How We Calculate Used TMV® Prices

How We Calculate Used TMV Prices

Edmunds.com's staff of statisticians, researchers, programmers, and pricing managers spent over a year developing TMV pricing for used vehicles and work continuously to refine and improve it. The process begins with raw transaction data: millions of records of actual used car sales for thousands of makes, models and styles, in all regions of the country and in all colors, updated on a regular basis. This data is sorted, cleaned, analyzed, and processed, and becomes the basis of TMV used vehicle pricing.

Second, our staff developed a complex and proprietary set of rules that permit us to determine, based on this underlying database, the following TMV prices for the vehicle you specify: dealer trade-in (the estimated average price consumers are getting from dealers for their trade-ins), dealer retail (the estimated average price consumers are currently paying dealers for used vehicles), and private party (the estimated average price consumers are paying each other in private party transactions). These rules take into account such factors as the vehicle's original price when new, its estimated depreciation rate, the color of the vehicle, which of five regions of the country the vehicle is located in, and the vehicle's mileage, condition, and options.

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, pricing that represents actual market transactions as opposed to the much less meaningful suggested offering prices that other companies publish.

Please note that we are now providing TMV values for models dating back to 1990. In an effort to meet our consumer's demands for older vehicle values, we apply our proprietary algorithms coupled with the known vehicle depreciation curves to estimate these TMV values. TMV has become such a valuable decision support mechanism for our customers that we don't want to leave you "blind" with respect to these "more experienced" vehicles.

Please also note that the Edmunds.com TMV base used vehicle price does not take into account tax, title or license/registration fees.

Definition of Terms

Used TMV Pricing Definitions

• Base Prices The TMV base prices are the values for a base vehicle with standard equipment for the specified vehicle trim level, and assumes a vehicle in "clean" condition. These prices do not include any vehicle-specific pricing adjustments. (See "Used TMV Pricing Adjustments" below.)
• Trade-in This is our estimate of what others are receiving from dealers when they trade-in a vehicle. For advice on how to better approach the trade-in process we recommend reading our article Trading In Your Used Car.
• Private Party This is our estimate of how much buyers are willing to pay a private seller for similar vehicles in your region — and thus how much you could expect to receive if you sell your vehicle yourself.
• Dealer Retail This is our estimate of what customers are paying dealers for similar vehicles in your area. This value will be higher than the Private Party price due, in part, to the inspection, reconditioning and other costs a dealer must incur before selling the vehicle.

Used TMV Pricing Adjustments

• Certified Used Vehicle A certified used vehicle sells at a premium, as compared to the normal dealer retail price, since the dealer has added value to the vehicle in accordance with the manufacturer's official guidelines. This includes a detailed inspection, reconditioning to a specific standard and the addition of a certified warranty. The certified used vehicle price is applicable only if the dealer can document that the vehicle has passed the manufacturer's certification guidelines.
• Color Adjustment Edmunds' TMV prices account for color as a driver of value. However, the same color vehicle may sell for different prices depending on a number of market factors. (For example, black cars sell at a discount in the Sunbelt.) The Edmunds.com TMV Used Vehicle Appraiser takes many of these other factors into consideration when applying the color adjustment.
• Condition Adjustment The five condition classifications — Outstanding, Clean, Average, Rough, and Damaged — affect the value of the vehicle. These classifications generally refer to the way the vehicle had been maintained.
• Mileage Adjustment A vehicle's mileage suggests the amount of wear and tear the vehicle has experienced. The TMV Used Vehicle Appraiser adds or deducts the appropriate amount if the vehicle's mileage is below or above the normal range for a vehicle of that age.
• Optional Equipment Optional equipment adds value to a vehicle. Edmunds.com's TMV Used Vehicle Appraiser provides a customized adjustment for the optional equipment you specify (unlike the one-size-fits-all approach used by some of our competitors).
• Regional Adjustment Vehicles sell for different prices in different parts of the country, and prices experience seasonal fluctuations. This adjustment is required to account for regional and seasonal pricing variations.