06-28-2009, 11:07 AM | #1 |
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Burn the NADA books!!
If you are like our dealerships the NADA values determine several things such as; How much the banks will finance? The customer looks to the values to base how much they will pay for vehicles! Now ask yourself are the values in these books even close to representing how high the used values on cars are at auction! I can answer absolutely No! Do they keep in mind how much cost there is at dealership level to sell a car again it is a No! So how do they come up with the values? Looking inside the books it sounds good but I do not see any transperency for NADA to be judge on. There values are suppose to be fair to both Dealers and Consumers! If your grosses are real low we can thank NADA for there lack of response to current market conditions.
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06-28-2009, 05:43 PM | #2 |
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Watching the Black Book (auction prices) and seeing what we have to pay to purchase a vehicle at auction, I was MILDLY suprised when I got the July NADA book and values decreased.....Perhaps my GSM is right, maybe the banks control the book, it certainly isn't controlled by any part of reality
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06-28-2009, 07:42 PM | #3 |
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Does anyone know how these valuation methods were created? I thought Blue Book and KBB were supposed to reflect average auction values by region, but that never seems to be the case, for me at least.
Who was the first to say, "Hey, we need something where customers will develop an overinflated image of their trade in? I know..." |
06-28-2009, 08:05 PM | #4 |
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When ever I attended Manheim auctions I saw a rep from Black Book at them weekly. One time I even asked him, "What do you do?" He gave me a look and said "I take values and we avg. them from several sources and produce that book your holding." I asked him why it took 2-3 months for them to catch up (but haven't come close to current times) if you are here weekly" He said "I gotta go!" (I think he was headed for the chicken wings they were putting on the drive for buyers.)
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06-29-2009, 10:20 AM | #5 |
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pma7129514 - First post - Welcome to the forum.
I think the days of the "books" are numbered. The data is so old and unreliable that they no longer provide value to any of the users. I've already read posts on this forum from members who use their iPhone at the auction to check Manheim Reports before making a purchase - that's the way of the future in my opinion. Concerning the banks controlling the books, that's an interesting thought. I always used to wonder about residuals and the ALG guide. |
06-29-2009, 11:12 AM | #6 | |
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Quote:
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06-29-2009, 02:38 PM | #7 |
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The NADA book values have never been very accurate because the NADA values are actually 60 to 90 days behind whatever the current market is due to the method of data gathering and the fact that it only reflects the price of vehicles that have already been sold. It makes no adjustemnt for those that may have been in inventory for 6 months and are still sitting on the lot without being sold, which will probably wind up selling at a discounted price. The way it used to work, was each dealer sent a form each month showing what he had ACTUALLY sold that month and the price he had paid for it. That info was sent in to NADA at the END of each month, so it was already up to 30 days old, and then it took another 30 days for them to collate and process it to be used in the NEXT months book...so it was always 60 to 90 days behind current market. So, unless prices are staying flat, it will always be lower or higher than the current market. You'd think that with current technology, the processing of the raw data could be done MUCH faster.
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06-29-2009, 07:41 PM | #8 |
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I always found auction sales reports directly from the auction to be much more accurate. I wonder why they are not in wider use, especially with banks?
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06-30-2009, 07:49 AM | #9 |
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I would like to know where these people are getting banks to buy cars I was just trying to buy on line in Hatfield and the CARS are doing $2000.00 over NADA JULY Retail
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06-30-2009, 07:50 AM | #10 |
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WHAT am I missing?
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06-30-2009, 09:20 AM | #11 |
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Here is the letter that the dealer sent to the editor at NADA He did not get a response maybe with some other dealers turning up the heat on where, why and how NADA get the current vehicle values, maybe we can have a logical debate on why NADA is so far off on those values! Send a note to the NADA editor as well as ask Automotive News to pursue the lack of transperency that NADA has on there vehicle values!
To: editor@nada.com Sent: Thu, Jun 25, 2009 3:24 pm Subject: NADA VALUES HELP THE AUTO DEALERS OUT AND GET YOUR VALUES WHAT THEY ARE BRINGING AT AUCTIONS. I have been in the car business since 1982 and have never seen such a difference between NADA values and what the real money is on used cars. Its killing the dealers. Banks are using your values for what they will loan,Customers are using your values for what they want to pay, and were trying to make a modest profit to keep everybody employed. I go physically to 8 auctions a month, i buy online through 4 different platforms and I can't get close to buying a decent vehicle for clean trade in. Then i still have to transport it, recondition it and put a warranty on it. Oyea got to pay a buy fee also. How do you get these Values and what auctions do they come from. I appreciate your time. |
06-30-2009, 10:07 AM | #12 |
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pma7129514 - great post
It would be interesting to put some pressure on NADA and have them explain why their guides are so far off. While I still believe that the days of the "books" are limited, there's no question that they're still widely in use and their inaccuracy is making the dealer's job harder. |
06-30-2009, 10:09 AM | #13 | |
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In fact, I'm surprised that someone like CARFAX hasn't developed a VIN based program that values a used car based on equipment and recent auction prices. |
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06-30-2009, 02:51 PM | #14 |
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We subscribe to BlackBook & NADA both online. NADA online still only updates once a month & BlackBook updates weekly. Neither is close to a true value. Nice desirable units are 2k + out of the book w/ BlackBook. I don’t know where NADA gets their values but they need to get in the real world.
You would think NADA would use DMV reports for retail value since the selling price has to be disclosed for sales tax. BlackBook is supposed to be based on the auctions but it sure runs behind. I think NADA has become a cakewalk for a good old boys club in recent years. After what just happened to Chrysler franchises & what is current taking place w/ GM franchises I think these guys fell far short of representing dealers. |
06-30-2009, 02:54 PM | #15 |
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I'd agree with you there 100%. When dues come up next year it will require some serious thought as to whether the membership is worth it.
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