“Of course, there are always surprises,” he says. “For example, in the last couple of years we have had to add our own experience of the changing fortunes of diesel cars.
Not long ago, Cap HPI and its rival Glasss Guide dominated the automobile valuation business. Things are different today. Tony Anderson runs Arena Cars, a used car dealership near Aldershot, and uses neither.
“I use the Retail Cheque, provided by Auto Trader,” he says. “He compares my cars to similar ones and tells me where, in terms of price, they are in the market. It takes into account details such as color and options. Using it, Ive had a sale of BMW for £1000 more than Cap suggested I would.
“Today, when customers can compare many prices with a single click of the mouse, the game consists of having them pass through the door of the showroom at prices that are not only competitive but, for me, reflect the unique attractiveness and value of each car.
He must be on to something: after a lot of shopping, my sons girlfriend bought him a Mini.
Karolina Edwards-Smajda, director of commercial products at Auto Trader, says her consumer check appraisal tool for retailers and Retail Accelerator for dealers rely on Auto Traders 450,000 daily used car ads to measure price, supply and demand. Its point of departure is the selling price of a car, not its commercial price.
“When they buy cars, we tell dealers not to focus on the commercial price, but on what they think they can sell for the car,” he says. “Calculating the margin with which they are happy to work and work from the selling price gives them the price they should pay.
Philip Nothard is the director of strategy and customer knowledge for Cox Automotive, owner of Mannheim, one of Europes largest auction groups. Does this former Cap HPI publisher believe that valuation suppliers, rather than market forces, determine the value of a car?
“The car industry interprets valuations better than it did and has a lot of data to refer to,” he says. “To get a clearer idea of the real value of a car, the main groups of dealers who buy and sell many cars supplement the guides valuations with their own specific sales data. So no, I think there are too many checks and balances for that.
The last word must be for Edwards-Smajda. When asked who he thinks is more accurate, Auto Trader or traditional appraisal companies, he says: “Its not whos more accurate but because there are so many variables, whos less wrong.