Thanks all for your replies. It is very helpful and I'm glad I started this discussion before going into the shop. I was offered $225, then $250 when I turned to walk out. I declined and could tell they were disappointed.
I need to check the laws about selling here in my state, IN. I will most likely post on this forum.
Glad you didn't walk in cold, with no sense as to its value. Knowledge is power when it comes to gun trading.
As for your purse weapon, you really need to give that some more thought. The 40S&W is a very effective round, but it's a difficult round to master, and particularly so in a small automatic. Handguns are counterintuitive to most folks. They think a small gun is easier to handle and shoot as compared to a big gun, but the truth is the exact opposite. You then amplify the problem by selecting a more powerful round such as the 40S&W. I would never recommend a small auto chambered in 40S&W for an inexperienced shooter.
Kahr makes a fine line of small automatics. When I'm looking at used pistols at the gun counter and I see a Kahr, most often it's a 40S&W. Folks make the purchase, load that sucker up, hit the range, and quickly realize it's more than they can handle. So it's off to the consignment shelf, or they take a beating and trade it in on a 9mm, or its less effective cousin the 380acp.
Every handgun has some pluses and minuses. For example, you had a few folks recommend a small revolver, typically chambered in 38sp. It's a fine choice. You own a revolver (although apparently you rarely shoot it) so presumably you're familar with its operation. Most folks understand their operation more than autos. The heavy and long trigger pull makes it less likely to go bang by accident, and you can shoot multiple rounds through your purse (meaning you don't have to pull the gun out of your purse) should the need arise. An automatic is likely to jam in that scenario. The down side is that the heavy double action trigger makes it difficult to shoot accurately, and without a slide soaking up recoil (meaning an automatic), the recoil can be stiffer, and more punishing, particularly with the smaller and lighter versions you are going to want for your purse. Revolver capacity is typically less than an auto, and the reloads are slower. Ironically some would recommend your current revolver as a fine purse weapon, but I can appreciate you probably think it's too heavy and clunky for your purse.
Here's what I would recommend. Find a shooting range in your area that has a nice selection of autos and wheel guns to rent. Try a few out, and see what you think is going to work best for you. I would say take your officer friend, but given his advice perhaps you need to ask someone else to accompany you. Remember the gun is for you, not the person who may come with you. I would also recommend you consider some firearm and shooting classes.
Good luck.
You should have no problem selling it, but please don't do so at a gun shop. You are likely going to get significantly less than it's actual value. 
I have a great deal of experience with both autos and revolvers, but I much prefer wheelguns. In fact I'm carrying two right now, my M66-1 2 1/2" and a M340PD. 
