Around 80% of people who want to buy a used car research them and their prices online. They usually compare NADA used car values to obtain a reasonably good estimate of how much they should pay for a car, or receive for the one that they are selling. However, while the internet is certainly a great tool for researching cars, it is not actually a good place to get a definitive answer on values of car.
The reality is that a price that you find online isn't likely to be real. It isn't based on actual market value. It is an average, which means that the actual price will either be above or below that. This is why, when you compare NADA used car values, you need to take them with a pinch of salt.
Factors Influencing Vehicle Prices:
When you compare prices online, what you will get is the price of an average car, in average condition, with average mileage. That car, in reality, may not exist. In addition, there are some factors that influence the price of a vehicle, including:
- Its condition – its mileage, how it has been maintained, how many owners it has had, and so on.
- Its desirability – how new is the car, does it have any special features, or is it simply a cool car?
- Its seasonality – whether it has four wheel drive, is a convertible, is a plow truck, and so on.
- The economy – the current gas prices, what types of incentives are in place, how much people can spend, the financial health of the dealer, etc.
- Your geographical location – do you live in the Bronx or in the Hamptoms?
The factors above, which are all relative, end up determining what the real market value is. Unfortunately, when you compare NADA used car values (or Kelley or Edmunds), you don't actually get this real picture. So, while the sites are great for research, they won't tell you what you will actually pay. They also do not give you a negotiating price – no dealer will agree to significantly lower the price of a vehicle just because your NADA research said it should be. They are the ones that set the real prices, and while you can usually negotiate somewhat on that, your online research doesn't give you any real negotiating power.
What You Should Do:
Although, as you can see above, the online car prices usually miss the mark, they do have their place when researching the value of a specific car. Their place is to provide an estimate of the actual price. People are likely to be on a budget, after all, and it can tell them whether they can be in the market for a BMW, or whether they need to be contented with a ten year old Honda instead. Some experts agree that you should look for the highest price you can find for a certain vehicle, and for the lowest. The reality will be somewhere in between those two. Finally, you must remember that car price and car value are not the same thing, and sometimes it is better to pay a bit more.