The real story on car prices

I have been buying and selling cars for over 30 years. The pricing of cars still amazes me. Most of the used cars on new and used car dealerships are either taken in trade or purchased. Most of the ones that are purchased come from auctions. I am sure most people know what an auction is. the high bidder gets the item on the block. As the car comes into the auction arena there is a line of 5 to 6 cars waiting to be sold. You will get to walk around the car look at the exterior and interior, listen for funny noises. Look at the instrument panel to see the mileage and if any warning lights are on. Check under the hood for oil leaks, smoke, etc. In other words you have just a few minutes to judge the car and its value. If the car is nice there will be many bidders on the car. When I end up buying a car, I know that I have paid more than anyone else in order to have the car on my lot for resale. The value of two 03 Chevy Impalas with 60,000 miles can be $1500 or more different depending on condition and mileage.

We use the Kelly Blue Book as a guide to what the car is worth. This gives a wholesale and retail value, adds for different equipment additions and deductions depending on mileage. This is an online service that is subscription based. There are other books and guides. Kelly also offers guides designed for the retail buyer. NADA is one of the more popular ones. Each region of the country has one that is more popular than the others. Then there are sites like Edmunds .com that also give values. I wonder where these places get the values they use. One of my customers e-mailed me a quote on a truck I have available for sale. The dealer retail figure listed there is less than the wholesale value in the Kelley book. I know each of these guides get there numbers from different places.

All I know from experience is that a car is worth what a buyer is willing to and a seller is willing to accept without force. I also know that you cannot sell from an empty shelf. In order to have nice cars you have to be willing to pay the cost to get them.