There are three different tools that car dealerships and you, the potential buyer or seller, can use to figure out the right price to pay or ask for. You’ll hear dealer come-ons like “Blue Book pricing!” or, “We’re selling below Blue Book!” or, “Get true Blue Book value for your trade-in!” But what does “Blue Book” even mean, and in what ways do these tools cost or save you money?
The Kelley Blue Book is one of the major guides for vehicle buying and selling. But there are two other such guides. The three formerly offered vehicle pricing information in print but have long since been available primarily via the internet, and their valuations can be accessed by a varied assortment of online communicators, including – of course – Autoblog.
What, actually, is a Blue Book? Who creates these pricing bibles? What are the car value guides besides Kelley? How accurate are they, and how do they arrive at their values? Does a Blue Book provide truly valuable information to help you get the best deal, whether you’re buying or selling new or used? And how do you know which one to go by? Read on.
Kelley Blue Book
As suggested by a KBB.com spokesman, “With 90 years of trust in providing the auto industry with data and several decades of providing car shoppers with valuable information, Kelley Blue Book’s KBB.com allows consumers to become the experts on their purchase, helping fuel definitively smart auto choices with editorial reviews, pricing tools, consumer ratings and more.”
Notable, also, is the intuitive nature of the value search, and a trade-in range that seems more optimistic than that offered by Black Book. Kelley Blue Book, with more than 20 million unique visitors each month, promotes itself as offering “the largest new and used car audience online.”
Kelley Blue Book has historically collected its information by attending auctions throughout the country — these are the places where wholesalers and dealerships trade in used vehicles. It also gathers data from independent dealerships representing automakers. It rates its used car evaluations as Excellent, Good, Fair and Poor. From those, Kelley Blue Book then sets value ranges for cars sold by private party, dealership suggested retail, trade-in values, and values for certified pre-owned vehicles. Within these value ranges, KBB will set out a Fair Purchase Price.
NADA Guide: The Yellow Book
The NADA Guide is owned by J.D. Power & Associates. It uses many of the same information sources as KBB does, but each has its own proprietary formula for setting values. A spokesman for the NADA Guide supplied us with this overview:
“NADA Used Car Guide begins its valuation process with data collection, grouped generally into two categories: transactional data and market data. Transaction data gives us an indication of what vehicles are currently worth through several different sales channels. Market data also comes in through multiple sources and concerns economic factors that include fuel price, employment figures, interest rates and incentive data, among others. Analysis of market data gives us an idea of what the auto market will look like in the future.
“Like other vehicle value providers, NADA Used Car Guide publishes different value types that represent values through different sales channels. Our retail values are intended to represent the sale price of a clean vehicle at a car dealer. Our rough, average, and clean Trade-In values are intended to represent typical prices of trade-ins at various conditions. We also publish a Loan value to help lenders establish a baseline amount of credit to extend on a vehicle purchase. All these value types are published monthly and with them we make every effort to reflect real price movement in the marketplace without including inherent random market volatility.”
Black Book
Now under the Hearst publishing umbrella, a Black Book spokesman offered this:
“Black Book® is best known in the automotive industry for providing timely, independent and accurate vehicle pricing information, and is available to industry-qualified users through online subscription products, mobile applications and licensing agreements. A leading provider since 1955, Black Book has continuously evolved to ensure that it achieves its goal of delivering mission-critical information to its customers, along with the data analytics necessary to successfully buy, sell, and lend. Black Book data is published daily by National Auto Research, a division of Hearst Business media, and the company maintains offices in Georgia, Florida, and Maryland as well as the Canadian Black Book in Toronto.”
The key thing to remember is that it’s a subscription service used by dealerships, so as an individual car buyer or seller you likely do not have access to it.
Which one is most commonly used?
According to Lynn Faeth, referring to the used car operation of his nationally-noted The Scout Connection dealership in Fort Madison, Iowa, “I use the Kelley Blue Book and the Black Book for used car valuation. But the Black Book CPI (a guide for older, special interest vehicles – ed.) is my mainstay in determining the true value of any rare or unusual vehicle which I buy or sell.”
Seconding Faeth’s comment is John Gorton, the manager of Gerton Auto Sales, a large, successful used car enterprise in Mt. Vernon, Indiana, “I use the Black Book — the electronic version — exclusively in my operation, because its used car pricing seems to be more accurate and up to date.”
“The system I use,” added longtime Southern California car salesman Roger Himmel, “combines checking value of a trade-in or used car purchase in Kelley Blue Book and the NADA guide, then telephoning wholesalers or other dealers to see what the value is to them. After all, for everything I buy I must then find a buyer.”
An example of how KBB, NADA Guide and Black Book compare
We took a look at two cars, a 2013 Subaru Crosstrek and ’06 Jeep Grand Cherokee, to see how the guides compared.
On the Subaru, Black Book supplied the low ball, suggesting a trade-in range of between $12,800 and $15,600. Kelley Blue Book gave a range of between $17,777 and $19,100, while NADA was essentially identical, between $17,150 and almost $19K.
The Jeep range of estimates was more narrow. Black Book suggested a trade-in range of $5,500-$8,215, NADA suggested $7,600-$8,450, and KBB – using ‘Excellent’ in the condition report – was $5,500-$7,685.
Depending on the details of whatever vehicle you look up, the book values might come out in an entirely different order.
So, which ‘Blue Book’ gets you the best deal?
There is no single, definitive source for vehicle sales information. All three books are good, dependable, honest sources of information, some better than others for specific vehicles or markets or needs or purposes.
Therefore, when it comes to buying and/or selling a new or used vehicle, it’s important to cross-reference, to triangulate, your information sources. Use a used car classifieds search on Autoblog or other sites to gather comparable vehicles currently on the market, check and compare the book values, and use your judgment to inform your negotiation and purchase — and remember, the “Blue Books” are simply guides.
Source: www.autoblog.com