What Are NADA values?
The National Automobile Dealers Association (NADA) is the premier trade organization for over 16,500 automobile dealers across the country. Owned by its parent company, JD Power, the NADA organization is responsible for initiating and passing governmental legislation friendly to the car industry. In addition, NADA puts out forecasts about industry trends and has been the definitive go-to resource for car values for nearly a century.
How Did NADA get started?
Shortly after the automobile began to appear as a regular mode of transportation in the late 1910s, the government decided to impose a 5% luxury tax on any automobile sold. As you might expect, most car dealerships opposed the idea, knowing that it would hinder the ever-growing car market and drastically impact their sales. The small group of dealers who initially formed the organization was successful in getting Washington to lower the luxury tax, and the political purpose of the dealers association was born.
Since the 1930s, NADA has produced a reference book on used car values once or twice a year. This handy little reference guide was the one essential tool every used car dealer and buyer used to complete transactions until the Internet became prevalent and dealerships switched to computers in the 80s.
Today, NADA works primarily as a political action committee, supervising and steering legislation that impacts dealerships. In 2015, NADA sold its Used Car Values division to JD Power, which had grown as a customer review company helping consumers determine the best quality and reliability of thousands of products in different industries.
What is the NADA online resource?
You can use two websites to provide NADA guides so that you can get appraisals for your car.
The essential NADA website can provide values for your car. The Website will ask you about your car's make, model, and year. Insert the mileage and assign a range of numbers based on condition. The website also allows a search for dealers with a vehicle like yours (which is helpful if you plan to negotiate with them). In addition, you should take advantage of the vehicle history report, as this service can indicate any potential problems and arm you with information if there are any.
JD Power is an excellent tool for researching a little bit of everything about your car. You can click on the sell my car tab and go through the progression of questions, and the website will give you a NADA value based on mileage and condition.
Both websites canes from 1926 - 2022, covering most classic cars. If your vehicle is pre-1926, you should seek an appraisal from a different source. Chances are that any vintage car or truck from that pre-WWII era will fetch a sizeable investment, so it might be best to have an independent appraisal done by an outside company.
One thing that both websites have going to fit is the ability to read actual customer reviews and see ratings on initial quality, reliability, and owner loyalty. JD Power has been the essential customer review and rating organization for hundreds of products for years. Many companies live and die based on how many JD Power awards they receive.
What is the Difference Between NADA and KBB or Edmunds?
There are several different review sites available to determine a car’s worth.
While Kelly Blue Book is one of the most popular, they use a methodology based on many factors, including mileage, condition, popularity, and location of the purchase. (Car values tend to escalate in certain areas of the country, so if you live in the Midwest, you don’t want a car value based on the same car’s worth in California, for example).
NADA's algorithm places less weight on popularity and region and more on wholesale values. It assumes your car is in good condition. (They cannot give an evaluation on a car that is not running because the expense of repairing the motor might exceed the value of the vehicle).
The drawback of using NADA guides is that they are based on dealer inputs and do not always reflect accurate numbers for private sellers. Because of this difference, KBB and Edmunds values tend to be lower than NADA.
In addition, KBB does not give values for any kind of car over 21 years old, so if you own a car from an era earlier than the late 80s, you might have to seek an appraisal from somewhere else.
Edmunds is a reliable appraisal site that has been around since the mid-1960s, printing valuation books to help offset the dominant NADA guides. The valuation from Edmunds seems to place a lot more emphasis on condition, age, and mileage than other sites, which can affect the car's value significantly. As long as you are accurate about the condition of your beauty, you should be able to get a pretty reliable calculation of what your car is worth.
Another caveat is that Edmunds will not have enough information to process a car built before 1990.
Many appraisers believe it is a good idea to research the value of your car thoroughly and decide its worth from multiple sources. The ability to be armed with information will help when you insure the car for what it is worth to ensure you have adequate coverage. Should an unforeseen event happen, and the car gets totalled, you want to be confident that the car's ACV (actual cash value) matches your valuation.