Episode Transcript
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Speaker 1 (00:02):
Go behind the Wheel, under the hood and beyond with
car stuff from house stuff Works dot com And welcome
to the podcast. I'm Scott and I've been and today
we are joined by a longtime friend and collaborator, senior
producer Matt Frederick. I haven't given him a name a
(00:23):
nickname yet, No, no nicknames, but he's definitely deserving of
a nickname, I would think at this point. He's a
long long time here. Yeah, um, yeah, thanks for thanks
for joining us, Matt, And uh, you want to jump
into today's topic or you have more to say about Matt. Oh,
he's a close he's a close friend of yours here
at here, at work and outside of work as well.
You guys work on shows together. Everything we've done on
(00:44):
number of shows, done number shows. Um. And he's worked
with you and I in the past on some video stuff.
If you check out our shows, brain stuff or stuff
they don't want you to know, you can see Matt
on camera every once in a while. And uh, let's
say I think that's it. Oh also co host another
audio show with us. But the guy gets around what
(01:06):
does he not do? But most importantly, ladies and gentlemen,
you are here and hopefully in the right place you
if you're looking for car stuff that is. Uh So,
let's enough with the Matt fan mail, right, this guy's
gonna get an ego. Oh, I know, he's probably already
got one. Maybe maybe not. He's he seems like he's
(01:26):
down to earth gay Yeah, real, he's grounded. We like Matt,
Yeah for sure. Alright, let's move on. Let's move alright.
So today's topic is one that you came to me
with a few weeks ago and you said, um, I
got a suggestion for for a topic. Um, but we
weren't quite sure how to wrangle this one. I guess
we were thinking, Um, it's kind of a broad topic
and it's the Kelly blue Book, and we thought, well,
(01:49):
how are we gonna really tackle this. We're gonna make
it like a one on one like how to use
the Kelly blue Book. But that seems kind of um,
I don't know, um elementary, you know. I mean, you
can go online and pretty much figured it out, click
through there, and it's to each his own I guess
on that site, right, Um, every man for himself in
that In that case, I guess maybe that's a better
way to say it. But Um, maybe common misconceptions something
like that, and that sort of ties in with the
(02:11):
way I think we're gonna do this. And we we
looked into the history at Kelly Blue Book, which will
not surprise any of our listeners that we love to
look at at how things start around here in our
in our show, and this one, as always has a
fascinating history, it goes along with it. Yeah, and luckily, listeners,
you will recall that Scott and I had had some
(02:31):
misadventures trying to find a relatively lighthearted topic after the
after a Hell's Highway. Yeah, and you know what, I
think we found one. I mean, we tried, we tried
with you haul and it turns out there was some
craziness going on there in that family and the company
and all that stuff. And you know, it's also a
good story. But um, this Kelly blue Book tale is
is relatively light. I mean it's it's not anything terrible,
(02:54):
it's not anything dastardly going on in the in the company,
between the brothers or anything like that. So, um seems
to work out. Okay, So let's let's talk about the
Kelly Blue Book and it goes back. Um, honestly, it
starts well, right about a century ago. Yeah, yes, sir,
it's going to be a surprise to a lot of listeners. Yeah,
right about. Um, I guess would be around ninety years now.
It was first published in nineteen twenty six. But this
(03:18):
goes but that's just uh. You know, one thing you
and I often find, Scott, is that the story never
really starts. When the story officially starts. No, no, no.
And you know what we can maybe how about this
we outline some of the dates, the important dates right
up here at right up the front, and then we
can talk about how it all became, you know, kind
of step through the history of the Kelly Blue Book
and as we go through this. So you mentioned that's
(03:41):
the first actual publishing of the Kelly Blue Book, right,
but he was creating this list for a long time
prior to that, since about nineteen eighteen. Yes, we're talking
about Les Kelly. Uh. He was a young man back
in nineteen eighteen, and that is the year that he
also parked three model T forwards in an open lot,
(04:05):
put four d fifty bucks in the till and started
the Kelly Car Company at nineteen eighteen. And he was
a young guy at the time, I believe. I want
to say he was um. Well, in nineteen fourteen, he
was seventeen years old, So four years later he was
twenty one years old when all this went down. So
a young young guy, Um, nineteen eighteen. Again that's the
start of a dealership. So he starts out with not
(04:26):
publishing really, but he starts out with a a Ford
dealership of sorts, if you can call it that really. Um,
he wasn't like an authorized Ford dealer or anything like that.
The way the way it started was, um, he he
had a Model T Forward. Of course, back in nineteen
fours what you drive in a Model T Forward? And uh,
he was pretty good at fixing things, repairing things, keeping things,
(04:48):
you know, tip top condition, and he did that with
his Model T Forward and a lot of his friends
were kind of bugging him all the time about like, hey,
I'd like to buy that car from me. It's in
great shape, and you know, I know that it's a
quality vehicle. Um, you've been driving it for a long time.
And he was, you know, I guess he was hesitant
to sell it or to get rid of that, but
eventually he caved and sold it to one of his friends.
(05:09):
And he used that money to buy another Ford. Um
did he buy two at that point? Yeah, he bought
one other old Ford, and he didn't he did the
same thing. He went, you know, did like a complete
overhaul of the thing, and he traded it off again.
This time, however, he traded it for to model T
forwards of lesser condition and some cash. And that was
(05:29):
that was critical, right, right, because that's one of the
things that really got him uh interested in in the
idea of the car business. So he found himself eventually
making enough money to put himself through college. Yeah, with
just this kind of like trading up one level every time.
And as he said, you know, he had these two
(05:50):
cars he reconditioned, had a little bit of cash. He
reconditioned those cars and sold them. He was that little
bit of money to buy other used cars because you know,
they're very very cheap at the time. You know, Um,
I guess respectively, I guess, um. But he bought these
other used vehicles and then he again made himself enough
money to get through college and he leased out. He
got so successful at this point, he was still a
(06:12):
young guy in college. He he was so successful that
he was able to lease part of a lot from
another dealer in Los Angeles, and that's where he started
the this Kelly Car Company with just three cars for
sale and as he said, four and fifty dollars in
until right. Yeah, his brother who was named Buster joined
in uh at the age of thirteen, just helping out
on the lot, and the business continued to grow, they
(06:36):
had to move to larger sites. Busters stayed there for
a while. By the time he was eighteen, he ran
repair shop, heading up a dozen mechanics because they would
do you know, repairs as well as dealership stuff as
well as sales, and les would manage the sales. And
they kept having to move to larger and larger and
larger sites. Yeah, and this is all happening in southern California.
