11. What is “Book Value”?

“Book Value”, in relation to automobiles, is value guides published listings (in print, data and/or Internet) and pricing of automobiles provided by independently owned and operated auto valuation organizations such as the National Auto Dealers Association (a.k.a. NADA) and Kelley Blue Book (KBB) Black Book, and Cars of Particular Interest (CPI) etc.
Such publications are generally well known, recognized and accepted by the automotive and financial sectors as guides and references for automobile pricing.

These reference guides normally offer several levels of pricing which may include manufactured suggested retail pricing (MSRP), retail, wholesale, loan etc. Additionally these value guides generally provide for methods in determining the economic impact (deductions or additions) for such factors as model packages (i.e. Limited, Touring etc.), condition, mileage, optional equipment etc.

It’s important to note that relying merely on a “Book Value” may not provide the basis for a fair and reasonable valuation of a vehicle’s value whereas, market conditions oftentimes play a direct and significant affect on a vehicle’s value at any given time or location. As an example; whereas a richly equipped high performance and/or massive gas guzzler may be significantly devalued in the marketplace during a time when gasoline prices increase significantly; at the same time, a small gas miser, with few amenities, may command a price much greater than a guide book’s listed retail value. This is known as market impact or market conditions which can and oftentimes do have a direct effect on a vehicle’s ”Fair Market Value” or true value.


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