Eighty percent of car buyers are using the Internet to research cars and used car prices. For vehicle research, the Internet’s great! For vehicle prices, the Internet sucks! It sucks because the prices do not reflect reality for the buyer or the seller. Web sites that place values on vehicles have created more confusion than ever.

“My car’s worth $25,800.” “I looked up used car prices on the web and my vehicle’s worth twenty grand.” I hear quotes like these everyday. I wish, for the customer’s sake, that the values are real. By “real” I mean a viable number according to market value.

As hard as it is to accept, even for me as a dealer, what we think a car is worth, and what it’s actually worth according to “market value” is often drastically different.

To find a vehicle’s value the context must first be discussed. What’s context?

Context includes, but is not limited to:

1) Vehicle condition: mileage, maintenance, 1-owner…etc 2) Desirability: new model, special editions, just plain cool… 3) Seasonality: plow trucks, convertibles, 4-wheel drive…etc 4) The Economy: factory incentives, gas prices, hybrids, SUVs 5) Location: Beverly Hills versus the Bronx

Now, each of the above context variables could easily have several sub categories. For example…

Vehicle condition is extremely relative. One person may think there vehicle is perfect, someone else states it needs $1000 worth of work.

Desirability is also relative. A bunch of very cool bells and whistles may not add any value, or it may add $1000’s.

Seasonality is relative. A convertible in the summer has more value than one during a Chicago winter. A plow truck in June will have significantly less value than in November in the northeast.

Economic recessions, exorbitant gas prices, combined with manufacturer incentives can shift new and used car prices all over the map.

Location has a major effect on used car prices. A convertible in California is worth more than one located in Canada.

To summarize, context funnels down to market value. Web sites such as Edmunds, NADA, and Kelley have drastically missed this mark, creating a host misinformation. To be fair, these are great research sites, but they can not be the final say on price.

Stating that a vehicle is worth a certain amount of money based on a web site’s data does not take the above factors into account. It’s a value based on misinformation.

These web sites have created an aura of trust when in actuality, the values are mythical. The market is the real indicator of vehicle worth—for better or worse.

What should one do? Buyers and sellers would be wise to follow the market. Check out autotrader.com, cars.com, and/or *ebaymotors.com and watch what vehicles are being advertised and sold for. While these sites are not the final word either, they’re much more accurate than web sites leaning heavily on opinion and averages.

Note: eBay used car pricing is generally wholesale. In other words, it would not be accurate to compare a wholesale-priced eBay car (which may need a significant amount of reconditioning) to a retail-priced vehicle in showroom and/or perfect working condition.

In the end, and this come straight from industry expert, Barry Roth, “Take the highest price and the lowest price you find on the Internet and throw them out. The remaining numbers in the middle is where one should wade. But don’t forget value. Price is one thing—value is the real key to a great car”

For more on used car values visit www.medwayimports.com/

Most of us realize that used cars are usually less expensive than new cars. But we often still shy away from that kind of bargain because we may be intimidated by just what we may be buying. Could it be a great deal, or a lemon? And how do you know? Well, there actually is a way to work through the process of buying a great used car if you follow a few simple steps and stick to your guns. Would it surprise you that your first stop should be your credit union? Well, it should be.

You need to know how much car you can afford, and what the terms will be before you go car shopping. When you talk to your credit union, make sure you understand the difference in rates, if any, between various car model years. Newer car loans are generally lower than the interest rates charged for older models. Why? The lender assumes more risk with an older vehicle, and they pass some of that risk on to you in the form of a slightly higher rate. Does that mean you should only buy newer models? Not necessarily. That newer car will probably cost more, so even at a lower interest rate your payments could be higher than the payments on a less expensive older model at a slightly higher interest rate. Of course, your individual credit-worthiness will impact the loan rate you are quoted, as with any other financial product. Be sure you ask, too, if the credit union is sponsoring a used car sale any time soon. These events can give you a great place to comparison shop for dozens and dozens of vehicles. The prices are usually marked on (or in) the cars, and may be purported to be “non-negotiable.” But ask anyway. You may be able to negotiate a lower price, so why not check it out?