(06:58):
I don't think we mentioned that. Oh no, we it
yeah in Irvine, California, which is just south of Los
Angeles and north of San Diego. So southern California business.
That's where it's founded. But it doesn't always stay there,
I think, I think it moves at a certain point.
But um so this is we're getting to the point
where it's in the early nineteen twenties and this is
really the start of of what would make him most famous.
(07:20):
I guess right, yeah, because a lot of people probably
hearing this podcast, thought, oh wait, les Kelly sold cars.
I mean, it makes sense when you think about it,
but it just doesn't occur to a lot of people.
Nineteen twenties. This is our our pivotal moment. That is
what glad Well, Malcolm Gladwell would call the tipping point, right,
And that's because Les Kelly needs more inventory. So he started,
(07:45):
he wrote up a list and he gave other dealers
and banks this list of cars, only cars who wanted
to buy and what he would pay for them. Yeah.
Pretty smart, right, he says, I will pay you X
number of dollars for a Duisenberg in this condition. And
no one had ever done this before. I mean he's
but he's putting a value on used cars. And prior
(08:05):
to that, it was just kind of the sky's the limit.
I mean, it's you walk in and you you from,
like with no is a blank slate, I guess, with
with no starting point to go from for the dealer
or for the person who's walking in the customer, they
have to kind of hammer out a price on whatever vehicle,
and there really wasn't a set rate, and he's he's
sort of in a way saying, here's our starting point,
(08:25):
here's here's what I'm willing to pay, and then of
course the negotiations can go from that point. But he's
putting it right out there for everybody to see, the bankers,
the other dealers, and so they know where where he
would begin. But the thing is a lot of other
dealers said, hey, that's a fantastic idea, and you know what,
I kind of agree with your numbers here, So i'll
take you know, can I have a copy of that
list and I'll use that for my list as well.
(08:46):
I mean, I'd like to just see it so that
when someone comes in and wants to buy one of
these vehicles, that wants to trade in one of these vehicles,
I'll know roughly where we can begin this negotiation problems.
Starting point, Yes, starting point, It's all about a starting point.
At this point, it's in the early nine twenties. And
the thing is this is really critical because the early
ninety twenties is when this kind of this trust in
(09:06):
Les Kelly begins, and the trust is so critical for him.
I mean that the I guess um you know the
I don't want to say honor system, but I mean
he's he's got fair numbers in the in the books, right, Yeah,
and those numbers speak for themselves because if they weren't
reasonable numbers, then other dealers wouldn't be using them. Yeah,
(09:28):
and they are because they've got them as as the
you know, the history of the Kelly Blue Books story
tells us here that um, you know a lot of
other dealers would have that list very handy, that they
keep it under their blotterers on the side, and customers
don't have any idea what's going on yet this point,
unless unless somebody has leaked to them that you know,
this is going on behind the scenes. But the dealers
are the only ones using this. It's a it's not
(09:49):
even a publication yet at this point. It's just a
list that he's either typed up or had copied in
some way. Um. But at this point, again, it's still
just a list put together by Les Kelly. It's not
truly a public lift yet, right. But we should also
say that this is a boom for bankers as well.
Somebody wants a car loan, you know, how much the
(10:10):
car's worth helps evaluation it eventually ends up insurance insurance,
but let's not get too far ahead of ourselves. Huge
time saver, and if everybody can agree on those numbers,
then that's a great system to have. So in a
little bit before six, so from twenty to six, Kelly's
(10:30):
gears are turning and he's saying, you know, I'm selling cars.
Is great. And by the way, this was a wildly
successful dealership. Selling cars is great. But I think I
could also make make a pretty penny by just doing this,
by just supplying this list to bankers and dealers, becoming
a publisher. Yeah, but you know, I think he kept
(10:51):
his hands into both pots here. I mean, if that's
or both lines both lines in the water? Maybe is
this way to say it? As because um, he was
selling vehicles and he was wishing this list as early
as about nineteen twenty six, because that was the first
publication of the Kelly Blue Book was in nineteen so
he'd been doing this for about eight years, you know,
publishing this, Uh this the shorthand list, I guess, you know,
(11:12):
the one that he just typed up or however he
had it copied again. Um, but the first published Kelly
Blue Book was in ninety six, and I think it
was in Los Angeles because at this point it moved
around to bigger locations, as you said, So it was
in the l A area when when this thing was
finally published and it was called the First Blue Book
of Motor Car Motor Car Values, um, and he showed
things like, you know, factory and list price cash values
(11:34):
of thousands of vehicles, from Cadillacs to Duisenberg's Pierce Arrows hupmobiles.
I mean, I'm looking at the list here that said
has Studa Bagger, Willie's night Vehicles, packards, um, you know,
Nash vehicles, just all kinds of stuff, right, So, um,
the blue Book thing, I think that's um. I want
to say, that's kind of like, is that like just
a standard, because I don't know if he came up
(11:56):
with that or not. I don't know how the blue
Book term came about it. One thing that they point
out here is that Emily Post, who published etiquette books,
also used that term because he called it Etiquette the
blue Book of Social Usage. So I wonder if that
was just a common thing at that time. I didn't
really dig into that too deep to see what blue
Book men at times it was like a like a
(12:18):
standard of some sort, like a classification of books. Yeah,
that might be. I'm gonna have to look that up
after this podcast. Maybe one of our listeners will right
in it. Yes, somebody let us know what other blue
Books exists. But he kept the theme going as well
because he realized that he could help for marketing his
own Blue Book, and he would do he would make
it um more of an authoritative source for car values
(12:42):
by h carrying this selected blue seal automobile. Uh. This
it was this blue and gold ribbon medallion that they
would put on the cover of the Blue Book and
then dealers were expected to have the relevant prices. But
it's very important to note that at this time, uh,
just as so long as we're clear about this, at
(13:02):
this time, customers still didn't see the book, right, that's true.
This was a trade publication for dealers, trade publication and
it will remain that for decades, and we'll we'll talk
about when that became everything that had switched over. You
know what, I just found a note here about the
blue Book name. Now quick answer, right, yeah, okay, so, um,
(13:23):
I guess the publication was named blue Book after the
social register because it meant that you'd find valuable information inside.
