How to Determine the Fair Market Value of a Car

Know the Process

Here’s what not to do when it comes to buying a new car: don’t just think “I want this car” and go to one dealership that’s probably the closest or most convenient to you and look for a deal, and then try to negotiate from there.

That sets you up to fail because you’re going to fall into their process. Most dealers know they have the power the moment you set foot on their lot, so it’s important to prepare ahead of time.

Dealers and car salespeople are trained on sales and negotiation, and they know how to do it on the spot. Remember, this is their job; they do this all day, every day.

Buyers, on the other hand, may only deal with this transaction every 3, 5, or 10 years — so most of us don’t have these skills (or at the very least, we’re not using them every day).

You need to first understand the structure of the buying and sales process, and then you need to do your research before you ever set foot on a dealer’s lot.

Paul Sydlanksky, CFP®

Founder, Advisor

“I founded Lake Road Advisors to help people just like you take the confusion and anxiety out of financial planning.”

I earned a B.A. in Economics from Marist College and an M.B.A. from New York University. Then I spent 13 years working on Wall Street with Morgan Stanley, first in the Private Wealth Management Division and then in the Institutional Equities Division.

In 2009, I became the father of twins, and in 2011, our third child arrived. By this time, the aggressive Wall Street lifestyle had lost its appeal. I had a solid career path, but I wasn’t seeing my family enough and living the lifestyle I truly wanted. Ultimately, I decided I wasn’t willing to sacrifice my family life for a fast-paced career.

In 2012, my wife and I made the decision to put family first and move to Upstate New York. We landed near the only place I had been able to slow down, Keuka Lake on Lake Road. A few years after moving here, I became a CERTIFIED FINANCIAL PLANNER™. Then in 2016, I founded Lake Road Advisors to help other people simplify their lives, just like I did.

I’m proud to offer a simpler, more transparent method of financial planning services than most other advisors. It’s my goal to help families and small business owners feel less stressed about their finances so they can slow down and enjoy the most important things in life.

After all, charting a path to reach your goals shouldn’t be stressful. It should feel exciting and rewarding. When you think about the dreams you have for your future, you should feel happy and confident.

Together, we will plan the route to get you there.

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Understand Pricing Terms

As you start researching cars online, you’ll probably see an abundance of prices and pricing terms online. The three main ones to focus on are invoice, and selling price

MSRP, or Manufacturer Suggested Retail Price, is just that – a suggested price. This is often seen as the starting point for negotiation.

On the other end is the Invoice Price, or the price the dealer paid the manufacturer for the car. This price may not always reflect the dealer’s actual cost. Because incentives and rebates can differ from dealer to dealer, it is not always a consistent reference point.

Selling Price, the most important number to know, is the actual price the car sold for. While knowing the selling price isn’t always easy to find out, with TrueCar, you can see what other people in your area paid for vehicles similar to the one you want.

This critical pricing information can help you see instantly if the price you’re being offered is fair and helps you break through the clutter of pricing frequently seen online.

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