| The Internet has been touted as the greatest | | | | the seller, and the lender, are all on |
| resource for the used car buyer. Prospective | | | | different pages. Each player wants the most |
| buyers can find trade-in, private party, and | | | | advantageous price based on the part he or |
| retail values in a heartbeat. The question to | | | | she is playing. The market is the only |
| consider, however, is what Internet source is | | | | element that evens the playing field. The |
| right? The three major sites: NADA, Edmunds, | | | | point here is to demonstrate that the market |
| and Kelly Blue Book are clamoring to be the | | | | is the true source to determine a REAL and |
| Trusted Authority on used car values. Yet | | | | FAIR used car value. In order to get a fair |
| price discrepancies are frequently in the | | | | price, according to the market, a used car |
| $1000's from site to site. Which web site, if | | | | buyer should aim for the middle. Avoid the |
| any, is the most accurate source for the used | | | | highest prices and be realistic and flexible |
| car buyer? To illustrate the discrepancies, | | | | about the lowest. Stay somewhere in the |
| here's an everyday example: NADA may retail a | | | | middle to get a fair deal. If you want a |
| 2003 SAAB 9-5 Linear at $15,996, Kelly Blue | | | | great deal, follow the market closely. If |
| Book prices it at $17,456, and Edmunds prices | | | | buying from a retailer, eBay and auction |
| it at $14,800. These are all retail values, | | | | prices don't count, as these are wholesale |
| assuming excellent or clean condition. | | | | venues. Check out Cars.com, AutoTrader.com, |
| $17,456 minus $14,800 is a $2,656 difference. | | | | and some of the other Used Car Sources. See |
| That's a huge price difference in the highly | | | | what the vehicle you want (including miles, |
| competitive used car market. The retail | | | | equipment and accessories) is being |
| values placed on many vehicles by these web | | | | advertised for. Again, shoot for the middle! |
| sites can have even larger price differences | | | | Use the popular Internet resources, but don't |
| - some as high as $4000 to $8000 dollars. | | | | follow them blindly. You may actually pay |
| These gigantic price fluctuations can leave a | | | | significantly more than market value. Having |
| used car buyer spending $1000's extra, | | | | said all this, this doesn't mean that used |
| depending on which guide he or she used. | | | | car dealers are going to stop trying to low |
| Moreover, private party and trade-in sale | | | | ball trade-in offers. And of course every |
| prices do not accurately account for vehicle | | | | dealer wants to sell its vehicles for a |
| condition, and less than 5% qualify as | | | | maximum. But remember, the same goes for car |
| excellent. Vehicle condition is a critical | | | | owners, but in reverse. They want the highest |
| variable. An owner might think his trade-in | | | | price for a trade and the lowest retail price |
| is in stunning condition and thus worth X, | | | | on a vehicle. When using Internet sources to |
| based on his Internet research. An expert may | | | | determine a used car value, be sure to enter |
| know it needs $1000's in repairs and | | | | the correct information. This may sound |
| reconditioning costs. The answer to "whose | | | | elementary, but option packages, models, |
| prices are right" is that none of the big | | | | miles, color, equipment, engine, |
| three web sites reflect used car prices | | | | transmission, gear ratios...etc, can be |
| accurately. Most often, the prices are too | | | | confusing. Yet these are important variables |
| high on the retail side, questionable on the | | | | that will affect prices dramatically. In |
| trade-in side, and confusing on the private | | | | short, the wrong information skews the |
| side. So what or who is the real authority? | | | | numbers. Finally, what really needs to be |
| The answer is the Market! The market (i.e., | | | | highlighted with NADA, Edmunds, and Kelly, as |
| the folks grinding it out everyday in the | | | | well as other Internet sources, is that they |
| used car market place - sellers and buyers) | | | | are GUIDES. They are excellent resources for |
| reflect true market value. Web sites are | | | | vehicle information, but weak resources for |
| guides only. The used car prices from these | | | | prices. This is not to bad mouth any of these |
| sources need to be measured against the | | | | sites - they are great starting points. |
| reality of the market. Here's a scenario to | | | | Remember, however, that these guides may or |
| illustrate the importance the market plays on | | | | may not be in the car buyer's favor. Fair |
| used car values. In the Northeast, the banks | | | | used cars prices are dictated by the market. |
| rely on NADA, used car dealers prefer to use | | | | Yes, do your research on the Net, but don't |
| Kelly Blue Book, and used car buyers are | | | | cling to it. Use the Internet only to find |
| turning more and more to Edmunds. Now the | | | | the used car market's middle ground. |
| dealer will likely want to use the inflated | | | | |
| (Excellent condition) Kelly Blue Book value. | | | | Ted Olson is the founder of RepairTrust - a |
| The buyer wants an unrealistic Edmunds price, | | | | website dedicated to help the auto consumer |
| and the bank wants to use an under-valued | | | | avoid the pitfalls of the automotive |
| NADA price. In other words, the three primary | | | | industry. Click Auto Repair Costs to learn |
| people in the car buying process - the buyer, | | | | more... |