So that's kind of the the genesis of the blue
Book within you know, the way that Kelly is using
it and the way that Emily Post was using it
for her Etiquette book is like whatever's inside here is
valuable to you in some way. Also, blue Book is
(13:44):
a uniform system of citation for lawyers. It's the blue
Book is uh well, a thing called the Blue Book
is compiled by Harvard Law Reviews. So if you're looking
for a copy of the Blue Book and it seems
confusing and filled with legal ease, you might be looking
at the wrong blue probably, all right. So Les Kelly
(14:06):
was starting to become synonymous, I guess, with being the
authoritative source on everything automotive as far as values go
UM for new cars, use cars um. He's becoming the
one to go to, the source to go to for
this and and that's important because this is such an
early start. He's the only one really doing this. There
might have been other kind of you know, spinoffs that
we're trying, but they were just republishing his his information.
(14:30):
And I think that you know, we talked about this
off air. We said that How strange is that that
here's the guy that's running a dealership that's telling the
banks and the the insurers and everybody else what these
cars are working, it seems, And I know I hesitate
to use the word dirty, but it's a little bit dirty,
I think, and that you know, he's trying. He's kind
of playing both sides of this, right, I mean, he
(14:51):
could place a higher value on certain vehicles, but that
that he has an interest in selling or buying. You know,
he wants to buy, hiring, selling, fluence the market, yes,
very exactly right. He could influence the market in a
in a in a serious way. However, he wasn't doing
that because he was keeping it fair. Other people were
watching him at this point. I mean, it's it's all
being monitored because you know, the packer guy would say, hey,
(15:13):
and where are you devalue my packards and your forwards
are going up in value. I don't understand what's going
on there, and he would he would have to have
an explanation for that. So he's watching the market trends.
He's watching, um, you know, just exactly what's required now.
I mean, because the market changes all the time based
on other things. Too. I mean early in the nineteen
hundreds when he started all this, we were just coming
out of World War One and we were not quite
(15:35):
to World War two yet, but that will come into play.
Um there's also the Great Depression which hit just before that.
So there's there's that stuff going on, and he's got
to pay attention to all this stuff. And and not
only that, he's looking at like the quality of the vehicles.
Um so just the accessories. The blue books become increasingly
sophisticated over to exactly right. So for example, I mean
(15:56):
one example he us here in the story is that
the packards today and limousine with balloon tires might fetch
as much as three thousand, eight hundred and twenty five dollars.
Can you imagine that UM nine one Nash touring car,
even with the clock, was only worth fifty the whole
in the nation. I love that part where they know
(16:18):
even with the clock. But this, here's here's something I
really respect about this guy and this enterprise is that
he was able to see the long term goal, or
if one be cynical, the long con Because no matter
how much money you could make in the short term
by inflating the prices of cars you wanted to sell,
(16:40):
which I guess you could if you timed it correctly,
you would still you you would instantly lose the reputation
of this book, right, and your your personal reputation would
be ruined, exactly right. That's very important to him, apparently,
I mean, and as it would be to anybody's starting
out like this. And you would think that it would
be not everybody, but but to him it was. It
really was. And uh and man, I'm glad it paid
(17:00):
off because this has become a standard even now decades later.
I mean, it's one that we all go to trust. Oh, Scott,
I'm sorry before we go to the modern day, though,
yes I don't. I hate Well, we're not. We're not
quite going to the lad day. I've got I've got
another little interesting twist on this whole thing of what
what we did with involving pink cars. Ah, yes, good
your mind, reader, that's exactly what I want to talk
(17:21):
about you, Okay, So I'll set the stage for you,
ladies and gentlemen that I blow the secret. No, no, okay, uh,
I's set the stage for you. So you've probably heard
that famous quote by Henry Ford right, uh, saying that
customers can have any color of paint they want so
long as it's black. Turns out that Henry Ford wasn't
(17:43):
saying that to be just some sort of obstinate, stubborn
control freak. It was because painting technology at the time
was a pain in the key ster, and all the
paints were different. I mean, there were other paint colors available,
as we know, and all model ts were not black
as we know. Um But the thing with the black
paint was that it dried faster. Whatever the chemical makeup
(18:07):
of you know, Ford's black paint was, it allowed it
to dry faster than say the red or the blue,
or the yellow or the green or any other colors
have availed, all of which had different drying times. But
still even with this black paint, it took what's got
a month. That's amazing, isn't it. Yeah, it did because
they weren't baking the enamel on like they are now
(18:28):
or anything like that. So what they don't tell you,
or what you don't often see, is that sometimes they
had um warehouses of parts that were hanging to be dried,
you know, before they could be applied to a vehicle.
Air drying to be air dried. So you know, it
took up enormous amounts of space if you wanted to
paint a car in any other color besides black, because
black having to cure a lot faster than some of
(18:49):
the other colors. So um, this board had to devote
about twenty acres of covered storage just for waiting for
cars to dry. So you would park twenty acres of
four out out you know they're under you know, um
pole barns or something, right, but yeah, just for them
to dry so they could go to the dealership and
then be sold. And that must have just made him furious.
(19:10):
But the black cars could be moved out a lot
faster than the other colored vehicles. And at this time,
when when this little tidbit takes place, Buster, the thirteen
year old little brother from earlier, has rose through the ranks.
You know, he was eighteen, he was leading the repair shop.
Now he I believe he's general manager. But no, he's
not yet general manager, not yet, but he's he's on
(19:32):
the way. He's got he's an ascending star. Um Busting Kelly.
I like that name, Yeah, it does sound uh it
reminds me of Buster Keaton course. But so Buster was
still managing the body shop, that's right, and an employee
was gonna repaint a car, a used car. Yeah, and
of course they were going to repaint it black, because
that's just what they did and makes sense. I'm sure
(19:54):
that every car on the lot, and every car on
every lot down the road was you know, let's say
most of them were black. Not all of them, but
most of them. More So, he wanted something to stand out,
and he said, yeah, I got an idea. Let's painted pink.
Of all things. I mean, he decides, let's paint it
bright pink. So they do that. They paint it pink.
They put in the showroom, and immediately that car sells
(20:14):
like that. It's gone, like super quick. So he says,
we want if it worked once, let's try it against.
