How Accurate Are Online Consumer-Based Used Car Appraisal Sites?

[Kief]

Last weekend we traded in our X5 for my wife's new X3 M40i.
I started the following Thread over in the G01 forum, but thought I would add it here as well and see what you guy's think:

Curious what others think about the accuracy of consumer-based used car appraisal sites, such as KBB or Edmunds, regarding dealer trade in?
As a rule of thumb, I always thought the ballpark figure for dealer trade in was the lowest number offered on these appraisal sites. So I was surprised to see what my local dealer is asking for my recently turned in 2015 X5 w/35k miles.

According to KBB and Edmunds, "Excellent/Outstanding" trade in condition were both at around $32-$34k. But my dealer is asking $45.9k, and it's not even certified!! When negotiating my trade in, and checking these sites, I thought I did very well that I scored $38k (and with the PA sales tax advantage, it actually resulted in a $40,280 trade in price). I even attempted to sell my X5 here privately and was asking $40k:
http://f15.bimmerpost.com/forums/sho....php?t=1437054
Even the X5 crowd thought $40k was a fair private party asking price.

So in the future, what's the Average Joe to use to gauge a fair trade in price, or for that matter, a fair private party asking price?!?

Full disclosure...my X5 also had a few options not taken into account with these online appraisal sites, such: Leather dashboard, MPE, and MPPK--but still, close to a $12k difference between the dealer's for sale price and what was considered "Excellent/Outstanding!"

Anyone have access to Manheim numbers? Curious what they are going for at auction.

[Kief]

I forgot to add a pic of the new X3. It has the 20" BMW 699M Winter setup on, as we ordered with the optional 21" 719Ms

[iconoclast]

kbb is far from accurate.

[Kief]

Originally Posted by iconoclast

kbb is far from accurate.

From your experience, does KBB under or overestimate?

[P1]

Many of my good friends work in the car business. You have to look at the totality of the deal. There are many pieces that make up the profitability.

I have access to Manheim and I'll be happy to use your VIN and pull what the auction would have paid for it.

[Kief]

Originally Posted by P1et

Many of my good friends work in the car business. You have to look at the totality of the deal. There are many pieces that make up the profitability.

I have access to Manheim and I'll be happy to use your VIN and pull what the auction would have paid for it.

Totally understand...just trying to figure out how to calculate a fair asking price when the time comes.

Thanks for checking Manheim. Pic contains the VIN

[yewlock]

Dealer usually will give you a thousand less than the lowest KBB or Edmunds trade in value

[P1]

Auction numbers came back with $38,300. You could have squeezed them for more on the trade in without a doubt.

[Sedoy]

Prices range from 36K-38K at northeast Manheim auctions for M-Sport.

[Kief]

Originally Posted by P1et

Auction numbers came back with $38,300. You could have squeezed them for more on the trade in without a doubt.

Originally Posted by Sedoy

Prices range from 36K-38K at northeast Manheim auctions for M-Sport.

DAMN THEM!!! But really not that bad! I could have probably gotten $500 more, maybe??

I did manage $500 over on the X3, before $6k in incentives....so I guess it all balances out.

My lesson for the day...get Manheim next time so I don't go in blind using KBB/Edmunds. I thought I was getting a killer deal at $38k when considering KBB/Edmunds numbers. It was like that old IKEA commercial where the lady scores a sale at the checkout:

[P1]

Originally Posted by Kief

DAMN THEM!!! But really not that bad! I could have probably gotten $500 more, maybe??

I did manage $500 over on the X3, before $6k in incentives....so I guess it all balances out.

My lesson for the day...get Manheim next time so I don't go in blind using KBB/Edmunds. I thought I was getting a killer deal at $38k when considering KBB/Edmunds numbers. It was like that old IKEA commercial where the lady scores a sale at the checkout:

It's a dirty tactic, but it's done: they find out what the car would go for at auction, then give you trade in value below that. Who do dealers do that? So in case the car doesn't sell on their lot (say, after 60 days), they don't run any risk of losing money on the car when it's sent off to auction.

But like you said, it seems you got a great deal on the X3 so it's probably all good.

