Appraisal and Kelley Blue Book
You've probably heard the term "blue book" before, but you might not know what it means. Is it like a little black book? Sort of, where cars are concerned.
What's a "Blue Book," and Why Should I Care?
A "blue book" refers to Kelley Blue Book . First published in 1926 by company founder Les Kelley, the book is named after The Social Registry, a book that listed the names of local movers and shakers commonly referred to as the "blue book."
Through the years, the book has become a trusted source of information for the automotive industry, sort of like an industry bible. It's kept up with the times, turning into a viable online resource. Use this "book" as a reference for obtaining important information on new and used cars as well as motorcycles and recreational vehicles. It's especially useful to determine a fair price on a vehicle.
Kelley publishes several versions of its books for different types of users. We'll take a closer look at two versions widely used by consumers.
Kelley Blue Book New Car Price Manual
Not surprisingly, this book offers information on new cars. Like what?
Manufacturer's suggested retail price (MSRP): This is the price suggested by the manufacturer, and it is (gasp) usually inflated. Included in the MSRP are the destination charge for the vehicle and the minimum required equipment cost. Kelley Blue Book also lists this information separately.
Dealer invoice: This is the price the manufacturer charges the dealer for the car. It doesn't include dealer expenses such as advertising, sales commission, and preparing the vehicle for display. Know this price before you begin looking at price stickers on the dealer's lot.
New car blue book value: This is the average selling price of the vehicle, taken from actual sales of the vehicle from dealers throughout the country. Often, there are regional price differences, due to variations in demand. A convertible in Seattle might be cheaper than one in San Diego.
Optional-equipment price: Want to know how much that optional sunroof will cost? Kelley Blue Book lists the price of certain options.
Kelley Blue Book Used Car Guide
Here's where you'll find the nitty-gritty on used cars, such as:
Retail value: This is the average listing price by dealers around the country. It's important to note that this is only the typical "asking" price on the vehicle, and that the actual selling price will usually be less. Sometimes a lot less. Because the retail value includes dealer costs such as advertising and sales commission, it will be higher than the private-party price.
Private-party value: Here's where you'll find an estimate of the price of a car if you were buying it from your next-door neighbor. Because an individual doesn't bear the burden of a dealer's overhead, this price will be lower than the retail value. Be aware, though, that the price isn't set in stone, since Kelley doesn't track all private-party used car transactions throughout the country.
Trade-in value: This is the typical price that a dealer would offer you for your used car. Again, this price is lower than what you'd receive from a private buyer.
The Online Experience
Kelley Blue Book has even more information, updated weekly. Here you can compare cars, check out safety ratings, read reviews, even shop classified ads and insurance carriers.
If you're looking at a new car, just go to the website and select the manufacturer, make, and body type of the car. The site will ask you to select your desired body trim and model year, as well as your zip code. It then shows pictures of your selection and tells you what's new for this year. It's simple and quick.
For used car information, you follow the same steps under the Used Car tab. It'll ask you what kind of price you want: retail, trade-in, or private party. Then you'll need to know the mileage and condition of the vehicle. Don't worry―a description is provided for each condition category. And if you still can't decide, fill out a condition quiz. Pricing information will appear, and you'll know how much to sell or buy your car for.
Still confused? The Kelley Blue Book site has an excellent Frequently Asked Questions page to help you figure things out.
Note that the site has information on cars sold only within the United States.
Remember, many factors influence the value of a vehicle. Use the information from these books as a guide, not as the final word.
You can find much of this information elsewhere too, such as at sites like Edmunds.com or the NADA Guide. But Kelley Blue Book and its associate website are the most well-known, and probably the most widely quoted, information source.