They tried it again, and it worked again, and they said,
you know what, we've got all these cars in this
paint shop right now, We've got the pink paint ready
to go. Paint every car pink. And they did it,
and they sold every vehicle, every single one, which I
guess it just seems even back then, it seems very
(20:36):
l a to me. And the thing is now I
think this is a DuPont paint that they were using,
because I said that DuPont had come up with a
lacquer that in any color dried in just two hours
instead of a month. So what normally took you know,
thirty days to to make happen or to work now
is like you could do it overnight practically. So so
something like that was it was revolutionary. You know, before that,
(20:56):
they probably wouldn't have tried the pink you know thing,
unless it was just off experiment. But um, it worked
for them, and it made a huge, you know, splash,
I guess in the in the local area. I mean
it's such a it's such a powerful statement. If every
other car is one color, then of course people are
gonna want the thing that is different. That's what people want,
you know, that's innovation. I mean, he's he's really thinking
(21:17):
out of the box on that one. Really honestly, I
hate that, but I mean it really was. He's thinking
out the box and it worked for them. Um, both
both the dealership and the book itself, which again still
is a trade publication at this point, continue to flourish. Now, Scott,
I think by this point, some more savvy customers or
car enthusiasts, you know, people who are well off enough
(21:39):
to buy cars multiple times per year. Uh, those folks
probably know that something's up. Yeah, they've got their spider
sense tingling. But by this point, Buster is officially the
general manager of the dealership and the publisher of the
Blue Book. And Kelly Car Company moves to Figaroa and
(22:01):
Pico Street in l A. And they take up almost
a city block. Yeah, that's something. And that's not including
the repair and body shop, which is a different location. Um.
And they've got a hundred people working there at this point.
So the body shop alone has one hundred people. Um,
what year is this we're talking that this is still um,
right around the depression era, So this is still early
(22:22):
on in the history of the company, the the Kelly
Car Company. Um strange. The dealership operated solely as a
used car operation for a long long time. But um,
in those days, new car dealerships didn't sell used cars,
so that so that if you wanted to use car,
you had to go to used car dealership. You couldn't
go to a new car dealership. And they didn't have
like a separate lot for the used cars or anything
(22:44):
like that this was simply the place you would go
or you know trade. Yeah, if you're a trade yeah,
that's right. Yeah, that's right. You could trade in your vehicle,
your used vehicle for another used vehicle. You could do that.
But if you wanted a brand new car, you didn't
have to go to him. UM. So you know he's
working directly with the public in in that way. UM.
And the other thing is that, of course, you know,
with with the um the publication that he has and
(23:08):
you know the values that he's placed on vehicles, he
was often the one that they would go to for
um A I guess an appraisal. You know that he
could he could set up an appraisal. You could have
your used card appraise if before he took it somewhere
else or to them, you know, depending on if you
wanted to sell it to them or take it down
the block and get a you know deal on that
new Cadillac or whatever you're gonna get. Right. So during
(23:29):
this is even during the depression, UM, sometimes the line
of vehicles to be appraised for the day would be
would go around the block. It was like this long
long waiting list of people to just pull up get
the appraisal done and you're on your way. And even
during the depression era, um, they were buying. They were
very successful. They were buying entire dealership inventory, like everything
(23:52):
they've got on their lot, because you know, unfortunately a
lot of places were folding up, they were unable to
maintain business. But for whatever reason, the Kelly Cark Company
was was just the business was booming there and a
lot of people were selling their cars to Again, this
is an unfortunate thing in US history, but one of
the first things that happens in an economic collapse when
(24:14):
people lose employment when they you know, you lose you
can lose income, but you rarely lose bills, you know
what I mean. So they had to start selling things off,
and one of the first things to go would be
the most expensive thing they owned aside from their house,
which was their car. Yeah. I think we've all seen
photos of Depression era, you know, people parked on Wall
(24:35):
Street with a sign on the front that says, you know,
the first one cash takes this car. That could sad,
sad stories, but but it does give me a funny
moment here because I can just see it so clearly
someone's finally gotten through the appraisal line and they've got
their Nash touring car there and they're like, I can
only give you fifty dollars, And there's some guys screaming,
(24:55):
but it's got a clock, right, you're right, that that
you valuable accessory, right, So yeah, yeah, that invaluable accessory.
Don't be fooled those of you in the business of
Bye Nash touring cars. You know what, I think they're
worth more than fifty bucks today. You know, here's another Yeah,
I think a little bit more. Yeah, here's a funny
(25:15):
note on the nineteen thirties and forties because it says
it says here in the history it says a very
different world in the used car buying business than in
the used car business, rather than than it is today.
And he says often part of the as part of
the sale, Buster Buster Kelly would spend Saturday or Sunday
teaching the buyers, sometimes both husband and wife, how to drive.
Isn't it funny? It's a funny thought. Like they come in,
(25:37):
they buy a vehicle and he's like, well they They're like,
I don't have any idea how to drive. But Buster
would take them out and personally teach them how to drive. Now,
which of these wheels do I turn right? Yeah, So
it's it's uh, it's true though, because you know, at
this point in the nineteen thirties and the forties, people
are beginning to recover. The US is slowly beginning to
(25:57):
recover from the horrors of the rate depressions. And for
a lot of them, this is maybe their first vehicle
that they've been able to purchase. So again, the necessity
of being able to teach them how to drive, and
and the Kellys to be able to offer something like
that for buster, to teach them how to drive and
sell them the vehicle. It's like the whole deal. That's
everything all at one spot. And we'll raise the stakes
a little further because the Kelly brothers also opened their
(26:20):
own insurance company and auto club, so you could walk in,
you could buy a used car so it wouldn't be
near as expensive as a new one, and at the
same time you could get insurance, driving lessons and sell
any other car that you had. Man, what a deal.
I mean, they've figured out this business, uh, from front
(26:41):
to back. That's pretty amazing. If they could do that,
I mean, and you know, at one point. Um. I
think it was right around the World War two era,
just afterwards. So they have this this thought that you know,
because of you know, people that are about to be
drafted are going into the war. So this is like,
you know, just prior to the war. During the war,
so somebody who was about to be drafted could sell
his car to the Kelly Car Company and then drive
(27:02):
it right up to the point when they left for
the war. So it wasn't like a situation where they
had to leave the vehicle on the farm or whatever
and then have you know, have somebody sell it for
them or hang onto it, you know, park it or whatever. Right. Um.
The idea was that the you know, the soldier of
the soldier to be would be able to um, you
know sell it. Know that they're going to get that
money when they drive in and they leave it on
(27:23):
the lot and walk out with the cash for the vehicle.
