The Kelley Blue Book has grown into one of the more reliable resources for consumers looking to price an automobile away from the dealership. The source is so trusted by consumers, an auto dealer who prices his vehicles outside of the Blue Book's suggested range may raise eyebrows and lose customers. Despite this, there are some viable reasons a dealer may price his vehicles higher than Kelley Blue Book price.
Kelley Blue Book Doesn't Sell Cars
The Kelley Blue Book is a tool for measuring the average price of an automobile in certain circumstances and market conditions. The Kelley Blue Book has never sold a car, however, and does not take into account the facts on the ground at a dealership like the popularity of models in a given year or the location of the dealership. For example, if market conditions in a certain area show a car is selling well at a certain price, dealers are going to price those vehicles to match the successful selling price regardless of the Kelley Blue Book suggested retail.
Cetified Parts and Servicing
Kelley Blue Book's suggested retail pricing does not factor dealership-certified parts for used vehicles into its quotes to consumers. Certified used vehicles undergo stringent dealership inspections and often carry limited warranties which protect the vehicle for up to a certain mileage after purchase. A dealership typically charges more for these vehicles because they are less of a risk for premature failure than a used vehicle which has not undergone such thorough testing and replacement of potentially faulty components.
The Manufacturer Sets the Retail Price
For new cars, the manufacturer's retail price allows very little wiggle room for a dealership to price a new car. Since Kelley Blue Book suggests a "fair retail price" for a given new vehicle it can give consumers the notion that dealerships are charging an unfair price, when in reality they're simply charging the price required by the manufacturer. The belief that a consumer can haggle over the price of a new vehicle in the modern world is largely a myth.
It's Only a Suggestion
The price listings available through Kelley Blue Book's website and its print publications are only suggestions, not requirements. A dealer is free to charge whatever he likes for a new or used vehicle. You, as a consumer, are free to look elsewhere if you believe the price a given dealership is charging is too high. If a dealer continually prices his vehicles out of what the market will pay for them, he most likely won't be in business for long.
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