Determining the right price for a car, whether you’re buying or selling, can be a complex task. It’s crucial to have the best tools at your disposal to ensure you’re getting a fair deal. Edmunds True Market Value® (TMV®), also known as Edmunds Suggested Price, stands out as a valuable resource in this process, providing an estimated average transaction price for vehicles in your area. This guide will explore how Edmunds TMV works and how to effectively use it as one of your primary tools for determining the best car price.
Understanding Edmunds True Market Value (TMV®)
Edmunds True Market Value®, or Edmunds Suggested Price, is essentially Edmunds’ expert estimate of the average price cars are currently selling for. This isn’t just a sticker price or an arbitrary number; it’s calculated based on real-world transaction data. For those looking to trade in or sell a used vehicle, Edmunds TMV offers a trade-in value estimate, helping you understand what you might realistically expect from a dealership.
Edmunds gathers data from numerous sources, including actual sales data from dealerships nationwide. CarMax, a large auto retailer, is one of the significant contributors of this transaction data. It’s worth noting that while Edmunds is a subsidiary of CarMax, the TMV calculations remain independent. CarMax’s involvement is limited to providing data, ensuring the integrity and unbiased nature of the Edmunds Suggested Price.
Edmunds Invoice Pricing Example
How to Utilize Edmunds Suggested Price Effectively
When you’re exploring vehicles on Edmunds, particularly using the “build and price” tool, you’ll encounter the Edmunds Suggested Price alongside other key figures like the invoice price (dealer’s cost) and the Manufacturer’s Suggested Retail Price (MSRP), or sticker price. This suggested price is also visible when you browse new car inventories.
Accuracy is paramount when using Edmunds Suggested Price. Ensuring you’ve correctly specified the year, make, model, and options is vital. Incorrect details can lead to inaccurate price estimations, causing potential misunderstandings during negotiations at a dealership.
For used car appraisals, the figures will differ, reflecting the depreciation and market dynamics of used vehicles. We’ll delve into used car appraisals later in this guide.
The Edmunds Suggested Price is a powerful tool for car shoppers because vehicle prices fluctuate significantly based on factors like availability and demand. Having this figure empowers you to initiate negotiations with a price point that dealers recognize as reasonable. This knowledge streamlines the negotiation process, making it quicker and more comfortable. The Edmunds app and mobile site further enhance accessibility, allowing you to verify TMV pricing directly from a car lot.
Factors Influencing Edmunds Suggested Price
For prospective car buyers, the Edmunds Suggested Price serves as a recommended target price before taxes and fees. It’s derived from a comprehensive analysis of millions of data points. These encompass supply and demand dynamics, manufacturer incentives, vehicle options, and data from recent car transactions in your vicinity. It’s important to understand that the Edmunds Suggested Price represents an average transaction price, not the final “out-the-door” cost.
This distinction means that while TMV considers factors influencing the transaction price like manufacturer-to-dealer incentives, destination charges, and applicable advertising fees, it typically excludes incentives and fees applied after the price is set. These excluded items include manufacturer-to-consumer rebates, sales tax, DMV fees, and dealer documentation fees. For a deeper understanding of potential additional costs, resources detailing new car fees are readily available.
Edmunds’ methodology for determining the Suggested Price relies heavily on real transaction data obtained from dealerships. As previously mentioned, CarMax is a contributing dealer, but their influence is limited to data provision, ensuring the integrity of Edmunds’ price calculations.
Applying Edmunds Suggested Price in New Car Negotiations
Knowing what Edmunds Suggested Price is and where to find it is just the first step. Here’s how to leverage it to secure a better deal when buying a new car.
The Edmunds Suggested Price becomes especially potent when used in conjunction with dealer price quotes or when you’re at the dealership exploring a vehicle of interest.
If a dealer’s initial price exceeds the Edmunds Suggested Price, don’t hesitate to bring up the TMV figure when countering their offer. For instance, if a salesperson quotes $30,000, but the Edmunds Suggested Price is $28,000, you can confidently state, “I’ve researched this car’s market value, and Edmunds suggests it’s selling around $28,000. 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 effective. Having a screenshot or printout of the TMV readily available reinforces your position and demonstrates you’re well-informed.
While Edmunds data is robust, it’s not infallible. In instances where data is limited or market trends are rapidly shifting, the Suggested Price might not perfectly reflect real-time conditions. In such cases, gathering “real-world” TMV insights is advisable. Contacting multiple dealerships (three is a good benchmark) for price quotes provides a broader view of the vehicle’s actual selling price in the current market.
Edmunds Suggested Price and Car Leasing
Even if you’re considering leasing rather than buying, the Edmunds Suggested Price remains a valuable tool. Although Edmunds doesn’t provide specific lease prices, the car’s selling price, termed “cap cost” in leasing, directly influences your monthly lease payments. A lower vehicle cost translates to lower monthly payments.
Once you’ve established the market value of the new car using Edmunds Suggested Price, you can input this figure into Edmunds’ auto lease calculator. Combined with other lease terms and vehicle details, this will generate an estimated lease payment, empowering you to negotiate lease terms effectively.
Used Car Appraisal and Pricing Tools
Edmunds extends its pricing expertise to the used car market with a practical appraisal tool. Understanding your used car’s value is crucial when selling, trading it in, or even buying used. For sellers and trade-ins, this is known as the “trade-in value.” For used car buyers from dealerships, the tool provides a “dealer retail” price. A “private party” price is also provided, representing the expected price in a private sale. If selling privately, pricing slightly above the private party value allows room for negotiation.
