Revisiting How To Use TMV And What Exactly Is It?

Two years ago we published our original article about how to use TMV and everything you should do to effectively buy a new car. Time flies fast and the original article has received tremendous response. Here though, we revisit TMV and look at new ways to improve your car buying experience.

No doubt, one thing that has not changed is the amount of research that should go into finding the right make and model car for your particular situation. Understanding TMV in conjunction with current market forces should be an integral part of your research.

The TMV or True Market Value pricing developed by Kelly Blue Book is still one of the dominant players in determining the wholesale value of your trade and the retail value of new cars for sale. Effectively, it is the result KBB's compilation of the actual prices of similar cars sold over recent weeks in your specific regional market.

In other words, it lets you know what you should expect when a dealer values your trade and the impact it will have on the out of pocket price you can expect to pay for your new car.

As we look to the summer of 2012, gas prices are creeping toward $4 a gallon. Will demand for SUV's and larger vehicles give way to their fuel efficient compacts and hybrid cousins as they did in 2008? Not surprisingly, trade-in values and retail market prices for these cars will fluctuate wildly in the next twelve months and the current TMV reflects this.

In addition, the credit markets have changed dramatically since the shakeup of late 2008 and early 2009. It can be harder to qualify for a new car loan or lease and you should certainly entertain all financing options prior to settling on the exact car you are looking for. Your local bank or community credit union are great choices for finance in your car buying process. Also look to independent leasing companies who do not have an allegiance to a particular make and model. 

As you near the end of your research, there are several ways to use the TMV to finalize negotiations for your new car purchase. A great way to find the car you want at a competitive price all from the comfort of your home or office is at CUAutoBids.com. Here, dealers compete to win your anonymous bid request. 

You can also get competitive bids on your trade online too.

Use TMV to ensure you get fair value for your trade. Increasingly, dealers know you are aware of TMV and are more inclined to get close to this number, although it still requires a little effort. However, bear in mind TMV is not an exact number and the dealer taking your trade assumes the risk he can sell it for a profit.

A second option that has come to market since March 2009 is TrueCar. This site is independent from Kelly Blue Book but is designed to provide similar values as TMV. As such, you can now be armed with two independent valuations of your trade and target vehicle to ensure you get the best possible value for both.

And no different from any year, you still need to know your market to know where you are going. Your new car is your destination and the best possible price is the desired outcome for your negotiations. If you know what you can expect to pay for the car, you can establish whether the offers you receive are worth considering.

Using a site like CU AutoBids gets dealers to compete to meet your price. This increased competition further drives down the price you can expect to pay. It is possible to stay in control of the negotiations and avoid spending too much time chasing the deal.

Obviously, when you know the TMV, you have the knowledge to take the uncertainty out of the deal.

Of course, dealerships are a for-profit business and have to pay their employees, cover overhead and marketing expenses. They deserve to make money. However, even if you are only offering a small profit for the dealer, a speedy transaction, promise of referrals, repeat business and the opportunity to service your vehicle is often well worth consideration for the dealer to take a 'skinny' deal.

Emphasize this point. Know you have more control than ever before and use this to enhance your negotiating position. At the very least, you should be able to buy at the TMV, if not at an even more favorable price.