[Kief]

Originally Posted by P1et

It's a dirty tactic, but it's done: they find out what the car would go for at auction, then give you trade in value below that. Who do dealers do that? So in case the car doesn't sell on their lot (say, after 60 days), they don't run any risk of losing money on the car when it's sent off to auction.

But like you said, it seems you got a great deal on the X3 so it's probably all good.

Actually, I don't find it to be a dirty tactic, but makes sense from a business perspective for the dealer. I was aware of Manheim before and knew dealers price accordingly for the exact reason you mention above. But what threw me off was KBB/Edmunds' numbers!! I thought I was getting a such a killer deal, I didn't even think to investigate Manheim

Thanks again for your help!

[Frank_NJ]

Originally Posted by Kief

Last weekend we traded in our X5 for my wife's new X3 M40i.
I started the following Thread over in the G01 forum, but thought I would add it here as well and see what you guy's think:

Curious what others think about the accuracy of consumer-based used car appraisal sites, such as KBB or Edmunds, regarding dealer trade in?
As a rule of thumb, I always thought the ballpark figure for dealer trade in was the lowest number offered on these appraisal sites. So I was surprised to see what my local dealer is asking for my recently turned in 2015 X5 w/35k miles.

According to KBB and Edmunds, "Excellent/Outstanding" trade in condition were both at around $32-$34k. But my dealer is asking $45.9k, and it's not even certified!! When negotiating my trade in, and checking these sites, I thought I did very well that I scored $38k (and with the PA sales tax advantage, it actually resulted in a $40,280 trade in price). I even attempted to sell my X5 here privately and was asking $40k:
http://f15.bimmerpost.com/forums/sho....php?t=1437054
Even the X5 crowd thought $40k was a fair private party asking price.

So in the future, what's the Average Joe to use to gauge a fair trade in price, or for that matter, a fair private party asking price?!?

Full disclosure...my X5 also had a few options not taken into account with these online appraisal sites, such: Leather dashboard, MPE, and MPPK--but still, close to a $12k difference between the dealer's for sale price and what was considered "Excellent/Outstanding!"

Anyone have access to Manheim numbers? Curious what they are going for at auction.

I will always use Galves as that is what the dealers use which is updated weekly based off auctions.

[iconoclast]

Originally Posted by Frank_NJ

I will always use Galves as that is what the dealers use which is updated weekly based off auctions.

Probably the most accurate and what most wholesale individuals go by... The comical thing about it all is that KBB is owned by Cox which also owns Autotrader, Dealer.com, Dealertrack, Manheim, NextGear Capital, vAuto, Xtime... They have the most accurate data available to them but each entity has very different numbers. MMR and vAuto together have the best information possible but you have to be an industry member to have access or know someone who is and is willing to share the information.

[Kief]

Originally Posted by Frank_NJ

I will always use Galves as that is what the dealers use which is updated weekly based off auctions.

Originally Posted by iconoclast

Probably the most accurate and what most wholesale individuals go by... The comical thing about it all is that KBB is owned by Cox which also owns Autotrader, Dealer.com, Dealertrack, Manheim, NextGear Capital, vAuto, Xtime... They have the most accurate data available to them but each entity has very different numbers. MMR and vAuto together have the best information possible but you have to be an industry member to have access or know someone who is and is willing to share the information.

Wish there was something more readily available for the Average Joe

[Mdog97]

I was a LOOONG time Edmunds.com fan, probably for most of the 2000s and early 201xs. I found their invoice price data to be incredibly useful, and their estimates of trade-in, retail and "TMV" I found to be quite on point for many of the cars I was selling / looking at / trading in.

However, starting as of 5-6 years ago (say 2011-12), I'd say that they "flipped" over to the dealer side, in terms of the prices they quote. My sense today is that the values they present, whether for trade in, private party retail or "TMV" on a used car, or TMV on a new car, are now materially skewed in favor of dealers (up for new cars, down for trade-in/used). This is similar to the situation with KBB, which has long been this way. My experience is mostly with BMW and Mercedes, but I had good luck with used pickup truck pricing in "the old days" as well.

I imagine that they earn effectively all of their income from dealers and manufacturers through advertising and referral fees, so I can't say I'm surprised. It's also a bit telling that their website is now geared much more heavily to show you used car inventory (near you or otherwise), rather than just give you the information you're seeking. Again, they have a business to run, so I can't say I'm surprised.

