The Blue Book or Kelley Blue Book is a definitive guidebook that compiles and quotes prices for new and used automobiles, encompassing all makes, models, and types. Established in 1926 by Los Angeles car dealer Les Kelley, the Blue Book was initially exclusive to the automotive industry. However, by the 1990s, both consumer and online editions were introduced to the general public. The Blue Book provides a fair market range highlighting the anticipated price spectrum car buyers will pay for a particular vehicle based on its make, model, style, and year.
Key Takeaways
- The Blue Book, recognized as Kelley Blue Book, is a highly acclaimed reference for automotive price quotes in North America.
- It offers insights into car prices, reflecting what buyers and sellers pay for vehicles of similar make, model, year, and mileage.
- The Blue Book details various values such as private party value, trade-in value, suggested retail value, and certified pre-owned (CPO) value for used cars.
- It aids car buyers in understanding potential future ownership costs, like those for fuel, maintenance, repairs, and insurance.
Understanding the Blue Book
The Blue Book has become the premier appraisal guide for vehicle prices in North America. Both car sellers and buyers refer to the Blue Book to gauge the resale value of used cars. It also provides actual cash values for vehicles, useful for insurance assessments and negotiations post-wreck.
The Blue Book evaluates private party value, trade-in value, suggested retail value, and certified pre-owned value for used cars, also revealing current consumer prices for new vehicles. Over the years, Blue Books have extended beyond cars to include motorcycles, travel trailers, campers, ATVs, snowmobiles, and manufactured housing.
How Blue Books Are Used
Blue Books display automotive prices others have paid—the fair purchase price—to assist buyers and sellers of automobiles of similar make, model, year, and comparable mileage. Moreover, Blue Books can project anticipated costs associated with vehicle ownership, ranging from fuel, maintenance, repairs to certifications like insurance. They also outline expected depreciation over time, offering a comprehensive view of future costs extending five years from the acquisition date.
How the Blue Book Determines Car Prices
The Blue Book’s listed fair purchase price is based on the prices other consumers typically pay for the same vehicle and is adjusted for regional differences where transactions occur. Prices are periodically updated to reflect market changes.
Rather than showing the lowest market prices, the Blue Book reflects the current market rate a vehicle typically sells for. The prices derive from extensive data on consumer vehicle purchases, combined with national vehicle registration database information. Weekly, Kelley Blue Book processes these data points using a proprietary algorithm that considers pricing trends, locality, time of year, and economic conditions to generate its value ranges.
Special Considerations
Originated by the Kelley Blue Book Company, which later became a part of AutoTrader.com and Cox Automotive, the guidebook can be mistakenly confused with unrelated blue books like the Social Security Blue Book listing disabling conditions.
In addition to the Blue Book, several other resources are available for car price research. J.D. Power and Consumer Reports provide comprehensive data on new car prices, used car book values, and vehicle history reports. Prospective buyers relying on a loan to finance a vehicle purchase should also consider using an auto loan calculator to assist in financial planning.
Related Terms: fair market value, automotive industry, trade-in value, vehicle depreciation, auto loan calculator.
References
- Kelley Blue Book. “History”.
- Kelley Blue Book. “Frequently Asked Questions, New Car”.
