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