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What Is A Car's Real Trade-in Value?
Justin Erickson
February 17, 2015 - 7:07 pm
Member Since: November 29, 2014
Forum Posts: 206
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We all have the same goal when it comes to buying a car and making sure we get the most possible for our trade-in.

At the least, we want to make sure that we're not being taken advantage of.

So, with the advent of the internet and the myriad of car information now available to us, we point ourselves over to Kelley Blue Book to find this all-important value.

Later, when we're actually negotiating with a Dealer, we find it's not quite this easy. The Dealer's trade-in figure is lower than the one we got from the internet.

So, we whip it out and ask for an explanation, and rightfully so.

The truth of the matter is that a vehicle's "trade-in value" is not a number that is simply black and white. It's quite "gray" actually.

You see, it's not unlike valuing your own home. What is your home worth? Well, you can get a ballpark idea ... maybe a general price range. But a precise and fair figure? Nope.

Why? Because there are a number of other factors that determine "value".

What have similar homes (or cars) sold for recently? How long did it take them to sell? Is demand currently strong? Weak? Somewhere in between? What's the premium currently being paid for extra features such as a pool or a shed (sunroof or leather)?

A Dealer tries to access such issues, and of necessity, "opinion" and "subjectiveness" are going to play a significant role. And much the same way as having your house appraised for a loan, you'll get different answers from different "experts".

Another factor is very fluid. The Dealer will certainly check what similar vehicles have sold for at the wholesale, Dealer-Only car auctions. Have there been a lot of them? Did the bidding of other Dealers indicate local Dealer demand?

What could he buy this same car for at the auction? If he's unable to sell it, what price would he likely get for it at the auction? Does he have other similar vehicles in stock that have been difficult to sell?

And then, whatever figure the Dealer comes up with, he's going to reduce it a bit further to reduce the risk he's taking in investing in your car. He doesn't want to lose the profit he's making on your new car when selling or disposing of your trade-in.

So what's a consumer left to do? Well, unfortunately, it's negotiate, negotiate, negotiate ... as unpleasant as it is.
The best alternative, however, is to sell the car on your own. Although this takes additional time and effort, it is often well worthwhile.

One way to do this is actually very simple: just put a "For Sale" sign in your back window. We've seen this for years, but now that virtually everyone has a cell phone, it often works quite quickly.

Another alternative is to list your vehicle online since people shop for cars on the internet now far more now than reading newspaper classified ads. High traffic sites such as AutoTrader or Cars.com charge in the $40 to $70 range and usually the ad runs until the vehicle is sold.

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