Here's Why Buying a Used Car is So Expensive in the United States

[bucolic_frolic]

5. "They hold no inventory and have no stake in the sale of the cars advertised on their website."

So if car sales fall to 2 million a year, who will pay the cost of producing the publication and maintain the website? They do get the money to support their business from somewhere. "Their commission is the fee they charge to advertise." So higher car prices enable them to charge more, or sell more ads, because there's more money flowing through the system.

I would say "open cry" auctions are the most visible way of determining prices being paid in that specific market of buyers and sellers. They can vary location to location, day to day, and month to month. As for the value of what's changing hands, that depends on the condition and mileage of the merchandise involved.

Debeers controls, or did control, the primary market in diamonds. The secondary market on used diamonds is not controlled, and the example he cites seems genuine to me. An appraisal is tweaked to suit who's paying for the appraisal, and the range can be wide, $1,000 to $2,000 for example. A buyer wants to make money, and wants a low price. An estate wants a lowball price for tax purposes. A taxing authority wants a high price for revenue streams to embellish their importance in the state budget. An appraiser will ask you why you want the appraisal. As long as you don't tell him what to do, or name a specific price, he likely goes along with your wishes. Price is a number pulled out of a range based on experience, market conditions, supply, demand. It's also an opinion by an expert. It's not real until the money changes hands.

If J.D. Powers were a market research firm, no one would ever have heard of them. They would quietly serve their customers instead of propagating the headlines - like a PR firm.