How Do You Use the TMV and What Exactly Is It?

Author: Tim Cartwright
Date: Mar 17, 2009 - 9:10:01 AM

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As you set about buying a new car, you are going to find yourself picking up on a whole range of words and phrases you have never heard before. One of the terms you are bound to hear is TMV.

A lot of research should go into finding the right make and model car. Everyone has different transportation needs and part of your research effort should get you focusing on how you are going to be using your new car. You need to think about who is going to drive it, when, where, and how often.

You’ve got to get to know the market for new cars as well. You have to take a look at the deals and financing options available.

The TMV or True Market Value pricing is the average price at which a car is sold in a consumer's specific region. In other words, it lets you know what you'll pay for the car you want. It helps you understand what a sales person is going to be trying to charge you for the car you want.   It also helps you get to an idea of where negotiation can go.

There are two ways to use the TMV during the negotiations for your new car purchase. Although you will probably have competitive bids from dealers when you use AutoBidsOnline to advertise the type of car you are looking for, you should still be prepared to work out a price with your dealer.

You can try one of two methods. If you don’t shy away from confrontation and you have time to devote to negotiations, you can negotiate without revealing the TMV price.  

If you don’t reveal the TMV price, you can focus on negotiating in a traditional way. You can continue in the negotiations to bring the dealer to the price you want without disclosing it upfront.

Your second option is to reveal the TMV up front and stick to it as the price that you are going to pay. You can simply dismiss dealers who will not offer you the price you want.   A consumer armed with the TMV can empower themselves on strong footing with the dealer.

Although the TMV does not necessarily indicate the best deal available for a particular vehicle, it gives a particularly good indication of the average of the transactions within a given region. There are many variable factors affecting price, including a dealer’s inventory levels and a dealer’s eagerness to sell.

If you know your market, you know where you are going. You have a destination, a desired outcome for the negotiations. If you know what you can expect to pay for the car you want, you can establish whether offers you receive are worth considering or not.

By having the dealers contact you, it is possible to stay in control of the negotiations and avoid spending too much time in pursuit of an agreement.

When you know the TMV, you take the uncertainty out of the deal.

You may think that dealers will shy away from a low-ball offer for a new car, assuming that they can make more money selling to someone else. Of course, dealers are in the business to make money, so they are not likely to accept offers that equate to a loss for their dealership, but money is money. Even if you are only offering a small profit for your dealer based on the price you want to buy at, a speedy transaction is often well worth consideration for the dealer.

You can certainly entice dealers to sell to you on the basis that you are ready to complete the transaction quickly and have the financing in place. Think of it from their perspective. Many people looking to buy new cars have to wait for approval financing. Even people with good credit can struggle with this process these days and the rate of interest or other terms night be a deal breaker.

Dealers may well be happy to sell for the TMV if they are assured of a quick turn over. A deal like this requires considerably less time than the traditional type of sale. When a dealer doesn’t need to sell to you, when you are already ready to buy, their workload is significantly reduced.

When you emphasize this point, you 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.

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