If you build it, they will come.
So, he built it.
And they came.
Then more did.
And today, many more are still coming.
Each month, more than 22 million unique visitors go to the Kelley Blue Book (KBB) website to look up the value of a new or used car or motorcycle, to shop or sell vehicles, and so much more.
So, how did KBB become the reigning champ of automobile values? Similar to the Farmer’s Almanac, the physical blue book was once at home in many Americans’ back pockets, glove compartments, or resting on kitchen tables for easy and frequent access.
BUILDING A TRUSTED BRAND IN THE AUTO INDUSTRY
Trusted first by auto dealerships beginning in the 1920s and then by insurance providers and financial institutions, KBB went on to publish its first consumer version in 1993. This gave Americans access to data they never had before, making it an instant hit. Two years later, the company launched its website and started to offer values on personal watercraft and motorcycles as well as cars.
KBB quickly became and remains one of the most trusted resources for vehicle values and pricing with consumers, dealerships, financial institutions, and insurance companies. To learn more about KBB’s values, we spoke with Brenna Buehler, Senior Public Relations Manager, and Karl Brauer, Executive Publisher, of KBB.
KBB’s values are used today by the government, and insurance and financial institutions. That I think speaks to the level of trust the brand inspires in people and respected organizations.
“More than 50% of car buyers visit the KBB site before purchasing or selling a car,” said Brauer.
After speaking with Buehler and Brauer, we were taken aback by Les Kelley’s spirit of innovation and how he built Kelley Blue Book as well as the largest Ford dealership in the nation in its time.
So how did Les Kelley, the company’s founder, do it? And how has the company continued to be the trusted resource in the auto industry for more than 90 years? It all started with value and trust.
The Trusted Resource for Vehicle Pricing Since 1926
Though little is published about his private life, we do know that Les Kelley personified the American entrepreneurial spirit.
He left Little Rock, Arkansas in 1914 when he was 17, and after driving to California, he opened up the Kelley Kar Company in 1918, leasing a small space from an existing auto dealership.
His first inventory was three “Selected Blue Seal Automobiles,” the name he dubbed his Ford Model T's. At that time, selling used cars and setting prices for any vehicle was new to the auto industry.
Kelley saw the opportunity to sell used cars and began keeping a list of the vehicles he wanted to buy and how much he wanted to pay for them. He then circulated the list to other dealers. Building off the brand name of his cars, he titled the book, “Kelley Blue Book.”
Kelley also continued to innovate with his approach to selling cars. Along with his brother, Buster, he started painting used cars on his lot the color pink, sparking a surge in used car sales. In the early 1920s, most cars were black. His business grew and by the 1940s he had the largest Ford dealership in the nation. In the late 1950s, Les Kelley sold the dealership and the publication to the Cook family, who hired the Kelley family to run the business, which the family did into the 1980s.
Historically, insurance and financial institutions used KBB’s market value to mitigate risk when determining loan values and suggested retail prices. As more data became available, KBB was also the first to incorporate mileage when adjusting used-car values. Today, these same institutions still rely on the company’s fair market value pricing as well as its trade-in, auction, and loan-to-value ratio or lending values.
State government’s motor vehicle departments use KBB to validate title transfer values and for tax assessment purposes. These institutions trust KBB because its values are up-to-date, pertinent, and local. The company integrates pricing from 101 regions and two trillion data points that are collected from more than 250 sources.
In the 1960s, the company introduced a New Car price manual to accompany the Used Car Blue Book. The consumer version came next and finally, the award-winning KBB website.
There is really no other third-party brand like us.
Kelley’s journey into the American Dream is really about one man’s spirit to innovate by recognizing an untapped market and having a vision of the future: a true American entrepreneur. He saw opportunities and turned those ideas into reality, which helped cement KBB as an industry authority in the minds of most Americans.
Providing Value to Consumers for More Than 90 Years
Purchasing a vehicle for most Americans will be one of the biggest expenditures they ever make. For instance, the average cost of a new “light” vehicle in 2019 is around $36,000, while the average cost of a used vehicle is approximately $19,400. Because the purchase or sale of a new or used vehicle are significant financial transactions, consumers want to educate themselves before purchasing or selling a vehicle. This is where KBB comes in.
KBB and Trust
The company recently ran a survey, asking consumers what they thought about KBB. The results showed many consumers thought KBB was a nonprofit or a branch of a government agency. “That’s how much faith and trust and authority that they put in the brand,” Brauer said.
Brauer also explained that he receives a lot of direct input from consumers when he is traveling on business or to conferences. Some of that feedback includes how much consumers love the company’s site and tools. A frequent comment he hears, said Brauer, is: “you’ve made it so much easier to buy a car.”
The Authoritative Voice in The Auto Industry
KBB has been the trusted authority in the automotive industry for decades. The company achieved this by consistently providing accurate and timely data on the value of new and used vehicles. “All dealerships have embraced Blue Book values for decades,” said Brauer.
He went on to say that a consumer’s level of trust and comfort increases when they know the dealer uses KBB as its authoritative source for vehicle values with a buyer. “It happens when the dealer references the KBB price.”
Additional evidence of consumer trust in KBB’s authority reveals itself in the numbers. In 2016 alone, consumers used KBB to find values on 633 million vehicles.
It started as a national publication, but moved to five different books for five regions of the U.S.
The Value of KBB’s Online Tools
Consumer trust in KBB began early and continues today, especially as the company continues to expand its online tools and the data it makes available to consumers and institutions.
This includes vehicle values and reviews, KBB Awards, Top 10 lists as well as numerous research tools such as a payment calculator, vehicle history reports and comparisons, test drive studies, and so much more.
For instance, KBB offers a unique feature, the 5-Year Cost-to-Own calculator, which helps consumers determine the total amount of costs related to purchasing a specific vehicle. The calculator includes out-of-pocket expenses such as fuel, state fees, insurance, repairs, financing, and maintenance. It then calculates the depreciation of the vehicle from the time of purchase to the end of the five-year period.
“With the information online now and more data available than ever before, we now produce values based on 134 geographic regions,” said Buehler.
KBB is currently in China, Portugal, Brazil, and will soon be in Canada. “We’ll continue with even more countries, and just keep going where it makes sense,” said Buehler.
It is a seamless, comfortable, confident experience from their perspective while behind the scenes we are leveraging all this massive data and all these capabilities throughout the Cox Automotive eco-system.
Kelley Blue Book - Now and Moving Forward
In the 2010s, AutoTrader.com acquired KBB and both were soon brought under the Cox Automotive umbrella, giving consumers and dealers an integrated approach to determining vehicle values, buying and selling vehicles, and more. “Cox removes the friction from the transaction process,” said Brauer. “Dealers use the KBB value when discussing price with consumers, giving consumers a level of trust with the dealership.”
Finally, KBB started the Best Buy Awards a few years ago. The awards quickly earned the respect not only of the manufacturers who win the awards but also of the consumers who rely on what those awards represent when researching a car. “Putting this content together and knowing it’s really giving consumers more confidence when they buy a car is what KBB is all about,” said Brauer.
Les Kelley’s spirit of innovation continues to inspire the KBB brand as well as Cox Automotive, with its award-winning website and its growth into other markets around the globe. As always, the company continues to provide the American public with accurate and trusted information on the value of used and new cars and so much more.
This means hard work but that’s what Les Kelley was all about.
Co-creator: Terrence Gordon
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