Kelley just publishes dealer asking prices, so their prices are almost always inflated. See What is the Kelley Blue Book Price (http://www.edmunds.com/advice/buying/articles/49241/article.html).
From the Edmunds FAQ about Used TMV prices:
"The process begins with raw transaction data: millions of records of actual used car sales for thousands of makes, models and styles, in all regions of the country and in all colors, updated on a regular basis. This data is sorted, cleaned, analyzed, and processed, and becomes the basis of TMV used vehicle pricing.
Second, our staff developed a complex and proprietary set of rules that permit us to determine, based on this underlying database, the following TMV prices for the vehicle you specify: dealer trade-in (the estimated average price consumers are getting from dealers for their trade-ins), dealer retail (the estimated average price consumers are currently paying dealers for used vehicles), and private party (the estimated average price consumers are paying each other in private party transactions). These rules take into account such factors as the vehicle's original price when new, its estimated depreciation rate, the color of the vehicle, which of five regions of the country the vehicle is located in, and the vehicle's mileage, condition, and options."
Note that first factor - actual transaction price data. There may be a little bit of a time lag in crunching the data, but if your dealer won't sell at TMV or lower, walk. There'll be another car on the lot to buy tomorrow and the next day.
Source: http://www.edmunds.com/about/pricingtabl...
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