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Car Buying, Car Selling, Car Values
#278 of 299 Re: Edmunds use car pricing inaccuracies [sellorbuy]
by MrShift@Edmunds HOST
Mar 02, 2012 (10:29 am)
All used cars are different, and you need a very large database to make sense out of used car values.
Price guides are only 'ballparks" that attempt to average out a lot of fluctuations.
For instance, here's a decent 1994 GT convertible for 1/2 the price that KBB says:
Now, if you feel the low miles are worth double the price, that's your decision to make, since such low miles are unusual. But to another buyer, low miles are not an asset, since a barely-driven car might have dried up seals, ornery brake calipers, or gummed up transmission.
Keep in mind one important thing----price guides do NOT set the market. Sellers do not set the market. Appraisers do not set the market!
It is the BUYER who sets the market. If your car is priced correctly, it will sell. If you cannot sell it after weeks of trying, this is not the fault of the price guides---your price is just too high for buyers.
Prices are ultimately driven by a supply and demand equation. If, for instance, you had a very very low mileage pristine car, and you put a premium price on it because of the spectacular condition and low miles---that in itself doesn't mean the car is worth what you are asking. If all the people in your city already have a low miles X car, and there are more low miles X cars than buyers, then the price will drop.
you've seen this yourself, in cars that are 'hoarded and put away" when new, because the owners think they will be instant classics.
But, guess what? So many people hoarded them, that when they all decided to sell at the same time, there was a glut of them--and hence, the price dropped.
So don't rely on price guides entirely---use them strictly as "ballpark" estimates to get you grounded in reality. That's really all they are meant to do.
#280 of 299 Re: Edmunds use car pricing inaccuracies [sellorbuy]
Mar 02, 2012 (10:56 am)
It would help immensely if you share what this 2002 car is.
Low mileage cars are always a crapshoot. Most guides either underallow or overallow for those miles. As shifty said, the market is set by the buyer. You were a buyer for your 'Stang at $9k. There are many who would scoff at such a price. When you go to sell it, you'll just have to wait for the right buyer, if you can.
#281 of 299 Re: Edmunds use car pricing inaccuracies [qbrozen]
Mar 02, 2012 (11:07 am)
Sorry I didn't mention the 20O2 is a Honda S2000. I even made contact with someone who just sold one with 60K miles for $15K. I understand everything said above, but my point is that the condition and mileage seem to not be accounted for by edmunds properly. If this is imprecise, they should give a range or something. Having this popular site understating the value causes buyers and sellers to not match up. The buyer wastes time waiting for that good deal that never comes and the seller loses buyers who aren't better educated to what typical transaction prices really are. Worse yet, Edmunds claims to be based on real transaction data. I say show me the data and the cars to back it up because I don't believe it.
#282 of 299 Re: Edmunds use car pricing inaccuracies [sellorbuy]
by MrShift@Edmunds HOST
Mar 02, 2012 (11:37 am)
yes all well and good but you are presuming that just because someone "sold one with 60K for $15K", that does not mean that someone else whom you never heard of sold one with 50K for $12,000. You don't know all the points of sale in other words, whereas Edmunds might.
I'm sure you catch my drift here---a database of one is not much of a database.
I also can't agree that buyers might not be 'better educated". The buyers ARE the teachers--they educate us!
I think the confusion here is, at least partly, based on the concept of impartiality. Appraisers, and hopefully, price guide analysts, aren't supposed to be in love with a certain car---they should be completely impartial.
As a seller, you can't be impartial. You would naturally have a bias toward higher pricing.
You *should* ask whatever price you wish (your 1st amendment rights)
But if you asked me (which you didn't) what I think the market for your car is, I'd both agree and disagree with you...I think Edmunds might be a bit low, but I think KBB is off the charts on the high end. I'm thinking around $12,500 would be fair market value for your car right now, based on comparables I've seen.
Basically I'm giving you an extra $2500 for the low miles, which is generous.
GOOD price guides are not about what people "think" a car should be worth---they are based on actual sales data---or should be.
it's not what the 1% sells for, it's what the 99% sell for.
#283 of 299 Re: Edmunds use car pricing inaccuracies [sellorbuy]
Mar 02, 2012 (11:56 am)
Ah, see now convertibles can vary widely depending on where you live.
I do agree, though, that this is worth quite a bit more. I only have a couple of comps that went through dealer auctions and those still had more miles. One in above average condition with 56k miles fetched $12k in Florida. And one with 72k got $10,900 in Texas.
So could you get $15k for yours selling it privately? Probably.
#284 of 299 Re: Edmunds use car pricing inaccuracies [Mr_Shiftright]
Mar 02, 2012 (12:25 pm)
Mr Shiftright: I totally agree with you on the going prices are what matters. But I've looked pretty hard and I don't believe there is data to substantiate the Edmunds numbers. Right now my dataset of 1 that I managed to get hold of after a sale is infinitely higher than what Edmunds has shown to me. All I know is that I have two occurrences where I searched the US for a car and could not find one in the stated condition close to the price listed by edmunds. The one shown by someone earlier from craigslist was not close to the condition of the GT I bought (I know I didn't go into details). So my point still stands: Edmunds is inaccurate. Maybe they don't have enough data for a particular model/year and so they try to extrapolate from a small sample, but they don't say that. They make a claim that their data is backed up by sales history. Honestly, I was surprised at what the S2K's seem to be going for. I went into it expecting less $, but i'm not going down on $15K for a couple of months (it's only been a day) because of spring coming and I'm in no rush.
#285 of 299 Re: Edmunds use car pricing inaccuracies [sellorbuy]
by MrShift@Edmunds HOST
Mar 02, 2012 (12:45 pm)
Sure--time of year really matters on a convertible.
Now when you say 'what they're going for' are you looking at asking prices or selling prices?
Asking prices are basically meaningless to an appraiser. When I'm appraising a car, I'll call up a dealer and push to know "what's your take price"?
Again, if you're selling in the "pristine" category, that's not what price guides focus on.
Okay I did a global (national) search for 2002 Honda S2000s, dealer and private party asking prices and got a national average asking price (over 100 hits) of $13,800. (To get this average, there were cars priced more than yours).
If we presume that selling price is say 10% less than asking, then I'm right on the money here at $12,500.
Even IF you sold your car for $15000, that doesn't mean that "all 2002 Honda S2000s with 42, 000 miles on them are worth $15,000".
A good price guide would try to find many many low mileage examples and average them out.
PS: I priced your car out using Edmunds, and got approx. $11,000 as value.
#286 of 299 Re: Edmunds use car pricing inaccuracies [Mr_Shiftright]
Mar 02, 2012 (2:41 pm)
$12,500 would be dealer auction money if its clean, though. He may be able to go into Carmax and get that kind of money.
#287 of 299 Re: Edmunds use car pricing inaccuracies [qbrozen]
by MrShift@Edmunds HOST
Mar 02, 2012 (6:01 pm)
Well if a dealer thinks he could flip it for a few thou, sure, but the seller isn't a dealer and doesn't offer financing, showrooming, national ads, etc. Dealers can always get more for a car--that's why price guides have private party AND dealer retail pricing.