One more thing to check about car models you may be interested in is car insurance. It may be worth a call to your insurance agent to get a sense of what differences you might see in car insurance rates for different types of vehicles and models. Should you buy that Mustang or Taurus? It’s not really a surprise that a very powerful engine might be more expensive to insure, is it? So check that out before you buy. You may also want to ask your agent what differences in rates you might see depending on who is driving the car. If your 17 year old son will be one of the drivers, find out what that means to your insurance costs on the vehicle models you are considering.

What’s next? You are ready to start your additional homework. Sounds a little boring? Think about this. The salesman you are buying a car from has sold hundreds of them—or even thousands. How many have you bought? It makes some sense for you to spend a little time in research to even the playing field a little. And if you buy from a private owner, you still need to do your homework to know what little problems to look for that the owner himself may not even be aware of.

Fortunately, there are some disclosure regulations on your side. Some states require safety inspections and require that the results of those inspections be made available to prospective purchasers. Check with your state’s transportation department web site or your state secretary of state’s office or justice department as places to start looking for what help your state’s regulations may provide you. The Federal Trade Commission also has a Used-Car regulation which says that dealers must disclose whether or not used cars have any unexpired warranty protection. These same agencies can provide you information about any lemon laws which may exist in your state.

When you are looking for your car, you will generally find that similar vehicles are more expensive from dealers than from private parties. There are several reasons for this. Dealers often recondition cars. Some offer warranties. And consumers may actually have more recourse if something does go wrong with a purchase from a dealer than from a private party. Consider, also, your own knowledge about cars. If you are a shade-tree mechanic in your own right, you may be able to evaluate a car with more confidence than someone without that knowledge. If that’s your situation, it may be quite logical for you to gravitate toward purchase from a private party.

Most of us have some idea of what kinds of vehicles appeal to us. Make your short list, and hit the computer. You have a better resource than ever before to do some basic research about the models you are considering. One of the most popular such sites is http://www.edmunds.com/, but there are many others including Consumer Reports.

Let’s assume you have identified the vehicle of your dreams, you know what it will cost to insure, and you have a good idea of how to check it out. These sites can also give you vehicle reports on specific individual vehicles when you input the vehicle’s VIN number. The VIN number (Vehicle Identification Number) is usually visible just at the base of the windshield on the driver’s side. A vehicle history report on each candidate is absolutely critical when you have narrowed your choice to 3 or 4 cars. You may also want to circle back to your credit union again to find the ideal vehicle. Many large credit unions have buying services where they will take the information you provide about what vehicle you want and they will search for it for you. Then you can input the VIN and make sure the car is worth pursuing before you even go look at it. Make sure you know what, if any, fees such buying services will cost you.

Another source for your vehicle could be from companies such as Hertz and Avis which sell “program cars,” or cars which have come out of their rental fleets. They often have low mileage and are far less expensive than new cars, but even these vehicles should be thoroughly researched if you are considering purchasing one.

Would you believe that you may want to make one more pass at your credit union once you’ve found the perfect car? Suppose you’ve identified one at a local dealer, you are convinced you have their best price, and you’ve checked out the VIN number and talked to your insurance agent. And you know how much your credit union will lend you at what terms. But you don’t know what they will lend you on THIS car. A great way to confirm that “the price is right” is to ask your credit union exactly what they will lend on the car you want to buy. If it’s considerably less than what the asking price is, you may not have such a good deal after all.

Sound like a lot of work? It’s really not when you consider that our vehicles are going to transport us and our loved ones at 65 miles per hour (or more!) for what we hope is a good long time. Do the work up front to find a safe, reliable, affordable vehicle for your family. It’s a great use of your time!

