How We Calculate New TMV® Prices

How We Calculate New TMV Prices

Edmunds.com's staff of statisticians, researchers, programmers and pricing managers spent almost a year in the initial development of TMV pricing for new vehicles and work continuously to refine and improve it. The TMV price takes into account a number of factors, including the vehicle's invoice price, its manufacturer's suggested retail price, the current supply and demand for the vehicle, the vehicle's relative brand strength and actual transaction price data. We then utilize a complex proprietary formula that combines these factors. We also take into account any current manufacturer-to-dealer incentives for the vehicle, which will result in a lower TMV.

The result is a highly customized value for the vehicle you are researching given the current conditions in your local market. It is a complex, labor-intensive process, but we think it's worth the trouble; it allows us to publish the industry's best pricing, and the first and only new vehicle market transaction pricing available to consumers.

During the annual new model year changeover, we report TMV prices for new vehicles within a few weeks of launch, despite the fact that we may have significantly less retail transaction data to work with than at other times of the model year. This is in response to consumer feedback requesting that we estimate the TMV for these new models as quickly as possible. As we collect additional market data, we refine the TMV prices to reflect the actual marketplace. TMV has become such a valuable pricing research tool for our customers that we don't want to leave you "blind" during the new model transition.

Many vehicle invoices include a legitimate advertising fee levied by either the manufacturer or regional dealer groups. Ad fees can range from less than 1% of the vehicle's MSRP to more than 3%, depending on region. Metropolitan-area dealers are more likely to charge higher advertising fees than rural dealers. Whenever there is an advertising fee, we take it into account when calculating TMV.

However, please note that the TMV prices do not take into account the following items:

• Manufacturer-to-consumer rebates - these are different from manufacturer-to-dealer incentives and don't affect the actual transaction price; the consumer usually has the choice either to apply these funds against the sales price as a down payment (lowering the amount to be financed) or to accept a check from the dealer for this amount.
• Tax or Title
• License/Registration Fees

Definition of Terms

• Regional Base Price The regional price shown is the value for a specified vehicle trim level with standard equipment, for the state identified by your Zip Code.
• MSRP The Manufacturer's Suggested Retail Price. This is a recommended retail price as suggested by the manufacturer and posted on the vehicle's window sticker. However, dealers are free to sell the vehicle for any price they choose.
• Invoice The price that a manufacturer charges its franchised dealers. Please note that the invoice price is often not the net price paid by the dealer to the manufacturer; click here to read about dealer holdbacks.