And that's that's pretty important. I mean, it's a it's
a pretty innovative thing that they were doing at the time.
And when the war was over, Uh, they offered something
called the g I Credit Plan, so when they came
back in they didn't have to have any money down
and they could have up to five years to pay
for another vehicle on the lot, not the one that
they turned in, of course, because that's long gone, but
(27:44):
something new on the lot or something used on the lot. Brother, See,
that's that's so cool. And I wish there were I
wish there were more opportunities for returning soldiers, uh like
like that, because there aren't as many in modern day. Yeah,
you know, there's some around, but I think at the
time and Kelly was probably an innovator and that they
were doing this because I don't I've never heard of
any other car dealership or um, you know, even car
(28:07):
company doing this. So that's a pretty good idea of
this g I credit plan, I think. Um. Then right
around the same time, I would guess, I don't know
exact year on this, but Buster's son Bob joined the
business just like his dad did, and he made fifty
cents a day, which I don't know if that's a
that's a great pay or not. That's probably not. If
I had to guess, um, same thing. He was a
lot boys, so you know Washington cars change and tires
(28:29):
that kind of thing. Yeah. Uh So the they finally
started doing some advertisement, right Uh, and this is this
is so fascinating to me because Buster Kelly became the
first car dealer to advertise on television. Yeah, I read that.
(28:50):
I wonder if that's true or not. I mean, I
wonder if this's you know, if there's a local guy somewhere,
I wonder. I mean, I think that's pretty interesting though.
And so so at this point, it just so we're
clear on this. He he You had already bless Kelly
had bought a small forward franchise as well during the
war because you know, it was available, and he of
course was doing very well, you know, so now they
could sell new cars. Yeah, so he was selling new
and used vehicles at this point. So that's kind of
(29:11):
new for them because they've been used up until this point. Um.
And you said, you know, first car dealer on TV.
And then these weren't your typical commercials either. These were
like the ones that you see sometimes on the weekend.
And I will sometimes watch these because usually they're they're
kind of funny. Um, it's more like an infomercial. Yeah,
it's like an abbreviated infomercial, like fift twenty minutes long. Yeah,
(29:33):
like the camera stays in one place, and this is
the way I picture it going down. Ben. I think
that they've probably had a stationary camera, and you know,
this is the way that the other ones I've seen
of work. They probably have a stationary camera on the
dealer in front of the dealership, and then they have
like a parade of vehicles driven by salespeople that bring
in one and then they pull it off and they
you know, they talk about it, and then they pull
that through, and another one comes through and they talk
(29:53):
about that one and they pull it through. And that's
the way it works. They can talk about as many
cars as they can without moving the camera. I have
a feeling that that's kind of the way this was.
I know that he would walk around the shore room
as well. Um, and he would also offer a guarantee
with these vehicles, which I thought was another innovative thing
for them to do. That you could return the car
within thirty days and you could trade it for any
(30:14):
other car at the same or higher value. So, um,
you had this option that if you took it home
and you didn't like it, you know, you kicked the tires.
You're driven around the box. A few times. You had
some friends out for a ride or whatever. Thirty days,
that's pretty good, or your wife says, what the hell
are you doing? Yeah, exactly for thirty days, that's really
good because you know, now, I'm trying to think of
(30:35):
some places that do similar things, and I think there's
like a three day guarantee at one national chain, maybe
a five day guarantee at another one, but not thirty
that's an awful long time. And you know, the idea
that you could trade it in, um, you know, I
think it wasn't like a cash back toal. You couldn't
trade it back for for the full cash you could.
Once you've made that purchase, you'd be able. You'd have
(30:57):
to get another vehicle something that is that level or higher.
I think I was. Yeah. Yeah, I'm wondering too if
we can go on YouTube and find one of those
first commercials. I haven't checked out, but if we do,
I'll go ahead and put it on Twitter. That would
be really cool to see Buster Kelly selling cars. Uh
And speaking of selling, okay, they went beyond selling uh
(31:20):
individual cars, and I believe it was the nineteen fifties
when Les Kelly decided that they were going to sell
the dealerships. Yeah, this is a strange move. So he's
he's very um, well he's in the sixties, right, and
he's very successful at this point, and he decides that, um,
rather than continuously moving around, you know, trying to get
(31:43):
a bigger place in the bigger places, just becoming more
and more costly to do something like that. Um, but
he was gonna have to. The idea was that he
would have had to move from downtown l A to
somewhere else. And I don't think he liked the idea
of moving out of downtown l A because it's probably
the hot spot for business. But he was kind of
out of options at this point. He needed more space.
But if you do need more space, you gotta get
(32:03):
out of town. And the problem is will people go
out of town to buy new cars? I think that's
the thought process here. Oh, by the way, his his
last location, um, I think is at the current site
of the Staples Center in downtown l A. That's where
the Staple Center was built. So that was his last
l A location, the big one. It said. It would
have been cool if they had made it a museum.
But so by nineteen sixty two they were completely out
(32:26):
of the car business and they're voting their full time
to publishing. This Kelly Blue Book, which is still just
a trade publication, is not available to the public in
any way at this point and time. And now that
we have turned the leaf with the Kelly brothers, and
they have. They have gone from selling three cars in
a lot somewhere to becoming the largest used car dealership
(32:49):
in the world, and now they're going straight into publishing.
We are ready to Oh my gosh, I can't believe
I'm gonna say it, turn a page on the Kelly
Blue Book. I'm sorry, so, Scott, are we are? We
still cool? After that? Turned the page? That was a
pretty bad pun, but we can we can probably move
on past that, all right. I'll do my best not
(33:11):
to have anymore. So all right, so here we are.
They moved to Long Beach, as you said, and for
the next thirty years, the Blue Book thrives just as
a trade publication. Yes it does. And you know, somewhere
along the way, I mean, we got to mention this
right now, because this is kind of where this falls
in the chronology. Now the company carries on, however, of course,
(33:34):
um Les Kelly, He's getting pretty old at this point,
right he's in his late sixties, in the nineteen fifties,
and he is active in the business until nine nineteen ninety.
That's when he passed away. It was in nineteen ninety
and he was ninety three years old and he passed away.
So he remained with it right to the very end.
