I read an amusing news article recently, discussing the best way to determine used car values. Now, I suspect that this particular reporter’s intentions were good. However, as a reporter, and not a seasoned automotive professional, he lacked even the basics of used car prices.
Here’s the article…just don’t follow his advice, because you’ll spend $1000’s of dollars unnecessarily. I’ll tell you why in a minute…
(CBS 3) PHILADELPHIA If you’re in the market for a used car, you want to feel confident you’re not getting ripped off. So 3 On Your Side’s Jim Donovan has some helpful do’s and don’ts for researching, negotiating and financing.
Picking the right used car can be a tough decision. So before you rush to make an offer, Good Housekeeping says first determine the type of car you want.
“Then to find out the value of those cars, go online to a reputable pricing site like “edmunds.com,'” said Judy Coyne Deputy Editor Good Housekeeping.
“At no charge whatsoever, an Internet user can go to “edmunds.com” and get the full-load of information that they need about a used car. And that would include the review of that car, the optional or standard equipment, as well as the pricing. And that will really help the consumer bring that research to the dealership when they are ready to negotiate for that car,” said Jeannine Fallon Edmunds.com.
Carfax.com $20/one car
Once you have a car’s vehicle identification number or vin, then head to carfax.com for a sneak peak at the vehicle’s history. You can find out if the car was ever totaled or recalled.
“And to a well-trained professional, you can even find out where it was built, when it was built, what model it is, what engine it has. All that information is available and it is important. Because stolen vehicle history, salvaged titles, things of that nature, are all assigned by the vin – the vehicle identification number,” said Steve Costa General Sales Manager Warnock Dodge Chrysler Jeep.
Good Housekeeping says be sure to ask the owner or dealer for the car’s repair records as well.
WOW! Thanks for the advice, Jim!
Please excuse the sarcasm, but I choked on my donut when I saw that “Jim” quoted “Good Housekeeping” as an authoritative source to determine fair used car prices.
Here’s the real story: Edmunds, Kelly Blue Book, NADA, whatever Internet source you want to use, will undoubtedly have higher prices than fair market value prices. Internet-based used car prices are often $1000’s higher than market value.
Moreover, these Internet sources have large pricing disparities—the highest I’ve seen recently is $7,000. $7,000!
The only accurate guide is the market. Yes, it’s harder to follow, harder to predict, and it’s time consuming. Nevertheless, we pros (Jim and Good Housekeeping excluded), know how to determine a used car value that’s actually realistic.
A clean, low-mileage 2003 SAAB 95 Linear has a market value of $12,900. But Edmunds, Kelly Blue Book, and NADA put the market price @ $16,497. It would be great to sell the car at $16,497, but the problem is IT WON’T SELL AT THAT PRICE! It’s unrealistic!
This is one example of hundreds…
So what should the consumer do?
First, the above Internet sources are great for vehicle information. So use them for research, but take the prices with some salt. Second, visit autotrader.com or cars.com to get an idea of what used cars are being advertised for. Also visit ebaymotors.com and look at the “completed listings” to give you an idea of the wholesale environment.
For more information on realistic used car prices, click Used Car Prices at our resource center for a wealth of informative articles and information.