data points when assessing the retail market.

Historical sale comps are the best way to predict what the market will do next. Carbly provides actual historical retail transactions from almost 50% of dealers in the country, so you know what to expect out of a vehicle. To avoid being caught out in an ever fluctuating market though, it's equally important to understand live, local comps. Carbly performs in-depth analysis so you can quickly compare historical indicators to the live local market.

Average Prices Can Mislead

Average vs. median price

Be careful when relying upon average numbers provided by book values. In the above scenario, you can see that the sale comps are distributed across a fairly wide range of values. Just looking at the average price can result in a poor decision, because it is heavily influenced by the outlier sale prices.

In this case, using the average number as your price basis (vs. looking at the median price), could result in an overpayment of $1,800.

Optimizing Profit and Reducing Risk

Know Your Spread

The ideal scenario in most transactions is to buy at wholesale prices and sell at retail. The difference between these two prices is called the spread, and typically equates to profits (minus reconditioning and fees). Therefore, when evaluating whether an offer is good it is wise to consider where you typically fall in these ranges and hedge against the worst case scenario.

When purchasing you obviously want to pay as little as possible, but knowing what your upper bounds are and what you're likely to get out of a car can inform what your best possible offer is.

Avoid the Danger Zone

On the graph shown, we've designated anything above $15.5k to be the "Danger Zone". Based on wholesale and retail valuations, paying more than this could lead to being unable to get rid of a car without losing money. By avoiding this zone and playing it safe, you're unlikely to lose much money in a worst-case scenario.
Price spreads

Regional Price Differences

Vehicle values can vary greatly between geographical regions, and you should make sure to consider which market you plan on buying from and selling to. Some book values take this into account and will give you the price for your current region, while others provide national averages.

Price differences between, for example, the midwest and Southern California can be quite different. Make sure you don't get caught out because you were looking at the wrong data.

Assessing Vehicle Condition and Repair Costs

You can't appraise a vehicle's value unless you know its condition. This is possibly the most challenging aspect of the process, since knowing the cost of repairs and reconditioning are essential to knowing whether doing so is cost effective.

If you don't have the experience of being able to estimate repair costs, the best strategy is to develop a few relationships with local specialists in vehicle repair. Having trusted people you can get estimates from means you'll have a process for making quick determinations about how much of a deduction you should apply against a car or truck's value.

Unfortunately, there's no real shortcut here apart from either gaining the expertise or talking to someone who has it.

Case study Carbly screenshot

Case Study #1

A Simple Example

Let's take a look at an example appraisal process to help clarify what we mean by some of the above points. The following data was generated by Carbly for a 2016 Honda Civic.

Our appraisal summary shows that we should expect to pay around $12,123 at wholesale, and could reasonably anticipate a retail selling price of $15,453. This is a good profit margin, and so far, all signs point to this being a good vehicle to purchase at the right price.

We also see the vehicle highlights section which points out both postives and negatives to be aware of. This car has a clean CARFAX, a great possible profit number and a low market days supply (days on lot).

Case study Carbly screenshot

It's time to look at some of the details supporting these numbers, and we start with Black Book®. The prices show that a vehicle in average condition maps closely to what we've seen thus far.

Case study Carbly screenshot

Let's move on to Manheim Market Report. Again, the numbers tell a similar story, and indicate an even higher possible retail selling price. So far, we have very good data consistency between 2 of the valuation books.

The bottom section shows price history and projections for the wholesale and retail car markets. The projected price drop for both is pretty low, which gives us confidence that even if we don't sell the Civic in a short amount of time, it's going to hold its value well.

Case study Carbly screenshot

Our third book, Real Retail, shows us some incredibly powerful data by listing actual retail sale prices. These are not asking prices, but final sale numbers as reported by dealerships.

The retail sale prices are again consistent and encouraging.

Note the distribution graph for market days supply. Carbly shows you the median number, not the average. An average MDS would be heavily biased by that outliier of 1,079 days which might lead to seeing a misleading number.

Case study Carbly screenshot

Next is a look at actual recent retail sale comps from Real Retail. For vehicles with a similar mileage of 33,000 miles, we see that dealers are reporting good profit margins for this Honda.

Case study Carbly screenshot

Now let's crosscheck our values with what NADA Official Used Car Guide® reports in Carbly to see if we're in the ballpark on our estimates. We see a retail estimate of $15,450 for a car with similar mileage, so that is reassuring.

Importantly, we see a loan value of $11,950. Typically the max price allowed for finance is 120% of this number, in our case $14,280. This is great, since it would not require too high of a down payment from the retail purchaser to reach this figure. If this delta is too large, our pool of prospective buyers shrinks significantly.

The CARFAX report shows clean, with 2 previous owners. The full CARFAX report is available if we're interested in seeing ownership history and service reports.


Based on the above analysis, we can realistically expect to acquire this vehicle for around $12,000 and sell it for $3,000 more than we paid. Taking into account reconditioning costs, this looks like a great candidate to buy at the right price.

Case study Carbly screenshot

Case Study #2

A More Ambiguous Example

Now let's consider a more complicated appraisal, a 2016 Porsche Boxster S.

At first glance, seeing the spread between the wholesale and retail price might have some dealers licking their chops. But let's look a little closer at the data, and we'll see where the true power of Carbly comes into play.

While the CARFAX report shows clean, and a large possible spread is flagged, we need to be aware of a few things:

  • This car has significantly higher mileage than other examples.
  • With a median turn of 92 days, this Porsche is not going to sell quickly, so we need to expect to have it on the lot for quite awhile.
  • There are not many retail sale comps to compare it to, which means we have to be cautious when relying on retail data.

Case study Carbly screenshot

One of the first steps we take when we're suspicious about a valuation is to compare the data providers. We can see immediately that something is amiss. Black Book® has a wholesale price of $37,000 and a retail price of $45,000. Manheim Market Report shows the range as $44,000 to $50,000.

There is almost no overlap between the 2 valuation books! You can see here where relying on a single provider for data can be dangerous.

This is highly concerning, and means that we have to be very cautious.

Case study Carbly screenshot

Let's finish our appraisal by seeing what Real Retail and NADA Official Used Car Guide® show us.

Real Retail shows us the high market days supply we saw earlier and shows us a retail sale price that is in disagreement with both of the previous two books.

With only 2 retail sale comps, neither of which is near our mileage, things are getting worse for this vehicle.

Note the $3,876 loss. This could very well be the result of someone relying on a single data source for their initial appraisal, resulting in far too high of a ceiling value at purchase time.

NADA Official Used Car Guide® reports a retail price that is almost $9,000 less.


The data in the case of this Boxster is far from crystal clear. Factoring in the median market days supply of 92 days, a seasoned buyer wouldn't risk putting anything more than mid-to-high $30,000s into this car. This is a conclusion that could not have been reached by relying on a single book value.

Carbly Has You Covered!

All of the above appraisal work was done using Carbly, our complete tool for not only running accurate appraisals, but also sourcing and selling used vehicles on a dealer-to-dealer marketplace. It's free to get started, so get going today.

Have questions about Carbly or appraising vehicles? Give us a ring at (800) 996-4028.

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