But the company, as we said, carried on, and um,
(33:58):
you know, the thing is that you know, so we
mentioned that it was just a trade publication at this point, right,
So so that's pretty critical because I think a lot
of our listeners might have thought, you know that well,
pretty much for their whole life. They probably heard the
term what's the Kelly blue Book value my car? Or
you know, check the Kelly blue Book on it to
see before I take it to the dealer to trade in,
and especially if your parents ever bought used cars. Yeah,
(34:19):
exactly right, you know, and everybody kind of heard of
this by this point. But again, it's still a trade publication.
It was not for the public. And the trade publication
thing means that, you know, it was only available to
the automotive insiders, the automotive industry insiders like car dealers,
financial institutions, insurance companies. Yeah, yeah, you're right. So, um,
it wasn't until nineteen nine three that the general public
(34:41):
could actually buy a Kelly Blue Book. And that changed everything,
absolutely everything, because you know, here's this trade publication where
the dealers have got kind of a as in there
in the sleeve. You know, Yeah, they get an edge. Yeah,
they really do have a little bit of an edge
at this point. And and honestly, what years that nine?
I said, Yes, Um, internet is is around, but very
(35:05):
very sparse. Yeah, that's a good way to say it.
But it's just not available like it is now. Um,
you had to well, you know, I'm not even gonna
go into that. We can let tech stuff do that,
but but you weren't hopping online every five seconds to
check something, you know, check your Facebook posts right now?
Your your phone? Uh, in most cases still as a
(35:25):
landline or a bag phone or a bag phone. Yeah
that's Wall Street. You were super wealthy. Did people have
were pagers? And three? Yes? I think pages were still popular?
Did you did you? You know? I did. I had
a page because my job required in nineteen Um, I
(35:45):
can tell you exactly when I had I was a
like a corporate runner for Chrysler, and I had to
have had to have it so I was available, you know,
to make a phone call at a pay phone if
I had to, you know, pull over and call somebody
back of headquarters. I remember, you know, I I was
growing up. One of the things that my parents did
when I started driving. Um, yeah, I think it was
(36:06):
when I started driving, they got me a pager because
they wanted they wanted there to be no excuses, you
know what I mean? Uh? Yeah, Well did you use
it often? I hated it? Yeah, I eventually I thought
it was cool, but eventually hated it. I wasn't you know.
I wasn't a super popular kid, I'll be honest with you.
So it's not like there were Um it's not like
(36:29):
there were girls that I had a crush on that
were sending me texts or using whatever codes there were.
It was the only lady sending me text on that page.
Or was my mother? Man, you had a fancy one.
If you could get a text on you well, I see,
I see, yeah, mine. You know what, I would bet
you anything that I could walk into my basement find
(36:49):
the box that that thing still lives in, and I
could I could put my hands on that page right
in less than five minutes from entering my house. I
bet I know right where it is. Wow, that's maybe
you should bring it back. You know, I've got as
I moved on through jobs, different jobs. Even when you're done,
you kind of pack up everything in the one box
and you label it like, you know, whatever company you know,
desk desktop items, and you think you're gonna break that
(37:10):
out at the next job, but you never do, and
it just sits in your basement with old files that
mean nothing now, a lot of old computer disc you know,
like those those hard disks, and some millions of floppy disks.
I don't know you you still have some floppies, I
think I do. Yeah, you know this maybe from college. Okay,
this is a total tangent. But before you get back
to the blue butt, I just had this, um mind
(37:30):
blowing thought a little while ago, and I'm sure this
has occurred to someone else before. So, Scott, you and
I use Microsoft Word often we're writing stuff, and uh
listeners out there. You know you're probably, of course you're
familiar with Microsoft Word and even if you're not, uh,
you're familiar with that little save icon that looks like
(37:51):
a three point five discs yes, you're right. It occurred
to me a while back that a lot of people,
a lot of younger kids have no idea what that is,
and you know what that is on We just got
the latest version here in the office and I didn't
even think of that. Then that's a good observation because
we have the Outlook version, I think, or my office
(38:12):
twenty Yeah, why no, it sounds funny, but you know
that's that's what we're using, and it's twenty But the
point is it's version and it's still has that that
hard Yeah, the hard disc icon for first save. And
I've bet a lot of people have never seen one
of those in their life. Yeah, I mean, why why
would you? I still not selling a hoarder, but I
(38:33):
had a couple of computer games that were, uh, super
cool because you had to have multiple discs just to
get it going on your computer, and I saved them
because my computer wasn't smart enough to run them. You know,
you know, Okay, were we off topic? But I know
that I've seen those recently, you know that those hard
discs in other boxes, and I thought, you know, I
(38:55):
looked at it, what's on there? And I think, well,
I'd like to just take a look at that because
you know, I guess just nostalgia reasons, or yeah, you
might have like family pictures, there's just no way to
read them anymore. I'd have to go to like a
thrift store and find some old bit of computer hardware
for you know, a quarter on the shelf and then
bring that home and try to figure out a way
to you know where. Yeah, yeah, exactly. Okay, so let's
get back to the Kelly. Let's get back to it
(39:16):
because um all right, yeah, so at this point, the
customers are receiving the Kelly Blue Book twice a month,
and they need it because they're beginning to become dare
I see dependent upon it? Right? And there are a
couple of other changes that happened to right, funny how
that works, that need to become dependent on that. Yeah.
