Navigating the car market, whether you’re buying or selling, can be complex. One term you’ll frequently encounter is Edmunds Car Value, also known as Edmunds True Market Value® (TMV®) or Edmunds Suggested Price. This guide, brought to you by the auto repair experts at obd2global.com, will break down what Edmunds Car Value is, how it’s determined, and most importantly, how you can use it to ensure you’re getting a fair deal.
What is Edmunds True Market Value?
Edmunds True Market Value® (TMV®) is essentially Edmunds’ estimate of the average price cars are currently selling for in your local area. Think of it as a benchmark for fair pricing. It reflects what other buyers are actually paying for both new and used vehicles. For those looking to trade in or sell their used cars, Edmunds TMV provides an estimated trade-in value, giving you a solid understanding of what you might expect from a dealership.
It’s crucial to understand that Edmunds arrives at these values by analyzing a vast amount of data, including real transaction data from dealerships across the country. Notably, CarMax, a large used car retailer, is one of the sources Edmunds uses for this data.
Since June 2021, Edmunds has been a subsidiary of CarMax, Inc. However, it’s important to note that while CarMax’s transaction data is incorporated into TMV® calculations, CarMax does not influence how Edmunds calculates these values. Edmunds maintains its independent approach to price analysis.
How to Utilize Edmunds Suggested Price in Car Negotiations
The Edmunds Suggested Price is more than just a number; it’s a powerful tool for car buyers and sellers. When you configure a new vehicle on Edmunds’ website or use their “build and price” tool, you’ll see the Edmunds Suggested Price alongside the invoice price (the dealer’s approximate cost) and the Manufacturer’s Suggested Retail Price (MSRP), also known as the sticker price. This suggested price also appears when you browse new car inventory listings.
Accuracy is key when using Edmunds Suggested Price. Ensuring you have the correct year, make, model, and options for the vehicle is vital. Incorrect details can lead to inaccurate valuations and potential misunderstandings at the dealership. Keep in mind that used car appraisals will have different valuation methods, which we’ll explore later.
Knowing the Edmunds Suggested Price provides a significant advantage. Car prices can vary widely based on demand and availability. This figure empowers you to make a reasonable offer that dealers will recognize as fair, leading to quicker, smoother, and more relaxed negotiations. You can access Edmunds Suggested Price on their app and mobile site, allowing you to check TMV pricing directly from the car lot.
Factors Determining Edmunds Car Value
For buyers aiming to purchase a vehicle, the Edmunds Suggested Price, or True Market Value, represents Edmunds’ recommended price before taxes and fees. It’s derived from a comprehensive analysis of millions of data points, considering factors like:
- Supply and Demand: Market dynamics significantly influence car prices.
- Incentives: Manufacturer and dealer incentives impact the final price.
- Options and Features: Vehicle options and trim levels affect valuation.
- Recent Transactions: Prices of comparable vehicles recently sold in your area.
Edmunds Suggested Price represents the average transaction price, not the out-the-door cost. This distinction is crucial. The TMV does not include incentives and fees typically applied after the transaction price is set, such as manufacturer-to-consumer rebates, sales tax, DMV fees, and dealer documentation fees. For a deeper understanding of these additional costs, Edmunds offers resources on new car fees.
Again, Edmunds gathers transaction data from various dealerships, including CarMax, to ensure the accuracy and comprehensiveness of their Suggested Price. Despite being under the CarMax umbrella, Edmunds’ TMV calculations remain independent, ensuring unbiased car value assessments.
Leveraging Edmunds Suggested Price for New Car Purchases
Understanding Edmunds Suggested Price is just the first step. Here’s how to effectively use it when buying a new car:
The Edmunds Suggested Price is most effective when used in conjunction with dealer price quotes or when you’re actively discussing pricing at the dealership.
If a dealer quotes you a price higher than the Edmunds Suggested Price, use the TMV as leverage in your counteroffer. For example, if the salesperson quotes $30,000, but Edmunds suggests $28,000, you can say: “My research indicates this car is selling for around $28,000 according to Edmunds. If you can match or beat that, we have a deal.”
For buyers who prefer a straightforward approach, offering to pay the Edmunds Suggested Price can be a fair and efficient starting point. Having a screenshot or printout of the TMV can reinforce your offer and demonstrate you’re informed.
However, it’s important to remember that Edmunds data, while generally reliable, is not infallible. There might be instances where data is limited, or rapid market changes aren’t fully reflected. In such cases, obtaining multiple price quotes from three different dealerships can provide a more accurate “real-world” TMV and give you a clearer picture of the current market price.
Edmunds Suggested Price and Car Leasing
While Edmunds doesn’t provide specific lease prices, the Suggested Price remains valuable for leasing negotiations. Lease payments are directly tied to the car’s selling price, known as the “cap cost” in leasing terms. A lower car price translates to lower monthly lease payments. Once you’ve determined the Edmunds Suggested Price for the car you want to lease, you can utilize Edmunds’ auto lease calculator, along with other lease terms, to estimate your monthly payments.
Appraising Used Car Value with Edmunds
Edmunds also offers a useful appraisal tool for determining used car values. This tool is essential when you’re planning to sell your car or trade it in. This valuation is known as the “trade-in value.” If you’re buying a used car from a dealer, you can also use the tool to find the “dealer retail” price. The “private party” price indicates what you might expect to pay when buying from an individual seller. As a seller, pricing your car slightly above the private party value allows room for negotiation.
When using the appraisal tool, accuracy in describing your car’s options and condition is crucial for obtaining a fair market price. Most used vehicles will fall into “clean” or “average” condition, with “outstanding” condition being less common.
