How We Calculate New TMV® Prices

How We Calculate New TMV Prices

Edmunds.com True Market Value^® (TMV^®) price for new vehicles is our determination of their current average transaction price, i.e., "what others are paying." We were the world's first publisher of this kind of information about new vehicles, we strive every day to continue to publish the most reliable new vehicle transaction prices.

Edmunds.com's staff of statisticians, researchers, programmers and pricing experts have devoted years to developing and refining TMV^® pricing for new vehicles, and work continuously to refine and improve it. The TMV^® price takes into account, using a complex proprietary method, 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 also take into account any current manufacturer-to-dealer incentives for the vehicle (which results in a lower TMV^® price). The result is a highly customized value for the vehicle you are researching given the current conditions.

When an all new or redesigned model is introduced, we display its estimated TMV^® price, even though there may not have been any sales of that model. We do this because our visitors have expressly requested that we provide our "best estimate" of the transaction price as soon as the model is available for purchase. We update this TMV^® price as soon as we start receiving statistically significant transaction data.

When we need to make estimates for a new or redesigned model, we base our estimates on production and sales forecast, initial expected inventory levels, pre-orders, relative current (and expected short-term) category strength, historical pricing behavior of the previous generation of the model (when it is a redesign), dealer feedback about the expected initial market price, and reviews/buzz for the model.

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.