From Black Book to Blue Book
Reese went to trade in his truck and was told by the dealer that they use the Automotive Black Book. Reese has never heard of it and wonders if it's another "gotcha" from the dealer. Dave breaks it down for him.
QUESTION: Reese in Oklahoma went to trade in his truck and was told by the dealer that they use the Automotive Black Book. Reese has never heard of it and wonders if it’s another “gotcha” from the dealer. Dave breaks it down for him.
ANSWER: The Automotive Black Book is another valuation system for valuing cars. Kelley Blue Book is more for the consumer to get a hold of the information. The Black Book is usually used by dealers. The Black Book is usually a culmination of values from the dealer auctions. It’s dealer price that dealers buy from other dealers at the auction typically.
I think Black Book probably also runs a retail, and they probably run a wholesale. And there’s another book—the NADA book—which is the yellow book that’s out there. I guess they still print that.
When someone would say something like that to me, I would just say, “So? This is what I want for the car. If you want to do the deal, this is our price. You can use a black book. You can use a green book. You can not use a book. This is my truck, and this is what I’ll sell it for.”
But it is a legitimate valuation system. It’s more for dealer to dealer than it is for trade-in value-type stuff—wholesale value—than it is for what a consumer can sell to another consumer like if you listed your truck on Craigslist.
Kelley Blue Book, you can look up trade-in value, loan value and wholesale value, but the private sale value is more of an accurate, quasi-consumer-to-consumer value. That’s the idea there. The idea here is we’re just trying to gather information to have an accurate valuation of the truck. “This is what I’m willing to accept for the truck because I can sell it for this according to Kelley Blue Book. So if you don’t want to take it as a trade, then we don’t have a deal.” And you’ve got a good reason to walk away at that point.