How do car market price companies get their data?
When i was in a car auction i talked with a guy next to me and he was writing down all the information of the auction. He told me he worked for a close by dealership and those numbers were used to decide on the trade-in values they could offer (as worst case the car would end up on that auction)
Today i was checking a price in one of the many sites that offer market values for cars/motorcycles. And their site mentions that they do research in auctions as well (public price) and also says
Consumer Private Party Transactions
Kelley Blue Book tracks consumer sale prices each year.
from www.kbb.com/car-advice/articles/what-are-kelley-blue-book-values/
How exactly do they get that? Unless the buyer or the seller report the transaction value to the company, how else can they get this data? Does the government sell private citizen financial information? Do they contact a few people and extrapolate (like TV ratings)?
And where can i find out more about also accessing this information, assuming it's public?
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From the link in the question:
Kelley Blue Book representatives audit these auctions on a regular
basis to gather a better understanding of what the highest possible
"actual cash value" of a given used vehicle will bring at auction.
Thus, they may have representatives at the auctions that record the transactions. If there is someone present at the auction, they may record the prices and thus this could be reported back. After all, if one witnesses the bids, these could be listed. This data could then be extrapolated like TV ratings.
Something else to note from that link:
Used values are determined by a proprietary editorial process. This
process starts with a thorough analysis of all collected data along
with historical trends, current economic conditions, industry
developments, seasonality and location. The resulting values reflect
the most current representation of a changing marketplace and are
therefore relied upon by a variety of leading organizations as well as
the average consumer.
Thus, there can be some massaging of the data they collect which isn't publicly known and thus it isn't just the data coming in that is used but rather there is something to be said for various factors influencing things as I'd imagine car prices in a big city may differ from a small town on some levels.
Does the government sell private citizen financial information?
Of course not. The government sells public citizen financial information. That includes everything on your registration forms other than your SSN/Address.
When you register car or transfer the ownership, the price is reported to the DMV (among other things, for assessing the sales tax). Thus, it becomes a public record, which data mining companies like KBB have access to.
KBB, NADA, Black book and all the others have no idea what an actual price of a used car is. Registrations that are public information shows the taxable amount, the amount you paid for the car less any trade. Therefore if you purchased a ,000 car and had a ,000 trade that vehicle would be evaluated as ,000 retail. That really throws the figures in the toilet, which is where the books should go.
If the books were accurate the banks would not loan over book value for a car, some loan up to 150%: (try to buy a house for 150% of appraised value). Shop different lots, look at the reputation of who you are dealing with, most cars these days are sold for the advertised price, not the book value. Remember next time you look at a book value, ask that company how they came up the value, you cannot get a straight answer, they will tell you it is a proprietary evaluation, really?
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