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Car Forum / Driving, Maintenance, Tuning / General Car Topics / February 2005How do they come up with Used Car pricing guides
Hello, Does anyone out there know how Kelly, NADA, etc. come up with their used car prices? Do they use some formula, statistics, actual pricing data, some combination? Thanks, dc > Hello, > [quoted text clipped - 4 lines] > Thanks, > dc Dunno about today, but at one time, NADA derived their prices from questionnaires they furnished to used-car managers at dealerships. Just imagine, for instance, a Buick u/c manager who wanted to get top prices for his used Buicks when he sold them---what would he do? (Easy): inflate the prices he was actually allowing on trade-ins when he completed the questionnaire. Fair? Accurate? You be the judge! I was in the car business for a # of years--was late in my career before I ever saw a Blue Book! And, during my last years in the business, Kelly was a 'best friend' when it came down to the customer shopping my lot with a Kelly book in his hand. or an NADA book, for that matter. BlackBook, a weekly wholesale publication, used to be, & still is as far as I know, developed from a BB-rep. who physically takes notes of cars actually being sold along with his determination as to whether it was Rough, Average, Clean, or Extra-clean--those 4 categories. It had no retail values--only wholesale. And we dealers relied more on BB than we did on NADA, for reasons already quoted. HTH & good luck. s with there being so many models, brands and vintages out there today, i wonder how much work it must be to collect a useful sample?! there must be some extrapolation involved somewhere... > with there being so many models, brands and vintages out there > today, i wonder how much work it must be to collect a useful > sample?! there must be some extrapolation involved somewhere... Regardless of the origins, I bet that today there is a real sense in which the guides drive the market and the pros particularly just have their own variation on the guide price where they dont agree. > > with there being so many models, brands and vintages out there > > today, i wonder how much work it must be to collect a useful [quoted text clipped - 3 lines] > in which the guides drive the market and the pros particularly just > have their own variation on the guide price where they dont agree. I'm inclined to agree with you. However, one problem has recently arisen: REAL EXAMPLE: Black Book, and maybe NADA--dunno for sure--shows clean wholesale on Honda Odyssey's like several (meaning 2 or more?) thousand dollars higher than they are bringing in the real market. Makes it hard to sell them at whls. markets, 'cause so many dealers have relied on BB when trading for them. Then, when he gets it to market and it brings way less than he put in it to trade for it, he can't sell it--or does so at far less than he'd planned. And unless he made a screaming deal up front, hiis 2-car washout will result in a loss. So, even tho' guides may taint prices somewhat, like in this particular case, it causes losses when it can't MAKE the would-be buyers step up & pay the higher book reflection of worth. So, either your idea, with which I agree somewhat, has to really kick in, or else BB has gotta get off their "extrapolating **rses" & get the real values in place. s >> > with there being so many models, brands and vintages out there >> > today, i wonder how much work it must be to collect a useful [quoted text clipped - 15 lines] > somewhat, like in this particular case, it causes losses when it can't MAKE > the would-be buyers step up & pay the higher book reflection of worth. Yeah, bound to be some obvious problems like that. > So, either your idea, with which I agree somewhat, has to really kick > in, or else BB has gotta get off their "extrapolating **rses" & get the real > values in place. s Or just realise that some book values have problems. Bet the best of them have realised that for decades now. > >> > with there being so many models, brands and vintages out there > >> > today, i wonder how much work it must be to collect a useful [quoted text clipped - 24 lines] > Or just realise that some book values have problems. > Bet the best of them have realised that for decades now. Quite true. Not merely trying to get included in your category (but that too!!!), I used to jokingly tell my buddies when they'd see me looking at a book & tell me 'You'd better throw that thing away--it'll get you in trouble': my reply was a standard, "At least when I find this value, I will know one figure NOT to pay for it"!. Have a good 'un. s >with there being so many models, brands and vintages out there today, i >wonder how much work it must be to collect a useful sample?! there >must be some extrapolation involved somewhere... I'm guessing you are right, about the extrapolation. Since they can not possibly get the 'fair market value' from every transaction that takes place. The interal family sales(being low) would ascew the average. They might have some deal with dmv's to get this information, and then toss out the top 20%, and lower 20%, so still just mathatical guessing. Good point, tom @ www.CarFleaMarket.com NADA sureveys ads and dealer asking prices. As far as I can tell, the NADA prices are fantasy prices. They are what the dealer or individual wishes they could get. Only good prices are compliations based on vehicle auction prices (black book). Those are harder for average Joe's to get. Kelly and NADA are more like MSRP that actual bottom line selling prices. Ed > Hello, > [quoted text clipped - 4 lines] > Thanks, > dc |
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