Buying a vehicle can be a complicated and involved process, not the least of which is making sure that you don’t pay more for the vehicle than necessary. You want to get it for the best price possible, but how do you do that?
The Kelley Blue Book price is one method consumers can use to determine a fair purchase price. But what, exactly, is the Kelley Blue Book price?
According to Kelley Blue Book, for new vehicles, this is the Kelley Blue Book Fair Purchase Price, which is “the price people are typically paying a dealer for a new car. This price is based on actual new-car transactions and adjusted regularly as market conditions change.”
You find the Kelley Blue Book price by going to their website, www.kbb.com and plugging in the year, make, model and other details of the vehicle you’re looking to buy, such as engine, transmission, features and options. After inputting all the data, the site returns the estimated fair purchase price – the price that dealers have actually been selling the vehicle for in the area.
What if the vehicle you’re in the market for doesn’t have a Kelley Blue Book price when you do the lookup? Here’s what Kelley Blue Book says: “Since the Fair Purchase Price is based on actual transactions, some vehicles are too new to establish a history, others have low current dealer inventory, and still others have low sales volume overall.” KBB promises to publish a Fair Purchase Price as soon as there are enough actual transactions for the calculation.
Note that the Kelley Blue Book price is not the same as the dealer asking price. Dealers have a version of Kelley Blue Book that they use that shows the Kelley Blue Book asking price – the price dealers typically ask for when selling the vehicle.
As a consumer, arm yourself with the best information possible on the new vehicle you want to buy. You never want to pay the manufacturer’s suggested retail price (MSRP), what the manufacturer recommends the dealer sell the car for. Dealer invoice is the price the dealer pays the manufacturer for the car, not what he’ll try to sell it to you for. Where you want to be is the Fair Purchase Price – which is less than MSRP and may be less than dealer invoice.
Maybe a used vehicle is more in line with your budget. Here, Kelley Blue Book has a tool to help you find used-car values that can give you a better idea what you can expect to pay.
Input the year, make and model of the used car you’re interested in. Add any features or options you want. The search returns three prices: dealer, private party and certified pre-owned trade-in values.
Private party is the amount a consumer can expect to pay when buying a used vehicle from a private party.
Suggested retail (dealer price) is a value that is representative of dealers’ asking prices for a used car. This is a starting point for negotiations between the consumer and the dealer.
Certified Pre-Owned is the value that is representative of dealers’ asking prices for a used car covered by the automaker’s CPO program. Again, this is a starting point for consumer-dealer negotiation.
If you are selling a used vehicle, after inputting year, make, model, mileage, style, features and options, the applicable Kelley Blue Book tool returns private-party and trade-in value.
The private-party value is what you can ask for your vehicle when you sell it yourself. The values returned are for excellent, very good, good and fair condition. According to KBB, 3 percent of used cars are in excellent condition, 23 percent in very good, 50 percent in good, and 18 percent in fair condition.
The trade-in value is what you can expect to get from the dealer when you opt for this method of selling your car. Again, the values returned are for vehicles in excellent, very good, good and fair condition and the same percentages of used cars in such condition apply.
Bottom line: buying or selling a vehicle can be a lot easier if you check out Kelley Blue Book prices before you get too far into the deal.