Edmunds also provides market prices for certified pre-owned (CPO) cars. After entering the car’s details – make, model, year, options, mileage, and condition – CPO pricing information will be displayed at the bottom of the results page. Remember, these are average prices, and the final price is still negotiable.
Key Car Buying Price Points to Remember
During car shopping and negotiation, you’ll encounter various pricing terms like MSRP, sticker price, savings, and invoice price. Amidst this information overload, keeping the Edmunds Suggested Price in mind provides a crucial reference point. It’s the figure that helps contextualize all other pricing information and guides you towards a fair deal.
Frequently Asked Questions about Edmunds Car Value
What exactly is Edmunds True Market Value (TMV)?
Edmunds True Market Value® (TMV®), or Edmunds Suggested Price, is a system designed to help you understand the average transaction price – what others are paying – for new and used vehicles in your area. This knowledge empowers you to start negotiations with a realistic price in mind. For sellers, Edmunds TMV helps estimate the potential trade-in value of your vehicle.
These prices are calculated based on numerous factors, including actual sales data from dealerships. CarMax is among the dealerships contributing data to Edmunds’ analysis.
Despite being owned by CarMax since June 2021, Edmunds’ TMV calculations remain independent. CarMax’s influence is limited to providing transaction data, without impacting the methodology or results of Edmunds’ valuations.
Does Edmunds True Market Value include all fees and taxes?
Edmunds’ pricing system estimates the average transaction price of a vehicle, not the final “out-the-door” cost. Therefore, TMV prices do consider certain incentives and fees affecting the transaction price, including:
- Manufacturer-to-dealer incentives (dealer cash)
- Destination charges
- Advertising fees (if applicable)
However, Edmunds Suggested Prices do not include fees and incentives typically applied after the transaction price is determined:
- Manufacturer-to-consumer rebates (cash rebates)
- Sales tax
- License or registration fees
- Dealer title or documentation (“doc”) fees
Are there any vehicles Edmunds cannot appraise?
Unfortunately, Edmunds cannot provide appraisals for:
- Model years prior to 1990
- Exotic vehicles
- RVs, motor homes, commercial trucks, tractors, or trailers
- Motorcycles or ATVs
- Vehicles with salvage titles
- Demo vehicles
- Non-U.S. vehicles
- Customized vehicles or those with aftermarket accessories
These exclusions are due to data limitations and the complexity of valuing these vehicle types.
Does Edmunds Car Value account for regional market differences?
Yes, Edmunds Suggested Prices reflect varying market conditions for both new and used vehicle sales across the country. Factors like regional marketing fees are incorporated into the overall suggested price, even if not listed as separate line items.
Where does Edmunds get its transaction data?
Data is gathered weekly from the dealer management systems of 5,000 dealerships and dealer groups nationwide. Edmunds receives data from approximately 25% of all U.S. dealerships. CarMax is one of the contributing dealerships. Again, while CarMax provides data, it does not influence Edmunds’ valuation process beyond this data contribution.
How is dealership data securely obtained?
Edmunds uses a contracted vendor to extract only the data dealerships have authorized for sharing from their dealer management systems. This data is then securely transmitted electronically to Edmunds. The data sharing process is designed to protect dealership information while providing Edmunds with the necessary data for TMV calculations.
Why is transaction data essential for Edmunds Car Value?
Transaction data is crucial for establishing accurate Edmunds Suggested Prices and appraisal values. More data leads to higher accuracy in TMV® pricing. The goal is to determine the most common selling price in the market based on actual transactions. This benefits both dealers, who can expect fair profits, and consumers, who can expect fair deals without prolonged negotiations.
What elements are included in Edmunds Suggested Price calculations?
For new vehicles, the Edmunds Suggested Price calculation includes:
- National base price
- Destination charges
- Regional adjustments
- Color adjustments
- Optional equipment costs
- Applicable incentives
For used vehicles, Edmunds price appraisals also incorporate adjustments for vehicle condition and mileage.
What is the invoice price, and how does it relate to Edmunds Car Value?
Invoice price, sometimes called “dealer cost,” is the price listed on the invoice from the manufacturer to the dealer when the dealer receives a car. While knowing the invoice price is helpful, it’s not the sole determinant of a fair price. The true market price often falls between the MSRP and the invoice price. This is where Edmunds Suggested Price becomes valuable, as it reflects what consumers are actually paying and reveals a fair price point.
It’s important to note that the invoice price is typically higher than the dealer’s actual cost due to various manufacturer discounts not reflected on the invoice. Also, invoice price excludes manufacturer-to-consumer rebates, destination charges, and taxes/fees.
Where can I find invoice pricing on Edmunds?
To find invoice pricing on Edmunds:
- Use the search bar to find your desired Make/Model.
- On the overview page, click the “Build & price” link.
- Configure your vehicle. Invoice pricing will be shown in the results graph.
invoice
Does Edmunds TMV include taxes and fees?
No, Edmunds TMV does not include taxes or fees. These costs vary based on the buyer’s registration address, dealer documentation fees, and local and state taxes.
Does Edmunds provide pricing for vehicles with aftermarket modifications?
Edmunds does not provide pricing for vehicles modified with aftermarket parts. Aftermarket parts vary widely in cost and quality, making it unreliable to assess their added value. Modifications may also void the original vehicle warranty.
Customizations often reduce a vehicle’s trade-in value as dealers usually prefer to return vehicles to their original condition before resale. Selling modified vehicles privately or reverting them to stock condition and selling parts separately might yield better results.
Does True Market Value (TMV) include dealer-installed options?
True Market Value (TMV) pricing includes only factory-installed options. Dealer-installed options and accessories vary too much in cost and quality for reliable valuation. Edmunds pricing focuses on factory configurations for consistent and accurate car value assessments.
