Q: What is Blue Book Value?

December 17, 2013 12:53 PM

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The term "Blue Book Value" refers to the value of a vehicle by a guide known as the Kelley Blue Book. The guide not only lists the value of new vehicles, but it also lists used car values. Since the 1920s, the Kelley Blue Book has served as a standard within the auto industry in the United States. In addition to values for vehicles, the guide has also covered values for snowmobiles, motorcycles and personal watercraft. The guide is updated annually.

There are three different values provided in the Blue Book Used Car Guide. The trade-in value is the amount you can expect to receive from a dealer when trading in a used vehicle. The private party value refers to the amount you can expect to pay when purchasing a used vehicle from a private individual. The retail value refers to the amount you can expect to pay at the dealer.

At KBB.com, you will also find three different types of new-car values provided. The manufacturer determines the manufacturer's suggested retail price (MSRP). This means the dealer can choose to offer the car at a price that is above or below the MSRP based on the marked conditions in the local area. The dealer invoice, or invoice price, refers to the amount the manufacturer actually charges the dealer for the new car. The Kelley Blue Book Fair Purchase Price indicates what buyers are paying for a specific car. This value is based on reported transaction information from dealers across the country.

A number of factors are taken into consideration when determining Blue Book Values for used cars. Such factors include the body style of the vehicle and the year in which it was manufactured, as well as features such as transmission type and engine size. Custom details and options available on a particular vehicle can also affect value. General condition and mileage will also affect the amount of car depreciation. In general, most vehicles depreciate at a rate of between 15 and 20 percent per year. Some vehicles are able to hold their value better than others because they are more in demand by buyers. The Blue Book Value can help you to determine which vehicles hold their value better in the long-term.

The Kelley Blue Book was first produced in 1926. It has come to frequently be referred to simply as the Blue Book simply because the guide has a blue cover. Being aware of the Blue Book Value of a vehicle can be particularly beneficial if you are interested in either selling or buying a car. If you are trading in a vehicle to a dealer or if you are planning to sell a car privately, the Blue Book Value can provide you with an objective measure of the vehicle's value. It can also provide the basis for initial negotiations. If you are planning to purchase a used car either from a dealer or a private party, the Blue Book Value can help to ensure you do not overpay for the vehicle. And if you are in the hunt for a new car, be sure to check out the Kelley Blue Book Fair Purchase Price here at KBB.com to see what folks in your zip code area are paying.

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