Another big change came about in nineteen sixties six, and
(39:37):
that was when a new car price manual was added. So, uh,
they're starting to place value on new cars. Now. This
is really interesting too, Like, um, I guess there's the
manufacturers suggested retail price and that would be in there. Um,
let's see what else would be there. I guess the
dealer invoice price would be part of that. Yeah, the
list price. Yeah, so this gives customers again, they can
(39:59):
they can see all this. They know that the dealer,
the dealer invoice price, they know the manufacturer suggested retail price,
which you know again without the internet, you know, nine,
you're gonna be able to figure this out. So, um,
I don't know. Interesting, we've kind of hopped around here
because we were at nineteen back at nineteen six. Well,
I apologize because I feel that was important that new
(40:20):
car price guy. That's that's an important turn in their history, Oh,
for sure. And it's not the only one, because they
realized quickly that increasingly sophisticated year make model UM profiles
might not be enough because that's not the only thing
people want to sell. They also want to sell r vs,
they want to sell manufactured housing, they want to sell motorcycles,
(40:42):
and Kelly made a book for each of them, a
t v s and snowmobiles and motorcycles, and man, you
said manufactured housing. That's something else. I mean, but it's
interesting that they're branching into these different places. Now they're
really going at this. I mean, they're they're deciding whatever
can be sold whatever vehicles can be sold, that's a
market for us, and let let's hit them all. So
how hard would that be do you think that to
(41:03):
just kind of jump into r vs not knowing anything
about them and having to study and learn all that
and figure out what people are paying. And I mean
to start with nothing, because there was nothing there. I mean,
it was again just again blue sky. When you walked
into our blank slate, maybe when you walked into a
dealership and you just had to start this negotiation with
whatever they thought it was worth and what you thought
it was worth. It was a lot more difficult when
(41:25):
you didn't have a beginning point at starting point. So
in the nineteen sixties, that was something that they were there, um,
just starting, I guess. And they also there's another thing
that happened. I love classic cars. You love classic cars
listeners out there, Um, I'm just gonna assume that you
also love classic cars because of my opinion, everybody should. However,
(41:49):
as the as car manufacturers learned more about their craft,
there's there's no argument about it, the quality of cars
improved definitely. And this meant that the average age of
a vehicle on the road changed, right The Blue Book
only covered seven years back. Yeah, that's true. So, um,
(42:11):
so it makes sense to produce another publication that what
is called the the Older Car Guide, and that valued
cars fourteen years prior. So I think this is another
fourteen years back. So I wonder if that means twenty
one years total. I don't I'm not exactly sure. But um,
then there was an Early Early Model Guide, which um
which now actually that's that's something that they have now.
(42:32):
Um the Early Model Guide provides values all the way
back in six so you can get I guess, an estimation,
an estimation and valuation of that car. I know that's
really really difficult to do with with classic cars, with
antique cars, with collectible cars, well you get to a
point where you can't really place an objective value on it.
(42:53):
But see, you know what they're doing, you know, with that,
with that, with that Early Model Guide, they're they're also
paying attention to while at auction there's on for a
lot more money. And we know that, you know, for
whatever reason, um mouse makes something up. You know, we
know that the early Mustangs are selling for a crazy
amount higher than they did and back in two thousand thirteen,
they can they can see trends like that going on,
(43:13):
and they do adjust all those regularly and the website
helps with that. Yeah, yeah, that's I'm glad you said
website because a lot of that changes in right, is
when this officially becomes a three generation family company because
Bob's son, Mike, joins up and Mike is a computer
(43:36):
scientist when he joins up with the Kelly Company, so
he really drives a lot of the innovation to software
and then ultimately to an online presence exactly right. And um,
all right, so we're getting into the computer age. I
guess we could say, you know, the tech driven era
of the Kelly blue Book. But here's an interesting little
(43:57):
twist on this whole thing. We have to go back
in time for Yeah, and it's strange, you know, the
way it fits into the chronology of this whole thing.
But um, you know, for a long long time, there
was no advertised price on brand new vehicles, so that
you know, they they didn't arrive at the dealership with
a windows sticker that said here's what this car is
valued at and here's the features that it that it has.
But in night, Senator Monroney, uh, he introduced a bill
(44:22):
that would require windows sticker on every new vehicle which
dis closed all the features, and the manufacturers suggested retail
price the m s r P as we've talked about UM,
and it became a law right around that time around.
And what it does was it was supposed to lead
the or increased customer confidence UM and increase car sales
because you know, they could come into a lot and
(44:42):
they can see exactly what they're getting, they knew that
the manufacturer was saying that's what it's worth. It means
that they weren't they didn't feel like they were getting
taken every time they went on a lot, and you
know the the dealer was just jacking the price up,
you know, ten thousand dollars on them, or they didn't
feel like they had to shop around quite as much
as they did for a new car. It would be
kind of cool to do end up a so on
M s r P in the future Monroney labels, because
(45:03):
one interesting fact about those is that I think the
legislation did not require them to put any information on
there about for calls or known issues. No, no, nothing
like that. And you know the way this ties in
with with Kelly is that you know, even as late
as the nineteen nineties, car dealers would still have like
(45:24):
these handwritten signs that they would throw up in the
window and say, well, here's the features that it has.
You know, they would list them with with ink, you know,
on the window, or however they would do it with
the was that the shoe stuff, the shoe policy. They
could use that to do it, but it was kind
of a sloppy way to do it, and you know,
they would say like low mileage or fully loaded things
like that. But the way that Kelly innovated this part
(45:45):
of the process was that they they developed some kind
of desktop software that allowed dealers to print what would
be called the blue Book windows sticker. And you'll see
the blue Book window sticker on use cars even now.
It tells you the evaluation of that vehicle. So you know,
you walk on the lot the weekend or you know,
even when the dealers are there, but you can you
can really get a good sense of what that vehicle's
worth without having to purchase or go to you know,
(46:07):
I don't know if anybody even purchases a printed blue
book anymore, but you could without going to the Kelly
blue Book site, right and looking up the valuation of
that car. You know, while you're there, it's not that
hard for people to do. But there it is, right
for you on that vehicle in front of you. Yeah,
and every year since that time, millions of used cars
are sold displaying that they have a thing called the
(46:29):
Blue Book Suggested Retail Value, which is pretty much their
version of M S r P. Sure, yeah, for used vehicles.
And so it's really creative. I mean, it was a
great extension of their business, I think for them to
do something like that. So let's talk. Let's talk about
the what was it? You said, it's got consumers could
buy the Blue Book, and uh, well, how long is
(46:51):
this after they've got so they published it in uh
ninety six, and I have this written down, so oh yeah,
so they posted ninety six and here we are in
nineteen and finally they made a consumer edition version of
the Blue Book, and this is I don't know why
it took this long. I guess maybe it was just
there's a public outcry for it. I don't know exactly why,
but but they decided that, you know, we're going to
(47:12):
sell these two customers. And I'm sure that dealers didn't
like this at all but um, and here's an interesting
little side note. It quickly became the nation's number one
selling automotive book, and it made it on the USA
Today's best seller list, and that's something. So people immediately
went out and bought it. But again, this trade publication
that have been a round since y six, it's now nine,
that is sixties, seven years as a successful trade publication
(47:37):
without being made available to the public. But I feel, I,
I honestly feel Ben, We've we said this before. I
feel like I saw a Kelly Blue book before. Oh yeah,
me too, because I know I know before that, Um,
there was one passing around in like my family they
would have they would have one, and everybody's got that
(47:57):
uncle they call or whatever. Yeah, it's like, well and
has one or something. And you know it may be
four years old, but it's pretty close. You know, it's
not going to be dramatically different unless it's some you know,
really unusual circumstances, unless there's a systemic problem with the
vehicle that later emerges exactly right. Yeah, so um, it's
pretty close. And that's the way I saw it. And
I know that you said the same thing that you
(48:18):
know you saw these uh it kind of passed around
between people, but it wasn't something you could purchase on
the shelf brand new at the store until and during
the nineties we see the growth of the Kelly Blue
Book into the digital age. And I would say, now
it's uh, people are still buying the physical one, right,
(48:40):
but now it's primarily online. Yeah, I think. I mean
I mentioned just a moment ago. I doubt many people
are buying the physical book, but you know, the printed
book that you can hold in your hand. But maybe
there's a few holdouts out there. But in nineteen I believe, um,
it finally got its its own website, the KBB dot com,
which is Kelly blue Book dot com, and it was
(49:01):
running on a single PC out of the Kelly out
of the Kelly headquarters. Yum. I find that just strange,
but again, that's just the way things were. And here's
here's a really cool thing. Yeah, I'm sorry to interrupt.
