| What's my vehicle worth? What a question! I wish that | | | | single day based off of blue-book-type retail numbers. |
| after 20 years in the automotive industry there was a | | | | For an interesting discussion on car values, check out |
| simple answer. One would think that with all the | | | | the article on bluebook pricing @ It's eye-opening! |
| information available it would make prices and values | | | | The facts are, however, we as a retail dealer are not |
| easier to obtain. In fact, in many ways, the numbers | | | | likely to get $22,800 for the Volvo even though the |
| are more unclear than ever. | | | | book says it's reasonable. Book values, or the values |
| The following e-mail conversation regarding retail car | | | | placed on vehicles by websites are guides based |
| prices and trade-in values highlights the confusion and | | | | heavily on opinions and averages. Go to seven |
| misconceptions about automobile price and value. | | | | different websites and you'll get seven different values. |
| This conversation occurred between me/Ted, the | | | | If you'd like, I can get you any used car you want at a |
| dealer, and Rich, the customer... | | | | great value like the Volvo...but I'd still only be able to pay |
| [Begin Email] | | | | $4,000 for the Impala. |
| [Ted] | | | | Since we don't use manipulative "feel good" numbers |
| Hi Rich... | | | | to inflate the trade-in value by increasing the sale price |
| Donna loves the 2006 Volvo. It's a perfect fit! | | | | of the Volvo, it appears as if we're offering too little for |
| Again retail value is: $23,800 | | | | the Impala. |
| Here's what Medway Imports can do: | | | | In actuality, the numbers are dead on. $4000 is a real |
| 2006 Volvo S40 Price.............$18,995 | | | | number! |
| 2001 Chevy Impala Trade-In Value...........$4,000 | | | | Note...none of this is a sales pitch, but the straight deal |
| Thanks Rich! | | | | on the "value" of the Impala in the real world. This is not |
| Note: the Volvo is still under its factory 4-Year | | | | to say that you couldn't sell it for $7,000, provided you |
| 50,000-mile warranty, free road side assistance...etc. | | | | want to do the footwork--advertising, replace the bald |
| [Rich] | | | | tires, service and recondition it, fix the rear seat...etc. |
| Hi Ted, | | | | In short, what makes up the value of a car is incredibly |
| Thanks for the information. The Volvo certainly is a | | | | complex and variable. |
| great price, but isn't my Impala worth $6,000-$7,000? | | | | What I wouldn't want you to think is that you're being |
| Kelly Blue Book lists the private party value at | | | | low-balled on the trade-in price. What is happening, and |
| approximately $7,995. I know that does not mean it will | | | | it's the only way we'll do business, is that you are being |
| sell for that amount. However, most of the ads that I | | | | given a "real value" and a "fair value" for your Impala. |
| have been seeing reflect a range of $7,000 to $9,000. | | | | The short answer to all this is that you're getting a |
| I would guess that based on the retail prices, the actual | | | | square deal on both ends--even though it may not |
| sale price would be discounted by $1,000-$1,500. That | | | | "feel" like it with the Impala. |
| would mean a reasonable expectation would place the | | | | [Rich] |
| value at $6,000-$7,000. | | | | Hi Ted, if I had to finance approximately $14,000 for |
| [Ted] | | | | the Volvo, my monthly payment would be around |
| You're right Rich...$6,000-$7,000 is certainly a | | | | $430/month (3 years @ 7%). I think that I may be |
| reasonable "retail value" for the Impala, but research | | | | more inclined to lease a 2007 loaded Infiniti, which |
| shows it's actually only selling for around $4,000. | | | | would probably cost me less on a monthly basis. |
| Interestingly, based on your math of knocking | | | | [Ted] |
| $1,000-$1,500 off private party bluebook would put the | | | | Hi Rich... |
| 2006 Volvo at a "reasonable" price of $22,800, as it | | | | Leasing has many positives; however, at the end of 3 |
| retails for $23,800 to $24,500 depending on which | | | | years the value of the Infiniti to you would be $0. The |
| source you use. | | | | residual value of the 2006 Volvo S40 is $9625. |
| The facts are, however, neither the Impala nor the | | | | One of the major downsides of leasing is that at the |
| Volvo will sell for these retail values--not in today's | | | | end of the lease...you have NO equity. |
| market anyway. | | | | I will not in anyway be offended if you choose to |
| [Rich] | | | | lease, or buy somewhere else. |
| I can lease an Infiniti which would probably cost me | | | | What I know, and what I can do for you is get you a |
| less on a monthly basis. My partner just leased a 2007 | | | | great "value" for your dollar. |
| loaded Infiniti for 39 months, (78,000 miles) for $558.00 | | | | $18,995 for a vehicle that is priced $4805 under the |
| month. Cap reduction was only $595.00. | | | | low value of $23,800 is a great value. |
| I'm guessing that I could lease the same car for 3 | | | | $4,000 for an Impala that needs $1,000 or more in |
| years with 36,000 miles for no more than $400/month. | | | | reconditioning is a real price. |
| They're also willing to give me $7,000 for my 2001 | | | | In short, you can't buy wholesale and expect to trade |
| Impala. | | | | in for retail. |
| I'd appreciate your thoughts! | | | | Interestingly, the current wholesale price of the Volvo is |
| [Ted] | | | | $19,000 to $20,000. In other words, I couldn't even buy |
| Hi Rich... | | | | this car right now for $18,995. |
| Your guesses "might" be close; however, this is a | | | | Those are my thoughts. |
| classic example of the confusion surrounding trade-in | | | | I hope this helps in your decision making process. |
| values and the actual vehicle worth. | | | | [End Email] |
| That $7,000 they will pay you is called a "feel good" | | | | As you can tell from this conversation, the perception |
| number. Dealers use it all the time, and then whack you | | | | and the reality of used car prices is very different. This |
| on the retail sale end of your new car. | | | | article illustrates that pricing used cars must be done in |
| In other words, as a dealer, I will gladly give you $7,000 | | | | context. An arbitrary number set by a website or book |
| for your Impala provided you're willing to pay $22,800 | | | | distorts the real-life values for the car buyer and the |
| or more for the 2006 Volvo....as you can see, based | | | | seller. These "values" make everyone distrustful, |
| on these numbers, you'd spend more. | | | | uneasy, and confused. The auto industry doesn't need |
| It's stunning how often people fall into this trap every | | | | any more of this! |