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The Automobile Blue Book
After hours of test drives and discussions with sales people you have finally found the used car you want. Now the negotiation process begins and you want the results in your favor, meaning you want the car for a fair price.
This is where the dealer will direct your attention to a printed price guide, usually the Kelley Blue Book, the version of the book that Kelley sells to dealers. The salesperson will look up the car you are shopping for in this book and will give you the, "retail" price for that car. Be prepared that it will be quite a bit less than what the dealer is asking. At this point you are supposed to rest assured that you're getting a fair price and a great deal. So, why negotiate any further?
But what is the "Kelley Blue Book" value he showed you? It is only an estimate by Kelley of the "listing" prices dealers are asking - not what they are really getting for the car. In other words, they are "suggested retail values." The actual selling price generally varies substantially. And in most cases, they are "substantially" lower than the listed price in the blue book. You can expect to pay a lot less for the car.
So how do you figure what the car is really worth? You can research it yourself on Edmunds.com which will give you the true market value of a car. This price is the estimated average selling price for your car, meaning it's what the dealer is actually getting for the car. And it's what you need to know to negotiate a fair price.
Dealers may also use the NADA Guides and Edmund's Automobile Buyer's Guides to quote car prices however, these are not near as popular.
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