Car Invoice Prices vs. Kelley Blue Book

January 27, 2012

Car invoice prices provide useful insight into a dealership's approximate cost for a new vehicle. Car invoice prices are the most accurate gauge of the fair market value when shopping for a new car. In this sense, invoice pricing explains the fair market value of a new vehicle in the same way Kelley Blue Book provides fair market pricing information for a used car. Remember that invoice prices are applicable only to new vehicle transactions, while Kelley Blue Book value is applicable only in used car transactions. This guide highlights some of the similarities and differences between invoice prices and used car book values. When you are in the market for a new vehicle, be sure to use a service like CarsDirect to get invoice pricing information on your vehicles of choice.

New Car Invoices vs. Kelley Blue Book: Similarities

Both new car invoice prices and Kelley Blue Book provide a way to calculate the fair market value of a vehicle. On new vehicles, an invoice provides information on the manufacturer's suggested retail price and the dealership's net cost for a vehicle. Remember that the invoice price is only an approximation of the dealership's cost. The true cost may be lower thanks to amounts like holdback and dealership cash. Holdback is paid to dealerships to offset normal costs of doing business like building maintenance and employee salaries. However, in the end, knowing about holdback can help you save money, as holdback allows a dealership to sell a vehicle at invoice and remain profitable.

Kelley Blue Book is similar in that it offers target pricing information for used cars. In a sense, the Kelley Blue Book trade-in value of a used car is equivalent to the invoice price of a new car, while the Kelley Blue Book retail value is equivalent to the manufacturer's suggested retail price on a new car. In any case, when negotiating with a dealership, you should try to get as close to the approximate dealership cost as possible.

New Car Invoices vs. Kelley Blue Book: Differences

The real invoice price on new cars does differ in some ways from used car Kelley Blue Book pricing. Remember that a new car invoice price is a set amount from the manufacturer. The invoice prices listed on a site like CarsDirect are the actual invoice amounts for each option on the vehicle. On the other hand, used car values are not set by a manufacturer; they are instead determined by the price that the market allows to be charged for a vehicle. While researching new invoice pricing on cars for sale can provide you with a definite price, it is impossible to calculate a dealership's cost on a used car. Remember that while a dealership may pay less than the trade-in value for a used car or truck, most used cars require reconditioning and detailing that can cost over $1,000. This makes it difficult to calculate the true cost of a used car.

Although new car invoices and Kelley Blue Book provide useful pricing information for car buyers, there are some differences in how each value is calculated. New invoices prices are set by manufacturers, while used car Kelley Blue Book prices are set by market conditions and the overall supply of a vehicle.


Related Questions and Answers

What is a Black Book Car Value?

Black book car value is an industry book that is mainly used by car dealers and other automotive professionals. The Black Book is a subscription based service that provides the same type of information that the Kelley Blue Book and the NADA Guides do. The subscription is fairly expensive, so the majority of non-professionals stick with Kelley Blue Book and NADA. The Black Book uses recent dealer auctions to set its prices, so in many cases the prices will not be as useful to private parties looking to sell their vehicles. The Black Book works in much the same way as the others, listing cars by the make, model and year. It gives pricing depending on the condition of the car.

Is the True Market Value of a Car Usually Lower than the Blue Book Value?

The true market value of a car is often lower than the Blue Book Value. This is mainly due to the fact that most people rate the condition of their vehicle higher than it actually is, or at least higher than the market would. Very few cars would fall into the excellent shape category. In addition to this, the market changes on a daily basis while the Blue Book is updated periodically. Finally, the value of the car will vary depending on how many other similar vehicles are being offered for sale. The city or town you live in will affect pricing as well.

Which Car Book Value Estimator is the Industry Standard?

The car book value estimator that is the industry standard is The Black Book when you are talking about car dealer or professionals in the industry. The general public tends to be more familiar with Kelley Blue Book and the NADA Guides. The Black Book is a subscription-based product which is generally not used by the public. The NADA guides and Kelley Blue Book are available online and in print form. They are easy to use, and the online version is free, which is why the public tends to prefer these two guides. They all provide fairly accurate pricing information and can be quite helpful when buying or selling a car.

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