I’ve been in the car business for over 20 years. As with everything else, the internet has changed many parts of the auto industry. Many changes are positive, like the number of people you can market to when you are selling a car, and some are negative, like blanket internet appraisals of your individual car.
As a high-line, mostly imports, used car dealer, who has been a licensed independent for over a dozen years, I’ve gotten used to people with zero automotive experience telling me what my cars are worth, and I take it with a grain of salt. I know what a car is worth. Since I also know that people are full of fear as they plunge into the used car market, I am ready for their questions, defensiveness, and buying tactics. I am appropriately experienced to explain how I have priced a vehicle I have for sale. You can disagree with me if you like, and you don’t have to buy the car I have for sale, but I have done my research. What amazes me about the car buying cycle, is how people can be so defensive when buying a car, and completely defenseless when selling one. This is something that web-based companies like Kelly Blue Book seem to take into account with their pricing strategy for your car, your defenselessness. They miss the mark for the consumer, and in the process, greatly aid the dealer. My personal story with Kelly Blue book could take up dozens of pages, but a recent one in my memory is when selling a 2000 Toyota Tacoma SR5, Pre-Runner, Access cab, that KBB did not have a SR5 option listed to choose. A small thing for KBB, but I had twenty interested buyers trying to tell me I was asking far too much for my Tacoma, based on Kelly Blue Book values. The fortunate guy who ended up buying this beautiful, one owner, no accident, Tacoma, didn’t click to see what something was worth, he shopped around in town, and on line, and he knew a fair price for a good vehicle when he saw one. Nineteen other individuals lost out on a great truck. You still can’t believe everything you read. Applying good common sense should still be involved in the process of buying and selling cars.
Where does the everyday consumer fit in my story? You fit in everywhere. I talk to hundreds of people each year that are in the process of buying and selling a car. I get a glimpse of their lives, what their circumstances are at the moment, and how a buying or selling mistake, for many of them, takes a long time to recover from. It used to be said that your vehicle was your second largest purchase in life second only to your home. A significant purchase. Now, living in a time of easy credit, easy credit disasters, housing collapses, etc. it has moved into the largest expenditure for many people. This puts a vehicle into the category of largest investment for some people.
This is why I am troubled by the Kelly Blue Book and internet pricing, in general, and peoples willingness to believe and follow it. They don’t look at your car like your investment. They look at it as being worth very little to you at trade-in time, worth a little more, if you sell it yourself, and worth a lot more if a Dealer sells it.
For example, if you own of a 2005 Honda Accord EX V6, with 85k miles, and you decide you are going to buy a new one, you can visit Kelly Blue Book, and see that your local dealer will offer you around $9300. on a trade-in, if your car is in “Good” condition. So you trade it in. Let’s say you got the new car you wanted, pop back into the dealership to finish up some paperwork, the following week, and you see your used car on the lot for $14,600., a whopping $5300. more than you got on trade. If that doesn’t turn you off from trading your car in ever again, then you have much more money than time. I am also in disagreement with the KBB theory that the Private Party value should be $11,600., or $3000. less than the retail value. A car is worth what it is worth. If a dealer is going to ask retail for your car, you should too. It is your car, your investment, and you can ask whatever you think it is worth, and negotiate down, if you want. Remember, always, your car is an investment that you paid for, you maintained, and spent money on, and there was a time when a privately owned vehicle was worth more than a used one on the dealers lot. If you want to believe that a dealer spends thousands on reconditioning that vehicle, and that is why they are asking much more for it, fine. Then with all that reconditioning, the dealer should not have to push a $1500. used car warranty on the next person who buys it.
If you want to be smart with your money, and not throw thousands away, take your time when deciding to get a different vehicle. Know your car’s true worth by visiting many websites that show real vehicles for sale. Be prepared to answer questions about your pricing, and justify with facts, why you are asking what you are asking. If you are wise about the true value of your car, you will be the authority, and with all the information available today, you should be the authority about one of your largest investments. Your car.