Selling or buying a used car can be increasingly difficult if you lack the knowledge of the new or used vehicle marketplace. This is especially true with the used marketplace. Even if you are in tune with the latest happenings within the market, so many factors can influence the value of an individual vehicle.
Because of this, you want to look for data aggregators like Edmunds True Market Value Pricing Data to see what the estimated value of a vehicle is before buying or selling one. However, you might be wondering whether or not this data is entirely accurate and if it should be relied upon.
By the end of this article, you will have a good idea of where the data they use comes from and whether or not you can reliably use it for pricing used vehicles whether buying or selling.
What The Edmunds True Market Value (TMV)?
This is essentially a pricing system that you can use to help figure out the average transaction price for a new or used vehicle. It aggregates what others are paying on average within your local area to ensure that you have a good price target for negotiations. However, Edmunds has since rebranded it as the Edmunds Suggested Price recently .
The price is a good tool to use when vehicle shopping. It’s meant to be a recommendation of what you should pay for the vehicle without taxes and fees included.
Where Does Edmunds Get The Data?
Edmunds notes that they get the data directly from a dealer management system that consists of 5,000 different dealerships and dealer groups all around the United States. They note that they receive these key data points from nearly 25 percent of all of the dealerships in the country.
How Accurate Is The Data?
The good news is that Edmunds provides a valuable service with their True Market Value data. The accuracy of the True Market Value is exceptional considering how complex the marketplace truly is. One of the main reasons it’s so accurate has to do with the amount of data they are using to come up with their results.
As mentioned, they are getting data from nearly 25 percent of all of the dealerships located within the United States. This alone makes it so that they can analyze the data to come up with averages based on every local market. Because they have data from throughout the country, their numbers reflect the varying market conditions that can impact the total price of the vehicle .
How Do They Determine Your Vehicle’s True Market Value?
Numerous factors go into figuring out Edmunds TMV. Edmunds indicates they analyze millions of data points to determine the number . These data points include various factors including the total supply of that particular vehicle, the demand for the vehicle, the options included with it, and any incentives. A
long with this, it includes recent transactions that have occurred within the local marketplace. Because it doesn’t include either taxes or fees, it’s meant to be the transaction price for the vehicle.
Thus, you won’t have any rebates or fees factored into the number.
- Total Supply
- Total Demand
- Options Included
- Recent Transactions Nearby
How To Use Edmunds Suggested Price For New And Used Vehicles
One of the key things to keep in mind when you are using this data. For one, you should be using it as a data point yourself. The number isn’t meant to be the only factor you consider while you are car shopping whether new or used. Rather, it’s meant to be used as a data point in your research that you can base your comparisons on. This will get you somewhere in the ballpark of the price that you should be expecting to pay.
- Dealerships Use It
One of the things that you should keep in mind as a consumer is that dealerships use it when selling both new and used vehicles. They know the popularity of Edmunds TMV and it makes it easier for consumers to shop. Therefore, you’ll find them referencing it throughout negotiations. This means that you can expect it to be even more accurate.
RELATED READING: Is Edmunds a Good Place to Buy a Car?
- Popular Vehicles Will Have More Accurate Data
This one is just basic math. The more of a sample size you have, the more accurate the data will be. Because of this, you will get much more accurate and more reliable information if you are shopping for a popular vehicle. For instance, if you are shopping for a Honda Accord you are going to get much more accurate data than a Toyota Supra that hasn’t been in production for over a decade. Therefore, you need to factor in whether or not you are looking at cars that have a lot of data points or if you are looking for a much rarer vehicle.
- Don’t Use It Alone
As mentioned previously, this number isn’t meant to be used alone. While it will give you a good ballpark range to expect, it’s not something you should go with blindly. Rather, you want to call around and see what dealerships say about the value of the vehicle. This way, you can get even more data yourself that you can use to figure out how much it should be priced at.
- Don’t Assume It Includes Any Rebates or Fees
One of the mistakes that a lot of people make when they are using Edmunds TMV is that it is the final price of the vehicle. The fact is, it’s not going to include newer rebates, cash incentives from dealers, or taxes. Therefore, you don’t want to go into your negotiations for the final price of the vehicle thinking that the TMV is the final price you’ll end up paying. Always calculate the potential fees, rebates, or incentives separately.
- Use It To Save Time
One of the main reasons you should be using something like Edmunds TMV is to save time. The fact is, buying a new or used car is going to be stressful and time-consuming enough. The last thing you want to do is call around and accumulate all of the data yourself.
Getting the same amount of data that you can get with Edmunds TMV would take you years to do manually. It’s a great resource that you can use to save time not only with your research but also with your negotiations. After all, you won’t need to spend time starting extremely low with your offer.
You’ll have a good idea of what offers the dealers are accepting which can help you identify a good low price to come in at.
Summary: Can You Trust the True Market Value?
As you can see, the Edmunds True Market Value or Edmunds Suggested Price is a great resource that can be used successfully in your car buying process. It’s not meant to be the only thing used for valuations in your car buying process. However, it can be a crucial one that can save you time, energy, and money.
By having data points of local sales that have occurred nearby, you will know around where the market is pricing your vehicle. This can give you key information that you can leverage in your researching efforts. Keep in mind, the more popular the vehicle, the more accurate the information.
As long as you go into the process using it as a resource in your efforts and not the only resource, you’ll find that it is an invaluable one. You’re likely to hear all kinds of different numbers thrown around by dealers and car sellers.
By using the TMV, you can things in perspective and help you get a fair deal on your next vehicle purchase.