Can I Pay Less Than Blue Book?

Besides a home, your car is usually the most expensive thing you own. Naturally, when you buy a car, you want to get the best deal. Kelley Blue Book is one of the most popular and trusted buying guides. It offers insight on a vehicle’s performance, specs, and market pricing.

But can you pay less than the Blue Book price? We’ll walk through how Blue Book determines prices, and strategies for negotiating the best deal, whether you’re buying a new or used car.

Can I Pay Less Than Blue Book?

The short answer is yes, you can often pay less than the Blue Book price for a car, but not always. When you’re shopping for a car, the Kelley Blue Book (KBB) price is a good starting point, but it’s not the be-all and end-all. As you prepare to negotiate, it’s helpful to know how Blue Book determines its prices.

How Blue Book Works

A number of factors go into the Kelley Blue Book price for a vehicle. These include the vehicle’s make, model, year, manufacturer’s suggested retail price (for new vehicles), and typical mileage (for used vehicles). Blue Book also analyzes real-world car prices, industry developments, economic conditions, and vehicle prices in your location.

On the KBB website, you can input details about the vehicle you’re looking to buy — for example, make, model, year, mileage (for used vehicles), your location, and optional specs (like trim or color). Then, Blue Book will give you a market range and a fair purchase price for the vehicle. This is what you can reasonably expect to pay, excluding taxes and fees.

That said, a dealer or private seller might price the car higher than the Blue Book range, with good reason. For example, if the vehicle is in low supply or you want hard-to-find options, expect to pay more.

By the same token, you might find a vehicle priced below market value. Sometimes, sellers use low prices to conceal major issues with the car. But a low price isn’t necessarily a red flag.

Excess inventory can drive prices down, or a private seller might need to get a vehicle off their hands before a move. Always test-drive a car and schedule a pre-purchase inspection with a mechanic before buying a used car. Sure, the seller might want to sell the car to unsuspecting car buyers, but the higher prices may not be worth even the Kelley Blue Book offering.

How to Negotiate Lower Than the Blue Book Price

Once you know Kelley Blue Book’s price for the vehicle you’re interested in, the following strategies can help you negotiate a better deal.

1. Do your research and negotiate. Kelley Blue Book’s prices often favor dealers, so negotiate down from there. Similar guides also offer vehicle pricing, such as Edmunds, the National Automobile Dealers Association, Consumer Reports, and J.D. Power. Check the vehicle’s price with other sources, and bring these numbers to the negotiation.

2. Use the trade-in value as a target. If you’re buying a used car, use Blue Book and other sources to research the car’s trade-in value. This gives you a sense of what the dealer paid for the vehicle and what it’s worth currently. When negotiating, try to get as close to the trade-in value as you can. It’s unlikely you’ll buy the vehicle for its trade-in value (after all, dealers and sellers need to make a profit), but it can serve as a helpful target in negotiations.
3. Look up the vehicle’s invoice price. When buying a new car, use Blue Book and similar sources to look up the vehicle’s invoice price — this is how much the manufacturer charges dealers for the vehicle. Keep in mind that the invoice price doesn’t include fees or advertising the dealer paid, or any factory-to-dealer discounts. Get an idea of what others are paying for the same car by researching the average transaction price of the vehicle in your area. The invoice price gives you a sense of what to aim for in negotiation, while the average transaction price is closer to what you’ll actually pay.
4. Pull out the KBB in private sales. With private sellers, consumer bias can skew the price of a vehicle. In other words, people tend to think their car is in better condition and worth more than it is. When buying from a private seller, show the seller Blue Book’s car condition definitions compared to the actual condition of the car.
5. Get the car inspected. Just as you’d test-drive a car, it’s common and reasonable to have a mechanic inspect a used car before you buy it. Once you’re serious about a car, schedule a pre-purchase inspection with a mechanic you trust. This typically costs $100 to $200, and it’s worth it. The inspection can reveal mechanical issues you wouldn’t catch in a test drive, or provide assurance that the car is in good condition. You can also use the results of the inspection to negotiate a lower price. If a seller hesitates when you ask to schedule a pre-purchase inspection, consider it a red flag.¹

6. Know what you don’t know. If you’re trading in your old car, know that dealers usually don’t use Blue Book’s prices to determine the trade-in value. Rather, they rely on the National Auto Research’s Black Book or the Manheim Market Report, neither of which is publicly available. Unfortunately, both of these sources tend to skew lower than KBB for trade-ins, so be prepared. Ask for the source of the dealer’s trade-in offer, and use the Blue Book value to negotiate up.

Once you buy your car, congratulate yourself on a job well done. The next step is to insure your new purchase. Check out our lineup of the best auto insurance companies. After the expense of a down payment, maybe you want to save: Look no further than our list of the best cheap auto insurance options.

Can I Get a Car for Less Than MSRP?

“MSRP” stands for “manufacturer’s suggested retail price.” The term “MSRP” is often used interchangeably with “sticker price,” though technically a vehicle’s sticker price may include fees on top of the MSRP.

Low inventory means MSRPs are at an all-time high. Recently, the average price of a new car reached a record $46,000.² In some cases, buyers are actually paying over the MSRP for new cars.

However, you may be able to pay under MSRP. For example, dealers are often willing to accept lower offers for discontinued models and slower-selling vehicles.³ Of course, it helps to do your research. Before buying a new car, look up the price in Blue Book and other sources, and bring those numbers to the dealer.

Shop around different dealers in your area, get quotes, and consider offers. When negotiating with a dealer, without getting too specific, tell them you’re weighing other competitive offers. These tactics can help you negotiate and drive the price below the MSRP.

Once you’ve bought a new car, you’ll want to protect yourself financially with quality auto insurance. Check out our roundup of the best auto insurance for new cars.

Recap

Spending money on a new car is stressful, but the strategies you’ve learned will help you save money. For more guidance on navigating auto insurance, check out our article on how to get car insurance.

Already own a vehicle in addition to the one you bought? Find out how to add vehicles to an auto insurance policy. For your other questions, head over to our auto insurance FAQs.