What Is the Difference Between True Market Value & Suggested Retail Values in Auto Sales?

What Is the Difference Between True Market Value & Suggested Retail Values in Auto Sales?
••• Polka Dot Images/Polka Dot/Getty Images

Auto-sales businesses must excel at negotiating with customers, who have more knowledge than ever. Before the advent of the Internet, relatively few customers could analyze national selling prices and use that information to negotiate the best deal. Today, just visiting a few websites to research current car values is enough to help your customers put themselves in a strong negotiating position.

True Market Value

A car’s true market value is calculated by a consumer-research group or company, such as an automobile-advice website or magazine. The number typically reflects regional or national average selling prices for a particular model. Buyers can use the true market value to decide if prices from local dealers are fair or if there is still room for negotiation. For example, if a consumer-research group says a particular model typically costs $18,000, car buyers could reasonably decide that amount will be the maximum price they will pay.

Suggested Retail Value

Typically, car dealers purchase automobiles directly from car manufacturers, which suggest a retail value for each model. The suggested retail value, also called the sticker price, helps standardize prices across a region, but dealers often just use the price as a starting point for negotiations with buyers. For example, suppose a customer walks up to a car at your dealership and sees the suggested retail value posted on the door. If the customer balks at the high price, your salesperson can mention there is room for negotiation, which might persuade the customer to come inside and discuss the situation.


Cars sell for different prices in various regions. For example, if your car dealership is in a relatively high-income region, you often can obtain higher prices for the cars you sell, as can private owners who sell their used cars. The type of buyer and seller also can affect the price of a car. For instance, you might get a higher price selling your stock to a private buyer than to another dealership.

Expert Insight

Well-informed customers will know the values of the car they hope to buy or sell. Many automobile-enthusiast and consumer-research websites offer online price calculators that take into account the many variables that affect a car’s value, such as region, mileage, wear and tear, and accessories. With the experts’ recommendations in hand, buyers and sellers alike can ensure they end up with sensible deal.