That is so cool. They they used to charge people
four bucks a pop for the pricing report, right, this
is Yeah. That's something that a lot of younger listeners
(49:22):
probably won't understand either, is that you know, you go
to a lot of these sites and it's like, well,
that's to really see the information, it's gonna cost you
four or five bucks and you'd have to input your
your credit card information and a lot of them have
switched over to being free. And of course they caved
into pressure as well, because, um I think you know,
a lot of a lot of customers were saying, hey,
what's what's the deal. You know, I can I can
go out and buy this book. Now you're gonna charge
(49:44):
me for the convenience of looking at at my house.
But this is the way things are going. I think
you guys better straighten up, and you know, get that's
probably you know, the polite version of what they were
probably telling them, you know, in these uh and I
would guess at the time it's probably a complaint line
that you'd call in. Sure, yeah, because nobody really emailed
at that point, I mean, not many people did. It
was still relatively new. It's funny to think about it
(50:06):
isn't and relatively new, but I'm sure that it was happening.
But um so they decided that, you know, rather than
to take off their own customers, they decided to just
yank the charge. And I think it was only about
three weeks that they charged people through wasn't information, which
what what business ever does that? That's crazy to me.
I think that's that's really smart again, it's innovative, innovative
(50:28):
because they said, we can just switch to a business
that's run by ads. Yep, exactly right. So all right, well,
I think we've we've pretty much gotten to the end here.
Now there's a few little little things that we need
to to bring up here that in two thousand, Bob
and Mike Kelly retired from the company. So, um, you
know these people that we saw come on iss a
lot boys, uh, you know, changing tires and filling up
(50:49):
gas tanks and things like that. They they're not they're
not retired. Um. What else we'll see? I think? Um.
In two thousand to um Kelly bluebook dot Com or
kb B dot com introduced visitors to the fair purchase
Price for new cars UM, which is what I guess
they say smart buyers are really paying for them. So
you can go there and it's kind of like one
(51:11):
of these sites where they'll say, yeah, the dealer is
going to tell you that it's this and the m
s r P is this, But here's what people in
your area are starting to pay for this vehicle and
and that's more what you want to look at for,
you know, a bargaining point or starting point. Whether Um,
I think it's a pretty innovative site as far as
what they offer. I mean, they've been around for what
ninety years at this point, eight nine years, nine years
(51:33):
and successfully made the jump to other But if you
think about it, for the bulk of the company's history,
what they've really been in is the information business, that's true,
not the car business. Yeah, I guess. I mean it
was like forty years there in the car business, true,
but still but the majority of now you're you're still right,
you know what, Even so the majority of the time,
that's another fifty years they've been in just exclusively publishing.
(51:56):
So but they've been doing that for what ninety years,
I'm tight years and right since the beginning, Oh man,
I said, I feel like there are a couple of
things we I want to get to, but uh, in
the interest of time, I'm gonna have to I'm gonna
have to bow out and save these for nuts and bolts. Yeah,
I think we will. Yeah, all right, well, listeners, Uh,
we hope you enjoyed this. Episode. As we always say,
(52:17):
as much as we enjoyed making it, I was, I
was really interested in this story. You can learn more
about Kelly blue Book on their website, and I'd like
to hear if anybody ever got the Kelly blue Book
value or the Kelly blue Book price when they were
selling a used car or when they were buying one
from a dealer. Yeah, because you know, they always say
(52:38):
that's the starting point, that's where you can you can
begin your negotiation. But if someone comes in and says, hey,
it's like a no haggle deal. This is it, that's
what you pay, and and then you know, of course
we're people who are buying direct from the owner of
a vehicle. There's always going to be some kind of haggling,
and then you might run into somebody who who says,
no negotiation, that's the blue Book value. Sure, I spent
(53:00):
twenty grand on this sound system. There's always that. And
then the haggling over the condition of the vehicle is
it is it fair condition, is a good condition? Is
it poor condition? You know what? What's is it excellent
condition or even mint condition? I mean, I don't remember
the exact condition levels in the Kelly blue book. I'll
have to see if there's a mint, and I think
there is. There's several different levels, and I know that
(53:21):
there's that's always a point of contention between buyer and seller, right,
what is what is the best condition? Exactly right? Yeah, So, um,
interesting stuff. I I again, fascinating history. There's a there's
a lot to that whole family, the Kelly family, and
there's more than we've included here. I mean we had
to get the high points and um, we didn't even
talk about really how to use the site or what
(53:42):
the site really can give you, because it's more than that.
It's uh, industry insights and expert analysis, market market values
and trends and how will they come up with all those?
I mean, it's it's really a pretty interesting site, especially
if you have an interest in big data for analytics.
You'll enjoy poking around there. You might be surprised at
what you find. If you find something that you think
(54:04):
is really cool, tell us about it. You can find
us on Facebook, you can find us on Twitter. You
can listen to uh the U Haul episode and the
Hell's Highway episodes or series that we alluded to earlier
on our website. Car stuff show dot com and if
you want to send us an email directly, we can't
wait to read it. Our addresses car stuff at how
stuff works dot com. For more on this and thousands
(54:28):
of other topics, is that how stuff works dot com.
Let us know what you think, Send an email to
podcast at how stuff works dot com.