Why Used Car Price Guides are Usually Wrong
If you're wanting to get a ball-park figure, that's fine. But if you think pricing guides are going to give you an accurate figure, that's a big mistake.
Pricing guides are meant to give you an average price, but the problem is there really isn't an "average" used car. Each one is different and what one may consider in good condition, another may consider junk.
Even though a pricing guide may state your car is worth $15,000, a dealer can easily knock that down by pointing out defects such as body scratches, non-factory equipment, unusual wear and tear - the list goes on and everything is <i>subjective</i>.
There are also large price discrepancies depening on your location. If you're trying to sell a convertible in North Dakota, you won't get as high a price as if you were selling it in sunny Florida.
The pricing guides try to factor in geography, but it's impossible to keep up with the highly localized pricing trends.
A final reason pricing guides shouldn't be relied upon is the tendancy to undervalue prices so as not to offend dealers. KBB has a seperate pricing guide for dealers called Karpower which you can only access with a paid subscription. Although I haven't personally seen the prices in that book, there are car buying experts that claim the wholesale prices are usually 5 to 10% higher than what you find in the free consumer guides.
So while the pricing guides may be a good source to get an an overall idea of pricing, don't think of them as set in stone. The only real way to determine how much your car is worth is to shop it around and see what the market determines.
3 Steps Every Car Buyer Needs to Take to Save Maximum MoneyThe key to getting the best deal is to gather price or lease bids from as many local dealers as possible. Then shop that best price around until no one can beat it. Here are the steps:
Step 1 Get Prices From My Trusted NetworkSelect the vehicle you're interested in to see if there are local dealers in my network who will provide you with their best upfront price. You will get direct access to an internet sales manager who you can further negotiate with online (no need to visit dealership).
Step 2 Get Prices From TrueCar / CarsDirectTrueCar, and CarsDirect are my top 2 online price quote recommendations. These services show you pre-negotiated prices from dealers closest to you - and the deals are usually pretty decent. But remember, you can still negotiate further.
Step 3 Complete my ChecklistFollow this up with my checklist to make sure you squeeze out every last bit of savings.
- Gregg Fidan
Each week, I'll keep you up-to-date on the latest car deals and news that might affect your purchase. This includes...
- Best Rebates, Incentives, and Lease Deals
- Latest Car Buying Scams and Tricks
- The Best & Worst Time to Buy a Car
- Which Cars You Should Avoid