Index for Insanity, Inc.
Education on Blue Book Value
Ok, enough is enough. While many people don't understand the concept of the "blue book value", when false information is given on a TV show (The People's Court: Monday, January 4: "A drunk drivers pity party plea"), the information needs to be corrected.
Judge Milian showed that she clearly does not understand the concept of a guide nor of blue book value. She is trapped in a little box and can't get out and does not know what she is talking about. I am sure that she would claim that she has experience in this area and knows better than someone who calls her on this. There are many examples of her not knowing the reality of situation, yet thinking that she does. This is just one specific example of a judge who think that they know what they are doing. While Judge Milian is currently a TV judge, she is an attorney and comes from the legal system which should know better, but has convinced themselves that they know everything. The claim was made that there is nothing above "excellent", which was true, is completely off the mark. The guide is to give a good start at determining the value, but all other aspect have to be taken into account. A new engine adds value. In some cases, an older vehicle might be worth more parted out since items like tires could exceed the value of the vehicle. If someone were to completely restore a vehicle, the value is increased, regardless of whether it is a common vehicle or not.
The problem is that judges and insurance companies are lazy and want simple and easy answers. Due to this, people need to know to push the issue and point out that the blue book value is just a guide. It does not include taxes and other expenses which will be incurred if you were to be forced to replace a vehicle. It does not include custom or added value items and it does not take into account the real value of the specific vehicle.
Take a look at the names used: "Kelley Blue Book Official Guide", "NADA Appraisal Guides", etc. I am sure that there are more out there, but those are the ones that I know about. Notice that both include the word "guide".
Now, go look at the dictionary to see what the word "guide" means:
The first definition "to assist (a person) to travel through, or reach a destination in, an unfamiliar area, as by accompanying or giving directions to the person: He guided us through the forest. " gives a good idea of what a guide is and also what it isn't.
The next thing to do is to look at the FAQ. For example, from KBB.com:
11. What about the value of equipment on my car that you don't have listed? There are some options (e.g. alarm systems, heated seats, trip computers) that are not addressed on our site. These are items that do not have a consistent or reportable added value in the used marketplace. That is not to say that such options are worthless as they may make your vehicle more marketable against similar models; however we do not address options when there is not a consistent value to report.
7. I bought a new car a few months ago and I would like to check its used value. Why isn't it listed? Kelley Blue Book reports vehicle values by analyzing actual transactions in the market. We do not believe in using arbitrary formulas to predict prices because our promise is to report dependable values, not set prices. It can be difficult to establish used values on newer vehicles if we have not seen enough transactions in the required amount of different markets to establish dependable values on these vehicles.
18. My car is in good condition, but has a "salvage" title. How does that affect the value? A salvaged, reconstructed or otherwise "clouded" title has a permanent negative effect on the value of a vehicle. The industry rule of thumb is to deduct 20% to 40% of the Blue Book value, but salvage title vehicles really should be privately appraised on a case-by-case basis in order to determine their market value.
Please note the highlighted sentences. Clearly, the purpose of the guides are to assist in trying to determine an approximate value, but it is not 100%.
Index for Insanity, Inc.
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