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What Is The Blue Book Value Of My Car?
When you’re thinking about selling your car, you will need to know how much its worth to be able to know what to ask for it.
This is true for both private sales and when you are considering trading it in at a dealership against the cost of a new car.
For nearly a century, both the auto industry and the general public have been using the Kelley Blue Book to value vehicles. What exactly is the Blue Book and how do you use it in valuing your vehicle?
What Does “Blue Book Value” Mean?
The term Blue Book Value is the value of your vehicle as listed in the Kelley Blue Book guide.
Since the 1920s, the Blue Book has been used as an auto industry standard in the US when it comes to auto valuation. It covers everything from cars to motorcycles, trucks, and vans.
A new updated version of the whole book is released every year while many aspects of the Blue Book are updated much more regularly.
A Brief History Of The Blue Book
The first Kelley Blue Book came out in 1926.
Named the Blue Book simply due to the color of its printed cover, it is now synonymous with auto pricing standards in the industry.
Many customers use the Blue Book Value to help guide them in knowing how much they should buy or sell their car for.
It can help by giving you an objective measure by which to put a value on a vehicle.
What 3 Values Does The Kelley Blue Book Give?
There are three different types of value given in the Blue Book for every vehicle.
- The Trade-In Value. This is the figure that you should be looking to get when you sell your car to a dealer.
- Private Party Value. When selling your vehicle privately, this is the amount you should expect to receive from the buyer.
- Retail Value. This is the amount that you should expect to pay for your vehicle if bought at the dealer.
How is The Blue Book Value Calculated?
The Kelley Blue Book Value takes into account a number of variables when deciding what the Blue Book value should be.
Some of these values include:
- The body style of the vehicle
- Manufacturing year
- Transmission type and engine size
- Any custom detailing
- General condition
Most vehicles can expect to see a 15 – 20% depreciation in value with every year that passes.
The Blue Book Value will help to show which vehicles depreciate more quickly than others and why that is. This is useful information when deciding what vehicle you should buy.
How Do I Value My Own Car?
If you simply type a search into Google asking, “how much is my car worth?” you are going to receive a number of answers which all give you a different price.
The easiest way you can value your car is to use the fair purchase price calculator on www.KBB.com
Once you give it a few pieces of information, it will come up with a value for you.
It will offer you two different values: the Private Party Value and the Trade-In Value which will be different amounts for the reasons explained below.
Terms You Need To Be Familiar With
When you’re looking to value your car, you’ll be faced with several different values and a few important terms.
Here’s a quick overview of the terms you’ll find and what they mean:
- MSRP. This is the manufacturer’s suggested retail price. It’s the price manufacturers suggest to dealers that they should charge for a particular vehicle.
- Transaction Price. This is the total selling price of a new or used car – without tax. This is the amount a buyer agrees to pay for a vehicle.
- Invoice Price. The invoice price is the figure that the dealer paid the manufacturer for the car. It is sometimes referred to as dealer cost because a dealer will often make some money back on the invoice price through rebates and incentives.
- Wholesale Price. When the car is pre-owned, this is the amount of money a dealer paid the previous owner for it. A dealer will always be looking to make money on the wholesale price.
What’s the difference between a Private Party Value and a Trade-In Value?
When you ask KBB (Kelly Blue Book Value) to value your car, it will give you two different values: Private Party Value and Trade-In Value.
A Private Party Value is the price you should be looking to get for your car when you’re selling it privately instead of to a dealer.
Trade-In Value on the other hand is the value of your car when you’re looking to sell it to a dealer.
Neither of the above are amounts that are set in stone, but it should help to give you an approximation of what a fair price looks like for the sale of your car.
The Trade-In Value is always going to be lower than the Private Party Value.
A dealer will be looking to buy your car from you and then sell it on at a profit to a third party.
They will therefore be looking to offer you a lower amount to ensure there is a big enough profit margin.
Many people feel taking the Trade-In Value is worth it even though it is a lower price. This is because it simply saves the hassle of navigating a private sale.
How is the Blue Book Value Calculated?
The Kelley Blue Book gathers data from lots of different sources. It then uses this data to decide on the values it publishes – updating the figures on a weekly basis.
This data is dependent on a number of factors including:
- Dealer sale prices
- Auction prices
- Seasonality and market trends
- Geographic regions
The Blue Book Value – A Conclusion
When you’re considering selling your car, the Kelley Blue Book value is a useful place to start when putting a fair price on your vehicle.
It has been in circulation for almost a century and uses a wide range of data to calculate a price that is as accurate as possible.
Whether you’re looking to trade in your car against the price of a new one or are selling privately – the Blue Book Value will help you to get the best price you can from the sale.