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Here's some food for thought on all this:
First off, NADA stands for National Automobile Dealers Association. That having been said, who do you think the NADA book is going to favor? You guessed it! The dealer.
And yes, they do use the Kelly Blue Book when you go to trade your car in, then use the NADA book when someone else comes to buy your old car. Is it ethical? No. With very few exceptions, car salesmen/women have earned their reputation as bottom feeders who are beneath contempt.
In all fairness to dealers though, they're in the business of buying cars then selling them for more money than they paid for them. There's certainly nothing wrong with that as long as the profit margin is "reasonable".
If you were trading in that Volvo, what would you expect to get for it? They CAN'T give you top retail dollar for it. How could they make a profit?
Conversely, when you're buying it, you can't go in there and reasonably expect to buy it for what they "paid" for it on trade, right? So the question really is, "What do you feel is a reasonable profit for them to make on that car?"
You can "guestimate" what they paid for the car using the "trade-in" value. If they try to tell you they paid much more than that for it, chances are they're lying. Walk away.
All this having been said, I never buy cars from dealers. I figure for the couple of grand they're going to mark up the price of the car, I could fix almost anything that could possibly be wrong with it. But, this philosophy only makes sense if you work on your own car. You could burn 2K on a brake job and a couple of struts if you're paying labor.
Hey, just my long-winded 2-cents worth.
Good luck
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'92 Mercedes 190E (my daily driver), '93 Volvo Turbo Wagon (a family car w/flair), '53 Willys-Overland Pickup (my snow-plow truck/conversation piece)
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