What's It Worth?
I went to visit a friend of mine one Saturday afternoon and found him cleaning out his garage. In the corner was a piano with a bunch of boxes stacked on it. I was looking to buy a used piano for my son, so I asked my buddy what he wanted for the piano.
"Tell you what," he said, "help me sell my MG, and I'll give you the piano for nothing."
He pointed back into the darkened corner of the garage and, appearing out of the gloom, I saw a 1970 MGB. It was covered with such a thick layer of dust I couldn't even tell what color it was. He explained that he had driven it into the garage in 1991 and never drove it out again.
I agreed to help him sell the car. Why not? I like a challenge. But I still had to ask the key question, "What do you think it's worth?"
"I have no idea," he said. "What do you think it's worth?" The weird thing about cars is that they're worth whatever someone's willing to pay for them. Put the emphasis on one in someone because it only takes one person with money to make a deal.
Eventually, we listed the MGB on TraderOnLine.com and priced it, somewhat arbitrarily, at $1,600. It wasn't even running. The tires were flat. The upholstery was a mess.
Right away, we start getting calls from all over the world. Some guy even called from Australia. He sounded like Crocodile Dundee. My friend told prospective buyers that the first guy who got there with the dough could take the car. Next day, someone from the Netherlands showed up with cash and a trailer. They had it on a boat that night.
Based on the fast response we got, I realized we should have tried to sell it for a lot more.
A couple of months later, it was time to turn in the leased 1999 Honda Odyssey minivan from the Edmunds.com long-term test program. I called the bank that had leased it to us and found that we could buy it for $16,900. I knew that Hondas -- and Odysseys in particular -- hold their value. I thought we might make money on the transaction by selling it ourselves, paying off the bank and pocketing the difference.
I mentioned all this to my editor here, and he said, "So what do you think it's worth?"
What's it worth? There's that question again. With the 1970 MGB we didn't have a frame of reference, since it was an old car. But this time, I was ready. With the 1999 Odyssey, we could use Edmunds.com's True Market Value® pricing system.
I went to the Used Car Pages and priced the Odyssey using the TMV® Used Car appraiser. I put in the 41,500 miles and all the options. It said we should charge $22,300 for the van. We decided we should try to stand firm on the TMV price.
But then a couple of funny things happened. First, another editor here reminded me that we bought a cassette tape deck for the Odyssey and that the dealer charged almost six hundred bucks for it. So I raised the price to $22,600 to give us a little wiggle room. Then, just when the Internet ad ran, the TMV price was dropped to $22,019.
A couple of days went by, and I hadn't gotten any calls. I was beginning to think that I'd have to drop the price or advertise in the newspaper classifieds.
Then the phone rang.
The caller said he was interested in looking at the van. He came over, test-drove it and offered $22,000 even.
I went into my office and ran into my good friend Neil Chirico, our road test coordinator, and someone who knows everything about cars. Neil asked, "Is he going to buy it or not?"
"Well, he just offered twenty-two even for it," Neil's eyes got big and he said, "You took it, didn't you?"
Well, I was thinking about the three-hundred-dollar cassette player. But maybe that charge was a little bogus. And then I started thinking about how we listed it for $22,600 and we were going to stand firm on that price. But then I remembered that TMV had been dropped to $22,019. So I realized we were only $19 apart.
I went back and accepted the offer.
Later, I thought how strange it was that we got only one call on the Honda but we sold it right at TMV. Then it hit me: TMV was right on the nose. If we had asked less for it, we would have gotten a ton of calls and sold it right off -- just like what happened with the MGB. If we asked more, we might not have gotten any calls at all.
So, it was nice to prove -- in real market conditions -- that TMV was accurate. We sold the Odyssey and made some money. My buddy cleaned out his garage. Plus, some guy in the Netherlands is stylin' in his MGB.
Oh yeah. And I got a piano for free. Did I mention that? My son plays it all the time. He's getting pretty good.