SOURCE: Carlypso

Carlypso

December 18, 2014 11:00 ET

Carlypso Releases Study Showing Trends in Car Selling Across the U.S.

The Keys to Buying a Good Used Car -- Act Fast on Good Deals, Look at Cars Under $20,000, Ignore KBB, and Buy It in Green, Red or Blue to Save

SAN CARLOS, CA--(Marketwired - Dec 18, 2014) - Carlypso, the first technology company to help owners sell used cars completely hassle-free for more money than a trade in, announced today the results of a study on used car sales trends. The results are part of a study Carlypso conducted over four months (May to August 2014), examining 2.5 million used car sales across 97 metropolitan areas. 

As part of Carlypso's sales process, the company analyzes millions of transactions each month to get an idea of "true" prices. While Kelly Blue Book and NADA guides have helped users for decades in establishing pricing guidelines, Calypso's rigorous price algorithms go a level deeper -- predicting the selling price and selling time of any make, model or trim.

Some of the most interesting findings around car sales were:

  • Not surprisingly -- ACT on good deals quickly.

    • For top selling cars in the US, a reduction in price speeds up the time of sale. On average, high volume models (such as the Toyota Camry, Honda Accord, etc) sold in days. To speed up the sale, aggressive pricing helps. For each 1% decline in price, the speed of sale was faster by 1.5 days.

    • On some models, such as the 2011 Toyota Camry, the impact is even more dramatic. For a vehicle advertised above the market price (i.e. above the mileage-adjusted average), the car sells on average in 35 days. However, a car that is advertised below market price sells on average in less than 10 days. So if that used car is priced competitively, be prepared to act fast.

  • Bad deals will eventually be good deals -- just wait.

    • Many used cars begin as opportunistically priced for the seller. A seller typically reduces prices 3 times before the vehicle sells. The cars that take the longest to sell are often wrong on their initial pricing by as much as 10% from their original price.

  • Ignore Kelly Blue Book -- look at the market.

    • Kelly Blue Book is a great reference, but ultimately your local dealerships are more versed in the market prices of their cars. Certain makes and models will universally exceed KBB values. Here are some examples of just how far off KBB can be:
      • 2008 Toyota Prius VI:
        • KBB price: $9,476-$10,844
        • Market Transaction Average: $13,590 (66k miles)
      • 2007 BMW 328i :
        • KBB price: $13,087-$15,736
        • Market Transaction Average: $11,700 (68k miles)

  • Price at or below $20,000 -- It's a key psychological threshold.

    • People appear psychologically pre-disposed to searching for cars "Less than $20,000." As a result, there's a huge gluttony of cars priced right at $19,999 or $20,000 and correspondingly some of the best deals are here.

  • Don't buy your new car in a flashy color.*

    • On average, yellow, red, green and blue used cars sell for 2.1% lower than the more popular colors (e.g. black, silver). This is despite the fact that you don't pay more for those colors when it's a new car.

About the Methodology
For this study, Carlypso used a sample of four months of data for the months of May to August 2014 and cleaned and processed its dataset is to a size of 2.526 million cars. The final data set has car information that includes, but is not limited to: the car's characteristics (year, make, model), the car's data of sale and price history, the location and coordinates of where the car was sold, the changes in price the car went through from first being offered for sale until it actually sold. Carlypso found that a sample of 2.5 million was sufficient to yield statistically significant calculations. Statistical outliers have been removed, as well as cars that sell in volumes too small to produce statistically significant results. Carlypso also used metrics to gauge the probability of transaction actually occurring based on the amount of information that a buyer might have. This enables Carlypso to identify market opportunities, and it is able to identify transactions that are more likely to happen by accounting for differences in information between the buyer and seller in the car market.

*This finding was based on dataset of nearly 3,000 cars.

To see more details about the study itself email Nima Veiseh at nima@carlypso.com.

About Carlypso
Carlypso is the first technology company to sell used cars hassle-free. Carlypso generates a fair market price for vehicles based on millions of vehicle transactions each month, and coordinates all of the logistics for the seller, including finding the buyers, to get sellers the best price possible on their vehicle. The company has developed a secure proprietary device installed on cars to track vehicles, allowing buyers to do test drives on their own. Carlypso, based in San Carlos, CA, has sold hundreds of cars to date for consumers throughout California and is expanding nationwide. For more information visit www.carlypso.com.

Contact Information

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    Kerry Metzdorf
    Big Swing Communications
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