| Used car prices are elusive, despite numerous | | | | Importantly, even these books don't settle the used |
| attempts to harness them. We've all heard of Retail, | | | | car pricing debate. Here's a publisher's note on the |
| Private Party and Trade-in values. But do these "help" | | | | inside cover of the latest NADA guide. |
| in determining a vehicle's real value? When we turn to | | | | It states: |
| the web for prices, it gets even more elusive. One | | | | The vehicle values in the N.A.D.A OFFICIAL USED |
| web site places a retail value on a car at $18,000. | | | | CAR GUIDE,(R) are developed by N.A.D.A's editors |
| Another puts it at $21,000. What should we believe? | | | | based on many sources of information. These include |
| If sellers are looking to get the highest price for the | | | | reports of actual transactions throughout each area |
| car they're selling, and the buyer wants to get the | | | | for which the guide is published. |
| best deal possible, is there such thing as a fair used | | | | The values in this guide assume a vehicle is clean. |
| car price for both parties? | | | | Appropriate deductions should be made for |
| The answer is yes, but both parties have to be on | | | | reconditioning costs incurred to put the vehicle in a |
| the same page. | | | | salable condition. An exceptionally clean vehicle or one |
| We'll call this "page" Fair Market Value. | | | | that bears a guarantee, warranty, or manufacturer |
| That being said, how do we interpret the market to | | | | certification should bring a premium price. |
| determine fair market value? Since most sellers and | | | | Please read your guide carefully when determining |
| buyers are going to try to interpret the market to | | | | the value of optional equipment. N.A.D.A.'s editors |
| his or her advantage, let's even the playing field. | | | | believe that most optional equipment has little or no |
| One of the most profound remarks I've heard to | | | | value on older cars. This is especially true of options |
| establish a better playing field for used car pricing | | | | that cost relatively little when new and which |
| comes from industry expert and owner of Medway | | | | deteriorate with age or use. Only the more popular |
| Imports, Barry Roth. He states: | | | | vehicle options are listed in the guide. Unless |
| "To find market value, you need to take all the | | | | otherwise stated, all vehicles are assumed to be |
| pricing data you find for a particular vehicle and throw | | | | equipped with automatic transmission, air conditioning, |
| out the high and low prices. What's left in the middle | | | | compact disc player (and/or AM/FM stereo cassette,) |
| is where you'll find a fair market value." | | | | power steering, rear window defroster, and tilt |
| While this doesn't address the used car pricing | | | | steering wheel. For other standard options, please |
| problem entirely, it does remove the unrealistic | | | | review each vehicle's listing. |
| numbers that many clutch to like the drowning to a | | | | As you can see, even the most respected used car |
| life preserver. It moves folks to more reasonable | | | | pricing guide "assumes" quite a bit, leaning heavily on |
| prices according to the market. | | | | the "opinions" of its editors to determine "appropriate |
| A lot of time is spent on popular web sites (for | | | | deductions" and thus the ultimate value of a particular |
| better or worse) to "help" determine used car pricing. | | | | car. |
| But one should also follow and watch the market to | | | | So where does this leave car buyers and car sellers? |
| see what cars are being advertised and sold for-if | | | | After both parties throw out the high and low prices, |
| they're being sold at all. | | | | it leaves them in the middle of the market. This is |
| Used car prices are also determined via auction | | | | where they'll each get a fair shake(assuming vehicles |
| pricing, and industry used car guides such as Black | | | | are "clean"). Finding and picking a good or "clean" car |
| Book and the NADA Official Used Car Guide. | | | | is another story. |