Once car shoppers settle on the price for a new car, the most-common next step is to haggle over the value of their trade-in.
Salesmen often go to some back room and produce a tiny book that indicates a trade is worth several thousand dollars less than you might have seen in newspaper ads. Used-car guidebooks - the Kelley Blue Book, the White Book, and the yellow books from the National Automobile Dealers Association - base their figures on wholesale prices dealers paid for cars, and retail prices they sell them for. The gap is where dealer profits lie. In fact, dealers generally make more money on sales of used cars than new ones.
Customers rarely have the know-how to refute a dealer's trade-in offer. After all, dealers have a better idea of a car's value on the open market since they sell more used vehicles than anyone else.
But now Edmunds, a purveyor of consumer price guides for decades, is publishing a new price list to give consumers a more realistic idea of their car's worth.
Called True Market Value (TMV), the service tells consumers what their car would be worth if they sold it privately. This figure lies somewhere between the dealer's wholesale and retail prices. So if the dealer makes a lowball offer, a car owner knows if it's worth keeping an old car and selling it privately.
The TMV price is based on the car's options, mileage, overall condition (either outstanding, clean, average, rough, or damaged), color, and location. An Aztec gold Mustang, for example, may be tres cool in Arizona, but requires a steep discount in Boston.
The service is available for free at Edmunds.com, and promises to make car selling easier whether you do it yourself, or trade your old heap to a dealer.
To be sure, dealers are likely to offer less than TMV for your trade, and will turn around and sell it for more. That's their business, and they provide service and warranties to justify some of that difference. But even if you trade your car in, now you'll know how much that extra convenience is worth.
(c) Copyright 2001. The Christian Science Monitor