| Eighty percent of car buyers are using the Internet to | | | | truck in June will have significantly less value than in |
| research cars and used car prices. For vehicle | | | | November in the northeast. |
| research, the Internet's great! For vehicle prices, the | | | | Economic recessions, exorbitant gas prices, combined |
| Internet sucks! It sucks because the prices do not | | | | with manufacturer incentives can shift new and used |
| reflect reality for the buyer or the seller. Web sites that | | | | car prices all over the map. |
| place values on vehicles have created more confusion | | | | Location has a major effect on used car prices. A |
| than ever. | | | | convertible in California is worth more than one located |
| "My car's worth $25,800." "I looked up used car prices | | | | in Canada. |
| on the web and my vehicle's worth twenty grand." I | | | | To summarize, context funnels down to market value. |
| hear quotes like these everyday. I wish, for the | | | | Web sites such as Edmunds, NADA, and Kelley have |
| customer's sake, that the values are real. By "real" I | | | | drastically missed this mark, creating a host |
| mean a viable number according to market value. | | | | misinformation. To be fair, these are great research |
| As hard as it is to accept, even for me as a dealer, | | | | sites, but they can not be the final say on price. |
| what we think a car is worth, and what it's actually | | | | Stating that a vehicle is worth a certain amount of |
| worth according to "market value" is often drastically | | | | money based on a web site's data does not take the |
| different. | | | | above factors into account. It's a value based on |
| To find a vehicle's value the context must first be | | | | misinformation. |
| discussed. What's context? | | | | These web sites have created an aura of trust when |
| Context includes, but is not limited to: | | | | in actuality, the values are mythical. The market is the |
| 1) Vehicle condition: mileage, maintenance, 1-owner...etc | | | | real indicator of vehicle worth-for better or worse. |
| 2) Desirability: new model, special editions, just plain | | | | What should one do? Buyers and sellers would be |
| cool... | | | | wise to follow the market. Check out autotrader.com, |
| 3) Seasonality: plow trucks, convertibles, 4-wheel | | | | cars.com, and/or and watch what vehicles are being |
| drive...etc | | | | advertised and sold for. While these sites are not the |
| 4) The Economy: factory incentives, gas prices, | | | | final word either, they're much more accurate than |
| hybrids, SUVs | | | | web sites leaning heavily on opinion and averages. |
| 5) Location: Beverly Hills versus the Bronx | | | | Note: eBay used car pricing is generally wholesale. In |
| Now, each of the above context variables could easily | | | | other words, it would not be accurate to compare a |
| have several sub categories. For example... | | | | wholesale-priced eBay car (which may need a |
| Vehicle condition is extremely relative. One person | | | | significant amount of reconditioning) to a retail-priced |
| may think there vehicle is perfect, someone else | | | | vehicle in showroom and/or perfect working condition. |
| states it needs $1000 worth of work. | | | | In the end, and this come straight from industry expert, |
| Desirability is also relative. A bunch of very cool bells | | | | Barry Roth, "Take the highest price and the lowest |
| and whistles may not add any value, or it may add | | | | price you find on the Internet and throw them out. The |
| $1000's. | | | | remaining numbers in the middle is where one should |
| Seasonality is relative. A convertible in the summer has | | | | wade. But don't forget value. |
| more value than one during a Chicago winter. A plow | | | | |