Your Acura dealer is generally your link between you and that Acura you have your eye on. For instance, you may be able to get a discounted special price using a dealer closer to your location. Before plunking down for a new car, do the research; a car is a huge investment. This is easy if you already know what make vehicle you want. Also, bear in mind that after paying for the car there are other costs involved, registration and licensing being just two.

When you go to your Acura dealer, remember that he wants your business. Knowing this and the fact that there are other dealers out there will take away the stress of shopping for a new car. Before even venturing inside the dealership, get quotes from other dealers for the same vehicle and let the dealer know that you have this information. Showing that you did your homework will enhance your bargaining power. You may even get quotes over the telephone or internet from the Acura dealer you will be visiting.

Don�t feel bad about bargaining, the sticker price is not the best price that the vehicle can be sold for. Ask questions if you are unsure of terms used and what you are getting for your money. The following tips can help you in getting the best deal:

Visit Edmunds.com and look for the True Market Value of the car you want. Calculate the advertised rebates (if any). Ask them for their best price based on what you know

Finally, if you are not comfortable doing business with a particular dealership or salesperson, take your business elsewhere. You cannot function at your optimal level if you are not comfortable with the person you are dealing with. Once you are satisfied that you are being offered a fair price, it’s time to seal the deal.

Top Secrets Revealed: The Hassle Free Approach to Car Buying and Leasing, written by Marc Vanasse, was featured in “The Bookshelf” section of the May 2005 issue.

[Ed: "The last two times I purchased a new car, I was armed with loads of free price quotes from Edmunds.com."]

But according to Mr. Vanasse, “Most people don’t realize the best deal they will ever get is made by phone without haggling and spending valuable time in sales cubicles. ‘Top Secrets Revealed’ guides the reader step-by-step through the entire car buying process. I believe that consumers armed with my techniques will retain the dealer’s secret profits and have fun doing it.” [PRWEB May 26, 2005]

Before purchasing a new or used car, you may want to consider purchasing automobiles that are seized by the Government or repossessed by Banks. The Government and Banks use an auction process selling the car to the highest bidder.

Cars often auction off with starting price as low as $100 USD and it is not unusual where you can save up to 90% off the book value of the car. Winning the auction can save you thousands of dollars or can extend your purchasing power allowing you to buy into higher class of vehicles.

All makes and models from economy to Luxury vehicles are auctioned with clean titles. Currently, CheapCarSearch.com lists over 250,000 vehicles that you can choose from. The CheapCarSearch.com Website requires a low membership fee, but considering the potential savings, it is well worth the cost.

CheapCarSeach.com provides a search engine that quickly lists the cars available in your area. You simply select the automobile make and enter your zip code and you get a list of cars by year, model, color and starting bid.

You will need to pre-register to participate in the auction. CheapCarSearch.com handles this process and provides you with the bidding instructions.

Each vehicle is assigned an auction number and a location of the auction. You should inspect the vehicle prior to placing the bid and have a good understanding of the retail blue-book value of the car.

Edmunds.com is an excellent resource for researching prices and specifications for new and used cars. The Website lists the current dealer retail prices for all makes and models. As a goal, you should limit your highest bid to about 50% of the dealer retail price.

The final bidding price of the auction is determined by competition with other bidders. Try not to get caught up in the excitement of the auction. You may even want to consider attending an auction or two prior to bidding on the car you want to get a feel for the process.

If you are the winning bidder, you will need to settle the payment with the transaction clerk. You can use cash, check or credit to settle the bid. Sometimes the Auction Company will offer financing. Terms and settlement conditions are listed in the bidding instructions. Read and fully understand the bidding conditions prior to making any bids.

After you complete your purchase, you will receive an invoice that will allow you to drive or ship your new car to your home. The Auction Company will guarantee clean title to your new car and will aid you in making shipping arrangements if you request.

Although the auction process is intimidating at first, it is well worth the trouble since you can save thousands purchasing repossessed autos though auctions.

Tags: Auctions, Used Cars