SpyderSenseOC

I don't think I agree with that. I will pay what I feel the car is worth. If it's worth a hundred to me, I won't pay 105 just because or even if it's on BAT.

Archimedes

it’s not what you pay, it’s what the market as a whole will bear. BAT provides a valuable service for buyers and sellers that maximizes visibility of the vehicle and efficiency of the sale. If they didn’t, the market wouldn’t pay them for it. The idea that, because a car sold on BAT for $100k, plus a $5k buyer fee, means that an identical car is worth $105k in the market is nonsense.

PTSFX

I would argue that calling it nonsense, practically speaking, may be going too far. While theoretically I understand your point, from an individual buyer standpoint, I think the majority of consumers would look at the total cost when determining their bid.

If there are two identical cars, and one is on BAT/C&B and located 2.000 miles away, and the other is at a local dealer, I would assume someone would pay more for just “the car” that is local.

I’m purchasing a car that is priced well below MSRP, but it comes with a number of non-typical fees that bring the total cost of the car to just about MSRP - and it’s that all-in amount that I considered when making my purchase decision.

What the car is “worth” to me is what I’m willing to pay (and spend my time doing) to get it in my garage.

SpyderSenseOC

"Well, like, that's just your opinion, man."

Lucifer

It is the absolute definition of what the car is worth. When we say a car is worth x we mean what it is worth to a potential buyer. A potential buyer doesn't get any extra value from buying a car from BAT compared to buying the same car from their local dealership. And said buyer knows they will need to add an extra $5k on top of that. If an identical car was at said buyer local dealership for $3k more than its current bid at BAT (meaning $2k less than the total price), I guarantee that said buyer would have purchased the identical car from their local dealership.

MaddMike

This is avery strange take and not in line with generally accepted economics principles.

As a buyer on BAT and C&B, I was never willing to pay more than what I thought a car was worth because it was offered on one of those sites.

A better argument would be that because of bidding wars and the natural tendancy to want to win, prices may sometimes be inflated. However, vehicle to vehicle, no one purposely overpays because it is on an auction site. If anything, I'm looking for a discount for buying sight unseen.

Archimedes

By definition, fair market value is the price at which an asset would change hands between a willing buyer and willing seller, with both parties having knowledge of all relevant facts. It doesn’t include transaction costs paid to a third party for facilitating the transaction.

Archimedes

What about the amount the seller received for the car? Why is that not the ‘value’ of the car? They didn’t get the money you paid to BAT.

C’mon, the reason everyone thinks that the higher number is the value is because they want to think that they could sell their car for that, ignoring entirely that in the subject transaction they’re referencing the seller didn’t actually receive that amount.

Lucifer

Every single person here tells you that if they would have purchased a car through BAT they would absolutely consider BAT fee as part of the price, you are talking about $5k, not some $10 fee.

Archimedes

Agreed, but it doesn’t represent the ‘market value’ of the car. It is the amount you paid including the broker fee. Fair Value in financial terms is defined as an exit price. It is the amount that one would receive upon selling an asset. It’s even NET of transaction costs. If I sell my GT4 on an auction site for $100k and I pay $5k fee and the buyer pays $5k fee, the Fair Value of the asset, by definition is $95k, not $105k. It’s technically not even $100k. It’s the amount of value that I would receive if the asset was sold in an arms length transaction. I get why that’s not a popular view, everyone wants to think their car is more valuable than it really is, even if its just a few k.

lilbza

I have to say I agree with Archimedes. Stamp duty is quite expensive where I live, and it's an added cost to the buyer only, much like the BAT fee. If I sell my car for $250k, that's what it was worth on the open market, and the cost to the buyer with $15k stamp duty would be $265k. The car is now not worth $265k just because that's what it cost the new buyer. I don't see how a BAT fee or any kind of brokerage fee would be any different.

I get that as the buyer you will factor all purchasing costs into the final price on what you are prepared to pay, but I don't think that carries over as the "new" market value of that asset. To me, all fee's on top are generally considered a "loss", unless it's an investment where stamp duty and fees may become a tax deduction.

TXshaggy

I think we departed the jet if the discussion now involves taxes...

What is the metric we're trying to capture from a single BAT data point?

All you can say is Seller received X, Buyer paid Y.

Seller had different approaches he could have taken...all would have resulted in different "sale" amounts.

Same with the buyer -- BAT Fee, Broker Fee, ADM, Consignment, all add to a cost of acquisition.

There is a spread here depending on which side of the transaction you're on.

lilbza

I agree, was merely making a point that I don't think fees incurred by the buyer determines the market value of that purchase. What the item sold for is what it is worth, all fees on the buyers side are a purchasing cost, and should be considered a "loss".

PTSFX

Yep - too much nuance with terms that have different textbook definitions: value, worth and cost are all different enough for everybody to be correct.

mrclam

Maybe this is simple minded of me, but as a buyer, the car is worth whatever I am willing to pay for it - transaction fees and taxes included. The object I am purchasing is worth the all-in currency I am willing to exchange to have ownership of it. If, as a buyer, I have to pay BAT a 5k fee - I include that in the maximum price I am willing to bid on a vehicle.

When selling a vehicle, there is the market price, and there is the amount I am able to capture, which has various tradeoffs based on my preferences. If I am in a hurry, I'll trade the car into a dealer for definitely less money than I would get if I had it listed privately for 6 months.

For how people use the term value most commonly, in my experience, they are referring to the price you would have to pay to acquire the asset, not the price net of fees if you were to try to sell ilt. (e.g. with real estate you never refer to the 'value' of a house as being the price minus real estate commissions + closing costs...)