What is the fair retail price for this vehicle?

Blue Book, Black Book, Yellow Book, what's with all these books????

With everybody having access to online resources in today's techno-rich world, there are numerous places for the average car shopper to educate themselves about the vehicle they are thinking of purchasing!

These resources can be fantastic tools to educate yourself and find a great car at a reasonable price! Some of the most common are Black Book /Kelley Blue Book and the  N.A.D.A Guide.  The information they provide can be vast and somewhat overwhelming.  For them to truly be useful they have to provide the answer to the question you are asking, which is normally “what is the fair retail price for this vehicle?”  Unfortunately, what these sites do is provide an average WHOLESALE price given some very specific scenarios.  Vehicle prices are regionally affected and if you have the only 2006 Acura RSX Type-S within 1,000 Km’s the supply is very low and the demand may be the opposite.

Here's the "but".....   You need to be able to use these tools accurately in order to benefit from them.  All of these guides have disclaimers along the lines of:

"Disclaimer
The trade-in value is presented as a guideline and each vehicle may require professional evaluation to arrive at a specific trade-in value. A trade-in value is lower than the retail asking price because it doesn't reflect a vehicle's reconditioning, repairs, cost of funds, and/or commissions required to sell the vehicle. We strongly suggest you use these prices as a guide only. This evaluation is a baseline range of value we would expect a dealer to give a consumer trading in a vehicle on the purchase of another vehicle, based on the dealer not seeing the car and allowing for worse case scenarios."

(http://www.canadianblackbook.com)


Many factors go into the pricing of a vehicle you find at a dealership, as in reconditioning costs so that that vehicle passes a safety inspection and will be reliable and safe for the next owners.  Advertizing costs, fuel, cleaning, incidentals that tend to occur over time, as well as a bit of "mark-up" are all items to be considered.

The "mark-up" of a vehicle has to be carefully calculated in order to provide for fair pricing depending on the market availability for a particular car, leaving some room for negotiations, and last but not least, the ability to allow the dealership to make a profit.

Dealerships are still a business, and are required to make money......there.....I said it.....it's out in the open! 

All the hard working people that have had their hand in making that perfect vehicle ready for you to test drive, from the sales-consultant that took it in on trade, to the mechanic that reconditioned it and made sure it was safe, to the detailer that got all muddy cleaning off the under-carriage; everybody has to make a living.

Using tools like Black Book ( which has been here for over 52 years now) are great, just remember that they get their wholesale pricing primarily from auctions, and those numbers may not reflect current conditions in your market.

Nada Guide: Blue-and-Orange/Yellow Book
"Spokespeople for the 74-year-old NADA guide (U.S. Only) say their book is superior to the others because the NADA book is the official data guide issued strictly for dealer members of the National Automobile Dealers Association (NADA) trade group, and it has access to totally exclusive data, such as dealer retail sales, and it analyzes additional data from more than 500,000 various points of sale and other market data.
They say the circulation of the NADA guide out-guns the competition by almost five to one. The wholesale and retail pricing listed in the NADA guide seems to be higher in some areas than Kelley Blue Book due to its present standard that all trade-ins be in very clean condition. Since "front line" might not accurately describe your vehicle, (only 5 percent of trade-ins or wholesale vehicles are) be prepared to adjust your expectations downward from what the NADA guide says." (http://autos.aol.com/article/best-blue-book)

"Kelley Blue Book (U.S. Only) has been around for about 81 years and rates cars in 4 main categories: Excellent, Good, Fair, and Poor.  They boast that one out of three people in the U.S. use Kelley Blue Book to help them buy new or used cars.  Again, they base their numbers on information gleaned from car auctions across the country and sets their wholesale costs based on cars that are "front-line" ready." (http://autos.aol.com/article/best-blue-book)

As you can see, there is a veritable cornucopia of information out there regarding cars!   Understanding that they all get their information in differing ways, and keeping in mind the market specific to your region and you should be able to inform yourself a bit before starting your new car journey!

Contrary to popular belief, dealerships are made up of people just like you and no one is out to "get" you.

The best advice I can give as a Transportation Specialist is this:   Find a vehicle you want to learn about, do some research, ask your friends and family who have bought a car recently if there is a sales representative that they are willing to recommend and are comfortable with, and try one out for yourself!   All dealerships should be happy to provide you with everything they know about a car, including any reconditioning work completed, and a Car-proof / Car-fax history report.   If you are going to use the vehicle in the real world, ask for a real world test drive!   If you plan to use it off-road, take it off-road!   All of these do not cost YOU anything, so relax! This process should be fun, not scary!

Matt Bourbeau
Transportation Specialist
McFadden Honda
matt@mcfaddenhonda.ca