Kelly Blue Book Values
Kelly Blue Book Explained
When you're shopping for a new or used car, first get your financing
pre-approved. Then use the Kelly Blue Book to zero in on pricing for your
choice of make, model, and options.
The best place to get your car loan pre-approved at the best rates
is E-Loan.
Once you know what the Blue Book value is, you can negotiate
your best deal. It's much easier to negotiate as a cash buyer
because you can avoid getting suckered on financing since you already have your loan
check in hand.
Read our Car Buying Tips
and Negotiating Tips
articles for more information on the best way to buy a car.
What Kelly Blue Book values are available?
Kelly Blue Book Private Party Value
This is a value, adjusted for condition, reflecting what a consumer
might expect to pay for a used car when purchasing from another
private party or what a seller might expect to get for the sale of a
used car from a private party.
Kelly Blue Book Trade-In Value
This is a value, adjusted for condition, reflecting what a consumer
could expect to receive from an auto dealer in trade for a retail
vehicle.
Kelly Blue Book Suggested Retail Value (MSRP for Used Cars)
This value represents the amount an auto dealer might ask for a
specific vehicle for sale to a consumer at the dealership.
This value assumes a fully reconditioned vehicle in excellent
condition and is a "starting point" for negotiation just like a new
car sticker price.
NOTE: Dealerships must bring the vehicle up to minimum safety
standards and most dealers also refurbish mechanically and
cosmetically prior to selling.
New Car Blue Book® Values
The New Car Blue Book value reflects a vehicle's actual selling
price and is based on tens of thousands of recent real sales
transactions from auto dealers across the United States.
The New Car Blue Book value is not calculated or based on a
proprietary formula; instead it is derived from actual new vehicle
sales and extensive knowledge of the marketplace.
The Car Buying Market Today
To gain some perspective on the overall car market in the US, each
year, approximately 213 million cars drive the streets of America.
As for vehicle that are purchased annually, here are some
interesting observations:
- Out of all the vehicles purchased in the USA each year, 16 million
are new and 41 million are used.
- Of all the used vehicles purchased by consumers:
1) one-third are from private parties
2) one-third are from franchised dealerships
3) one-third are from independent dealers
- 17 million used vehicles are sold to auctions each year.
When you think of other industries that deal in new and used
valuations such as real estate, antiques, art, musical equipment,
high-end sporting equipment—what differentiates the car market is
the nature of the constantly changing condition of cars, which
quickly depreciate with use.
Another frequently overlooked fact is that cars being sold at
dealerships must meet basic safety standards to make the unit ready
to sell such as working brakes, lights, etc.
These standards are not, however, factored into a private party
sale, therefore the values for private party are usually lower than
retail. Additionally, there are no standards placed on private party
cars and they do not face the legal liabilities that dealers
experience.
How Does Kelly Blue Book Get The Values?
Beginning with the basic new vehicle information from the
manufacturer, Each and every day, Kelly Blue Book receives
information on both new and used car purchases.
The following sources make up the bulk of a typical year in used car
purchase information and feed the base of data our experts analyze:
Wholesale Auctions
Open exclusively to the trade, representatives from dealerships and
wholesalers bring vehicles to the auction to trade or sell and they
purchase other vehicles they think will sell at their store.
Auctions receive their vehicles from dealers, rental agencies, fleet
owners, off-lease vehicles owned by financial institutions and
manufacturers' demos and promotional vehicles.
Kelly Blue Book representatives audit these auctions on a regular
basis to gather a better understanding of what the highest possible
"actual cash value" of a given used vehicle will bring at auction.
Independent Dealers
These are the dealerships you see every day that are selling used
vehicles only. These dealers sell used vehicles to auctions,
consumers and wholesalers.
Franchised Dealers
These are specifically branded new car dealerships authorized by the
respective manufacturer such as Honda, Ford, etc. These dealers sell
used vehicles to both auctions and consumers.
Rental & Fleet
Rental fleets usually send their cars to auction after one year of
service, but have extended that usage in recent years.
Original Equipment Manufacturers
The manufacturers (such as Honda, Ford, etc.), bring used vehicles
to auction after they have utilized them as employee cars,
promotions or other company distribution.
Financial Institution Lessors
When you lease a car, the bank owns it and you rent the use of the
vehicle. After the term of the lease is complete, these pre-owned
vehicles are either sold back to the lessee or directly to a dealer
at auction.
Financial institutions also trade and sell repossessed
cars and trucks.
Consumer Private Party Transactions
Kelly Blue Book tracks consumer sale prices each year.
How are the final values determined?
Used values are determined by a proprietary editorial process. This
process starts with a thorough analysis of all collected data along
with historical trends, current economic conditions, industry
developments, seasonality and location.
The resulting values reflect the most current representation of a
changing marketplace and are therefore relied upon by a variety of
leading organizations as well as the average consumer.
A Brief Blue Book History
Since 1918, when a young preacher's son named Les Kelly opened his
used car dealership in Los Angeles. Kelly began creating a list of
used cars he wanted to purchase from neighboring dealers.
Now, Kelly Blue Book values have been recognized as the de facto
standard in America. Today, no other pricing guide is as accepted
and trusted by both consumers and the automotive industry.
Kelly Blue Book began its valuation service to fulfill a need for
used car pricing information by the banking and insurance
industries.
Loan givers needed to evaluate the value of the collateral on used
car auto loans and insurance companies needed replacement values for
insured vehicles.
Blue Book values soon became so widely accepted that even the US
government used them to place a ceiling on car prices after World
War II. At this point, dealers nationwide began subscribing to the
Blue Book on a regular basis.
Kelly Blue Book existed mostly as a "trade" publication for decades.
And other than paying a visit to the local library, car-buying
consumers did not have access to Kelly Blue Book values until 1993
when the Consumer Edition of the Blue Book was offered.
Now, Kelly Blue Book values are available in both
industry and consumer published books and on the Internet at
Kelly Blue Book
- the #1 automotive site in the nation.
Remember the golden rule
The car dealer is just a middleman when it comes to car financing.
Don't pay a higher price for you car loan than you have to. Get it
from the best source.
Use E-Loan BEFORE you shop
And don't forget the most important point. Don't buy a car based on
the payments.
Line up your financing before you shop for your car.
And remember, you can get pre-approved for your auto loan anytime at
E-Loan.
That way, you can focus on getting the best purchase price because
to the seller, you're a cash buyer.
Related Pages
Buying A Used Car - Used car buying tips - How to get a great deal on a used car - Auto loan and car finance tips plus the best auto financing rates.
Car Buying Tips - How to buy a car without getting ripped off - Negotiate separately for the price of the car, the value of your trade-in, and your car loan.
Auto Loans - How to get the best auto loans - Car loan finance tips - Auto loan calculators - Best sources for lowest auto financing rates.
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