BuyerSignal™

Fair Price Index™ Methodology

A plain-language walk-through of how each Fair Price Index™ is calculated. This page describes the general approach only — proprietary weights, thresholds, and algorithms are not disclosed.

A market-context indicator, not a valuation

The Fair Price Index™ is a market-context indicator. It tells you where a specific asking price appears to sit within today’s comparable market — not what a car is “worth,” and not what any particular buyer or seller should do.

That distinction matters. Traditional valuation tools return a single number and imply certainty. The Fair Price Index™ returns a Price Position, a Comparable Market Range, and a confidence tier so you can decide how much weight to give it.

How each Fair Price Index™ is calculated

  1. Step 1

    Assemble comparable pricing signals

    For each analysis, the Fair Price Index™ pulls a set of comparable vehicles from currently available market data. Comparability is anchored on the vehicle you supplied — either exact-VIN or year, make, model, and optional trim — so we are always comparing like with like.

  2. Step 2

    Summarize the comparable market

    From the assembled set we surface a comparable market range and a median. These are calculated from real, current pricing signals — not from a legacy book value or a single third-party appraisal.

  3. Step 3

    Position the asking price

    The Fair Price Index™ then evaluates where the vehicle's asking price sits relative to the comparable market range. The result is one of five plain-language Price Positions (from Below Market to Above Typical Market Range), each with a short explanation of what the position means for a buyer.

  4. Step 4

    Report a confidence tier

    Every result carries a confidence tier — High, Moderate, or Limited — driven primarily by how many comparable pricing signals supported the analysis. When the comparable market is too thin, the Fair Price Index™ declines to classify and reports "Not enough comparable data yet" rather than pretending precision it does not have.

Confidence philosophy

Confidence should track how much market evidence supports the result. So instead of reporting a single number with false precision, every Fair Price Index™ result includes a confidence tier alongside its classification.

  • High confidence — 30+ comparable pricing signals from the Intelligence Analyzer.
  • Not enough comparable data yet — fewer than 30 comparable pricing signals from the Intelligence Analyzer. We refuse to classify below the high-confidence evidence floor. We would rather say “we don’t know” than mislead.

Market comparison approach

The Fair Price Index™ compares against current comparable pricing signals — the same market the buyer is shopping in — rather than relying on a single book value. Two important consequences:

  • When the market moves (new inventory, seasonal demand, incentives), the Fair Price Index™ moves with it.
  • When the comparable market is thin for a specific configuration, the Fair Price Index™ reports a lower confidence tier — or declines to classify — instead of averaging away the uncertainty.

What the Fair Price Index™ does not do

The Fair Price Index™ is not an appraisal, guarantee, offer, or prediction of future value. It does not incorporate vehicle-specific condition beyond available data, and it does not replace an independent inspection or vehicle history report.

For the complete list of what the Fair Price Index™ does and does not measure, see the Fair Price Index™ Disclosure.

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