Used Car Pricing The Insanity Of Used Car Prices

							Title:
Used Car Pricing: The Insanity Of Us
ed Car Prices!

Word Count:
659

Summary:
Used car prices are elusive, despit
e numerous attempts to harness them
. We’ve all heard of Retail, Privat
e Party and Trade-in values. But do
 these “help” in determining a vehi
cle’s real value? When we turn to t
he web for prices, it gets even mor
e elusive. One web site places a re
tail value on a car at $18,000. Ano
ther puts it at $21,000. What shoul
d we believe?

If sellers are looking to get the h
ighest price for the car they’re se
lling, and the buyer wants to get t
he best ...


Keywords:
used car prices, used car values, o
nline used car sales
Article Body:
Used car prices are elusive, despit
e numerous attempts to harness them
. We’ve all heard of Retail, Privat
e Party and Trade-in values. But do
 these “help” in determining a vehi
cle’s real value? When we turn to t
he web for prices, it gets even mor
e elusive. One web site places a re
tail value on a car at $18,000. Ano
ther puts it at $21,000. What shoul
d we believe?

If sellers are looking to get the h
ighest price for the car they’re se
lling, and the buyer wants to get t
he best deal possible, is there suc
h thing as a fair used car price fo
r both parties?

The answer is yes, but both parties
 have to be on the same page.

We’ll call this “page” Fair Market V
alue.

That being said, how do we interpre
t the market to determine fair mark
et value? Since most sellers and bu
yers are going to try to interpret
the market to his or her advantage,
 let’s even the playing field.

One of the most profound remarks I’
ve heard to establish a better play
ing field for used car pricing come
s from industry expert and owner of
 Medway Imports, Barry Roth. He sta
tes:

“To find market value, you need to
take all the pricing data you find
for a particular vehicle and throw
out the high and low prices. What’s
 left in the middle is where you’ll
 find a fair market value.”

While this doesn’t address the used
 car pricing problem entirely, it d
oes remove the unrealistic numbers
that many clutch to like the drowni
ng to a life preserver. It moves fo
lks to more reasonable prices accor
ding to the market.

A lot of time is spent on popular w
eb sites (for better or worse) to “
help” determine used car pricing. B
ut one should also follow and watch
 the market to see what cars are be
ing advertised and sold for—if they
’re being sold at all.
Used car prices are also determined
 via auction pricing, and industry
used car guides such as Black Book
and the NADA Official Used Car Guid
e.

Importantly, even these books don’t
 settle the used car pricing debate
. Here’s a publisher’s note on the
inside cover of the latest NADA gui
de.

It states:

The vehicle values in the N.A.D.A O
FFICIAL USED CAR GUIDE,® are develo
ped by N.A.D.A’s editors based on m
any sources of information. These i
nclude reports of actual transactio
ns throughout each area for which t
he guide is published.

The values in this guide assume a v
ehicle is clean. Appropriate deduct
ions should be made for recondition
ing costs incurred to put the vehic
le in a salable condition. An excep
tionally clean vehicle or one that
bears a guarantee, warranty, or man
ufacturer certification should brin
g a premium price.

Please read your guide carefully wh
en determining the value of optiona
l equipment. N.A.D.A.’s editors bel
ieve that most optional equipment h
as little or no value on older cars
. This is especially true of option
s that cost relatively little when
new and which deteriorate with age
or use. Only the more popular vehic
le options are listed in the guide.
 Unless otherwise stated, all vehic
les are assumed to be equipped with
 automatic transmission, air condit
ioning, compact disc player (and/or
 AM/FM stereo cassette,) power stee
ring, rear window defroster, and ti
lt steering wheel. For other standa
rd options, please review each vehi
cle’s listing.

As you can see, even the most respe
cted used car pricing guide “assume
s” quite a bit, leaning heavily on
the “opinions” of its editors to de
termine “appropriate deductions” an
d thus the ultimate value of a part
icular car.

So where does this leave car buyers
 and car sellers? After both partie
s throw out the high and low prices
, it leaves them in the middle of t
he market. This is where they’ll ea
ch get a fair shake(assuming vehicl
es are “clean”). Finding and pickin
g a good or “clean” car is another
story.