When using the appraisal tool, accuracy in representing the used car’s options and condition is essential. Most used vehicles fall into “clean” or “average” condition categories. “Outstanding” condition is rarely applicable.
Edmunds also provides market prices for certified pre-owned (CPO) cars. After inputting the car’s specifics—make, model, year, options, mileage, and condition—CPO pricing information appears at the bottom of the results page. Remember, these are average prices, and negotiation is still expected.
Key Car Buying Price Points to Remember
Navigating car pricing involves various terms—MSRP, sticker price, savings, invoice. Amidst this terminology, keeping the Edmunds Suggested Price in mind provides a crucial benchmark. It’s the figure that offers perspective and helps you gauge whether you’re getting a fair price in the negotiation process.
Frequently Asked Questions about Edmunds True Market Value®
What exactly is Edmunds True Market Value® (TMV®)?
Edmunds True Market Value® (TMV®), also known as Edmunds Suggested Price, is a system designed to help you determine the average transaction price—what other buyers are paying—for new and used vehicles in your area. This empowers you to begin negotiations with a realistic and fair price in mind. For sellers, Edmunds TMV helps estimate the potential trade-in or sale value of your vehicle.
These prices are derived from a range of factors, including extensive transaction data obtained from dealerships. CarMax contributes to this data pool, although Edmunds’ pricing calculations remain independent.
Does Edmunds True Market Value® include all incentives and fees?
Edmunds’ pricing system estimates the average transaction price, not the final “out-the-door” cost. Therefore, TMV prices do consider certain incentives and fees that influence the transaction price, such as:
- Manufacturer-to-dealer incentives (dealer cash)
- Destination charges
- Applicable advertising fees
However, Edmunds Suggested Prices typically do not include incentives and fees usually applied after a transaction price is agreed upon:
- Manufacturer-to-consumer rebates (cash rebates)
- Sales tax
- License or registration fees
- Dealer documentation (“doc”) fees
Are there any vehicle types Edmunds cannot provide appraisals for?
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
Does Edmunds Suggested Price account for regional market variations?
Yes, Edmunds Suggested Prices reflect varying market conditions for both new and used vehicles across the country. These variations can include regional marketing fees, which, while not explicitly itemized, are factored into the overall suggested price when applicable.
Where does Edmunds get its transaction data?
Data is updated weekly from the dealer management systems of approximately 5,000 dealerships and dealer groups nationwide. Edmunds receives data from roughly 25% of all U.S. dealerships, ensuring a broad and representative dataset.
How is dealer data handled to ensure privacy and security?
Edmunds employs a contracted vendor to extract only the specific data dealerships have authorized for sharing from their dealer management systems. This data is then securely transmitted electronically to Edmunds, protecting sensitive information while providing necessary pricing inputs.
Why is transaction data important for Edmunds pricing?
Transaction data is crucial for establishing accurate Edmunds Suggested Prices and appraisal values. A larger volume of transaction data directly translates to greater accuracy in TMV® pricing.
The ultimate goal is to determine the most common price paid in the market based on actual transactions. This enables dealers to expect fair profits and consumers to secure fair deals, minimizing lengthy and stressful negotiations.
What specific elements are included in the Edmunds Suggested Price?
For new vehicles, the Edmunds Suggested Price incorporates the national base price, destination charges, regional adjustments, color adjustments, optional equipment costs, and any relevant incentives to arrive at a final suggested price. For used vehicles, Edmunds appraisals also factor in condition and mileage adjustments.
What is invoice price and how does it relate to Edmunds Suggested Price?
Invoice price (or “dealer cost”) is the price listed on the invoice from the manufacturer to the dealer when a car is delivered.
While knowing the invoice price is useful, it’s not the sole determinant of a good deal. The actual transaction price often falls between the MSRP and invoice price. This is where Edmunds Suggested Price becomes valuable, reflecting what other consumers are actually paying and revealing a fair market price.
It’s important to note that the invoice price is often higher than the dealer’s final cost due to various manufacturer discounts not visible on the invoice. Also, invoice price doesn’t include manufacturer-to-consumer rebates, destination charges, or taxes and fees.
How accurate are invoice prices on Edmunds?
Invoice prices on Edmunds are derived from manufacturer documents known as “dealer order guides.” However, individual dealers might add fees like advertising charges.
When comparing invoice prices, ensure vehicle styles and options are identical. For example, a Honda CR-V EX FWD will have a different invoice price than an AWD version. Regional pricing differences can also cause discrepancies, especially with brands like Toyota in the South/Southeast and Subaru in the Northeast, where independent distributors influence pricing.
How can I find invoice pricing on Edmunds’ website?
To find invoice pricing:
- Search for the vehicle Make/Model on Edmunds.
- On the overview page, find and click the “Build & price” link.
- Configure the vehicle; invoice pricing will be displayed in the results graph.
Does Edmunds TMV include taxes and fees in the suggested price?
No, Edmunds TMV does not include taxes or fees. These vary based on buyer location, dealership documentation fees, and local taxes.
Why doesn’t Edmunds provide pricing for vehicles with aftermarket parts?
Edmunds does not price vehicles modified with aftermarket parts due to the wide variability in cost and quality of these parts. There’s no reliable way to assess their added value to a vehicle. Modifications may also void warranties. Customizations often reduce trade-in value as dealers typically restore vehicles to stock condition before resale. Selling modified vehicles privately or reverting to stock condition for separate sales of parts may be more effective.
Does True Market Value (TMV) pricing include dealer-installed options?
True Market Value (TMV) pricing only includes factory-installed options. Dealer-installed options and accessories vary too much in cost and quality to be reliably valued.
