Orange Book Value is an advanced algorithmic and data science based pricing engine that determines the fair price range of any used vehicle. It is not limited to cars and covers a wide variety of categories. Many pricing engines work purely on past transactional data; unlike those, OBV uses empirical evidence together with Droom's proprietary data science methodologies to evaluate the price of a used vehicle.
The factors that go into an OBV valuation include the make, model, year and trim of the vehicle, depreciation over the years of ownership, odometer reading, the purpose of the transaction (buy or sell), the party at the other end of the transaction (individual or dealer), and the condition of the vehicle.
To calculate depreciation we have plotted thousands of depreciation curves and mapped each vehicle to those curves, so the depreciation applied reflects the number of years of ownership as accurately as possible. The party and the purpose of the transaction also play a major role, increasing or decreasing the value obtained after depreciation depending on the scenario.
Any vehicle — indeed any machinery — undergoes wear and tear depending on usage. In vehicle terms, the distance travelled, captured through the odometer reading, indicates the condition of the vehicle and is factored into the valuation. The value obtained will either increase or decrease based on that reading.
Anything that is maintained well deserves credit and holds a higher value, and used vehicles are no exception. A vehicle in excellent condition commands a higher value than one in poor shape. For more detail on assessing this, see How to Determine Condition.