QUESTION:

How come that TMV by Edmunds.com is SOOOOO different from NADA and Kelly Blue Book?

  I am now contemplating to sell my Subaru Outback (1997, 144,000 mi, manual transmission, 6-CD changer and AM/FM, ABS, has overhauled top end, fairly new clutch and tires, runs great, needs a cosmetic repair on bumper and has a few dings and scratches but no major issues of any kind).  I was looking in Edmunds and found the private party price to be $1,781 (avg condition) and $ $2,593 (clean condition) - both prices take mileage and options into account.  So, let's say we call it clean condition and its around $2,600. (for clear condition Retail is listed as $3,652).

  Then I go to Kelly Blue Book and I find private party values for my car, incl. mileage etc: $5,605 for good condition, $4,880 for fair condition.  I think the car is probably in better than fair condition and perhaps slightly below the "good condition" due the bumper (which I could fix if it was worth it).   Either way, KBB puts the price 2.3k - 3.0k higher! Wow! What gives?

  Then NADA: low retail is $3,475, clean retail is $4,575 and high retail is $5,475. (these are adjusted also for the mileage)

  So, Edmunds is way low, Kelly Blue Book about double (!) and NADA is a little lower than KBB.

  Then I went to autotrader (all while having my New Year's cup of tea... :-)))
  Found only one privarte party vehicle within 100 mi from here: '96, i.e., one year older, slightly lower mileage (128K), automoatic -> $2800, says price is negotiable
  Found a dealer offering a car with basically same mileage as mine (146k), 1 year older ('96), automatic, new brakes and rotors (mine has a fairly new top-end, clutch, tires, good brakes, too) for 4.5k.

  Sooooo, my question to my favorite car expert is: Why are there such HUGE differences between price estimates offered by Edmunds, KBB and NADA? And which price could I expect to get for my car in your opinion if I sold it as private party?

-S.A.

ANSWER:

Awesome research! Exactly what you should do to determine pricing! Want a job?

Each of these groups claim to base their pricing on various formulas that utilize actual selling prices for the region and the country. So, obviously, someone's numbers ain't quite working...  I think these figures are of limited real-world value. Pricing strategy generally depends on the same thing all car deals depend on...the applied leverage of time. If you have time to wait, you will get the best price.

  Generally, TMV is most useful when trying to analyze the value of certain upgrade packages on late-model vehicles. Blue Book is useful because it is what people THINK things are worth, AND it is where certain lenders establish their Loan-to-Value percentages, which often impact which interest rates and terms are available. NADA is the most accurate actual reflection of pricing, I think, in general, but there is nothing more effective than an independent analysis of actual asking prices.  I always use a nationwide search for model/year/mileage on Autotrader to set my initial target range. there are 147 1997 Subaru Outbacks for sale at this time in the country. The average asking price is around $5200.  Of course, this includes many obvious aberrations like the dealer asking $9500 for over 200k miles, but generally, these rarities iron out with such a large pool.

  With an Outback, there are additional considerations: The overall quality of Subaru and the rather unique nature of the Outback (many shoppers will remember fondly these vehicles, while quickly forgetting other vehicles they have owned).

  AS for mileage, there are increments that press hot-buttons for people: under 100000, under 120000, under 150000, etc. The model year that far back is not quite as important, give or take. Search for Outback's between 1996 and 1998 with between 120 and 150k for miles. Two other factors: the relative unpopularity of manual transmission and the apparent existence of cosmetic issues that must be explained to potential buyers. If the obvious visual shortcomings can be addressed economically, it is worth considering. A CD changer is a nice upgrade.

  Selling price is ALWAYS a time-driven issue. Ask yourself 1) How soon do you need the money? 2) Do you NEED the money? 3) Is it parked in an expensive/inconvenient location? 4) Can you wait three months to sell it?

  I will be happy to send you a pricing report, but I bet you can peg these numbers pretty accurately. Ask $750 more than you want, and always be aware of the only important question, the one that I cannot get people to tell the real truth about. This is the biggest challenge I have, by far:

  My Q:  What will you sell it for TODAY, right now?
  A: Well, I want to get $12000 for it.
  Q: Yeah, but what WILL you sell it for?
  A: Um...maybe $11,500...
  Q: So-we should advertise it at $12250 or so...
  A: Okay.
  Q: Hey, I've got $9000 in cash here. Will you take it?
  A: Hmmm...okay!
  Q: sigh..... 

-P.W.R.

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The answers provided here are not intended as legal advice, they are simply the opinion of Peter W. Robinson based on years of experience and research.

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