As the modern tech / online proverb goes, if you're not paying for the product, YOU (and your information) are the product....

Oh, and a note on auction prices: while yes they represent actual transactions and present a value "floor" for dealers to consider when transacting, there is a bit of noise in those figures, all else being equal, due to the fact that not all used vehicles go through the auction channel, and those that do are not a uniform cross section of the overall population. In particular, really good/clean cars (for higher-end marques like BMW and M-B) can and often do end up going straight back to the dealership floor, rather than through auction. Auction prices don't reflect higher sales prices for these cleaner cars. In addition, auction prices are further pulled down by the near 100% inclusion of the population of off-lease cars that can't be CPO'd due to reported collision history / derogatory carfax information. Again, a salient feature for higher-end marques.

/just my observations | YMMV | this offer not valid in ______

[iconoclast]

Originally Posted by Kief

Wish there was something more readily available for the Average Joe

within ten years or less the traditional dealer model will no longer exist and you will find places like carvana and their business model becoming more popular. amazon has been clamoring about entering the new car market along with others. audi plans to remove all sales people and create a "vehicle delivery specialist" instead, where you build a car online, the price is the price, you do the paperwork, then come in and sign then make an appointment to come back to pick up the vehicle with the delivery specialist and s/he will go over the vehicle and you drive off. none of this is concrete but the fact that they're discussing this for the past few years you can bet on some form of this model to make it's way into the real world soon.

Originally Posted by Mdog97

Oh, and a note on auction prices: while yes they represent actual transactions and present a value "floor" for dealers to consider when transacting, there is a bit of noise in those figures, all else being equal, due to the fact that not all used vehicles go through the auction channel, and those that do are not a uniform cross section of the overall population. In particular, really good/clean cars (for higher-end marques like BMW and M-B) can and often do end up going straight back to the dealership floor, rather than through auction. Auction prices don't reflect higher sales prices for these cleaner cars. In addition, auction prices are further pulled down by the near 100% inclusion of the population of off-lease cars that can't be CPO'd due to reported collision history / derogatory carfax information. Again, a salient feature for higher-end marques.

there are many reasons a vehicle goes to auction and not just because it's a POS... many high line dealers simply do not stock off-brand vehicles (meaning if it's a bmw dealer they may place an mb or audi into inventory and dump at auction or through a wholesale buyer at another dealership. also if a dealer in an area does not have a market for a particular vehicle or a vehicle is known to sit for longer than others a good GSM will dump it at auction to free up capital and not screw up their numbers and take up space on a lot with stale inventory or a dealer sometimes can make more money or quick money selling a car at auction rather than waiting months for the "right buyer". Corporate demos get dumped at auction as well and dealers buy them because they know they were hq cars with high msrp and optioned well and are less than 1yr old or 6k miles. JPM/Chase and others sometimes take their vehicles and dump at auction and they even have their own lanes in some of the bigger houses.

[3er]

I've had great experiences using NADA Guides for trade-ins. They're fairly accurate across the board.

[Jaymax85]

You got a great trade in at 38.. for reference I just bought a 2015 non cpo m sport with 75k sticker for 37

[P1]

Originally Posted by HELLOimJ

You got a great trade in at 38.. for reference I just bought a 2015 non cpo m sport with 75k sticker for 37

Sounds about right. There's quite a few '15 M Sports for sale in the $32K-$34K range with low miles. BMWs plummet in value so quickly, it's easy to pick up bargains when they start coming off lease.

[Kief]

Originally Posted by HELLOimJ

You got a great trade in at 38.. for reference I just bought a 2015 non cpo m sport with 75k sticker for 37

Thanks
That was quick! Didn't you just ask me last weekend if the new X3 would be large enough for 2 baby seats and an adult in the rear seats?

[Jaymax85]

Originally Posted by Kief

Thanks
That was quick! Didn't you just ask me last weekend if the new X3 would be large enough for 2 baby seats and an adult in the rear seats?

Yah I was waffling, ended up buying the x5 due to size this week. Plus the deal was too good to pass.