The pre owned Mercedes Benz market in Minneapolis, just like the rest of the used car market around the world, was changed forever with the advent of the internet. People interested in used cars of all makes and models have a number of different web sites they can use to try and figure out how much they should pay for their new car and how much they should get from the dealer for their trade-in. There are three big players for retail customers to consult for such information: Kelley Blue Book, the N.A.D.A. (National Auto Dealer Association), and Edmunds.

In this three part series I will present what I found when I did a little research on one specific vehicle to see how theses different price ‘guide’ resources check out vs. the real world of a franchised Mercedes-Benz dealership in which I live every day.

The car I chose to research is a car that we have on our Certified Pre Owned Mercedes Benz lot at the moment. This is a 2007 Mercedes-Benz C class.

Model: 2007 C280 4matic
Miles: 32,820
Color: Barolo Red / Cashmere interior
Options: Heated seats, moon roof, 6 disc CD changer
Details: Local MN car, one owner lease return, Certified Pre Owned, extended Mercedes Benz warranty good until mid October 2011 or 100,000 miles. Eligible for up to two additional years of Mercedes-Benz Certified Pre Owned Warranty covering the car up to October 2013 or 100k miles. Clean history report. Eligible for special Mercedes-Benz Financial financing for up to 66 months at 4.99% APR (OAC).
Original MSRP: $39,905
Current Sale Price at Feldmann Imports: $22,995 (Certified Pre Owned)

Each price guide is a little different. Some offer Trade-In values, Private Party values, and Suggested Retail Values, KBB is the only that includes a Certified Pre Owned category so it’s difficult to compare apples to apples.

They all describe the condition of cars a little differently, some have one number, others have three, again, making it difficult to get a really accurate number. On top of that, there is the interpretation of the condition descriptions. What might be ‘nearly perfect’ to one person, might not be ‘nearly perfect’ to another so there is some subjectivity involved.

I tried to set up a high, middle, and low price matrix noting the descriptive condition words for each price guide, when there was no specific descriptor, I put that number in the middle column, an “X” means there was no value given.

Let’s start with Trade-In values for this car based on these three price guides.

Trade-In values cover about a $4,000 range depending upon condition. In my experience most cars fall into the middle column. Their owners don’t always think so, but if you read the descriptions of good / average on the KBB and N.A.D.A. websites you’ll see that it’s not just about how the car looks on the outside, but what it might need underneath, and lets be honest, when it’s time to trade your car in it’s usually already overdue for an oil change, might need new tires, or at least need them fairly soon… a perfect car is usually driven to good / average status before it’s traded in, I mean, isn’t that one of the reasons you’re trading it anyway?

What is encouraging to see here is that the mid range price guide numbers only span a range of about $500 across all three guides. They all seem to be pretty well in line with each other.

What if you go to a dealer and they appraise your car lower than these numbers? And they most often will, and I will explain why a bit later. But what are your options?

Negotiate, of course. Demand more money for your trade, you can do that and generally meet somewhere between what you think is acceptable, as long as you have some justification for your number.

Needing $29,000 for your late model Chevy Tahoe that’s probably worth $19,000 in today’s ugly SUV market because that’s what you owe is not good justification, but there is generally a place to meet in between.

If you just can’t agree on a trade in value what other options are there? Sell your car yourself through Craigslist or some other online classified site. Remember though, when you do this you will pay tax on the full amount of the new vehicle. If you trade in your car you subtract the trade in value from the price of the new car and only pay tax on the difference.

Example: if you had a trade worth $10,000 and you were buying this C class and you bought the C class for $22,995 you would be paying sales tax on $12,995 instead of the full amount… about a $650 savings in this case using local Minneapolis sates tax rates. One always must keep this tax savings in mind, you can essentially add that tax savings to the trade in value of the car in your own head. If you’ve got an older car with 150,000 miles on it it’s not as important as it won’t be worth much or affect sales tax, if you’ve got a car that’s worth $30,000 as a trade in you’re looking a significant tax saving.

So, if you do decide to sell your car yourself or even buy a car from a private party, what are you in for? I’ll address those questions, and present Private Party Sale values according to our three price guides in the second part of this series.