This is a part of car buying that most shoppers get very caught up in. There is an emotional attachment to your vehicle without question, and most car buyers get insulted by what they are offered in trade for their vehicle. In many cases, they have grossly miscalculated the worth of their trade on the high side almost always, and this leads to frustration with the number they receive from a dealership appraisal. In some instances the dealer is taking a shot and “low balling” a customer on their trade, but most of the time the dealer is within the current market value for the trade. They certainly allow for a little room to negotiate, and are holding back to some degree, but not thousands of dollars in most cases. If you follow the steps I am going to outline for you, it will help you navigate this process, and be confident you received the correct fair market amount for your trade. The key is to have a realistic expectation of what the current value is for your trade in, taking in to account the vehicles current mileage and condition. Now we all think our car is in excellent condition because it is ours, but is that the case in reality? That is open to interpretation. You have to be honest with yourself and assess your current car with an open mind. I suggest asking some friends or family to give you an assessment of the vehicle as if they were going to buy it from you. Let them look it over, and see what flaws they pick out on their own and ask for their honest opinion. I would ask at least a few people to do this for you. Have them rate the vehicle in terms of excellent, good, fair, and poor. This will help you to rate your vehicle correctly when researching the value, and reduce the amount of tension when having your car or truck appraised by a dealer. Keep in mind that the dealer is never going to give you retail money for your trade, or private party value. They are not in the business of paying retail money for a customers trade in. It may appear that way if they are at full price for their vehicle, and an inflated value for yours. This is known as “trade allowance” and should not be confused with “actual cash value“. This is just moving around the numbers to give the illusion of more for your trade, and not the true wholesale number. The wholesale value is the only thing a dealer is going to be looking at when they appraise your vehicle. This is the value that the dealer can reasonably expect to get for your trade by selling it at auction, or to another dealer. If the dealer has plans to retail your trade in, then they will go beyond that number to a certain point to make a deal happen if both sides are close. This is not an exact science even for the dealer. There are many factors that can affect the value of your trade in the marketplace. These factors include condition, supply, demand, time of year, wholesale values, auction values, and desirability. The dealer will take this all in to account, and most use sophisticated software these days to help with this process. I am sharing this with you so you have a better understanding of what to expect from a dealership appraisal. It always helps to know both sides of the equation. so you have a good understanding of the process from both perspectives.
There are a number of sources to get a market value for your trade, and I will give you a few examples.
1. NADAGuides.com
This stands for the National Automobile Dealers Association and it was founded in 1917. This is a very old name in the business, but most dealers still use the information that is supplied from this source. It is still widely used in book form that dealers subscribe to, and received on a monthly basis. Most consumers will use the online version. You simply enter the year, make, model, mileage, options, and the site generates trade, as well as retail values.
2. KelleyBlueBook.com
This is a name that is synonymous with used car values and many consumers turn to this for their trade research. This is a great site, and it can be very useful when compiling your information to assign a value to your trade. The only thing I caution when using this site is that the values tend be on the higher side, and not truly indicative of the current marketplace. In my experiences the figures generated appear to be closer to trade allowance values. They generally fall in line when the value is applied to MSRP’s and retail prices. These and other sites are all guides and should be used that way. They can fluctuate according to market conditions, supply, demand, and other factors.
3.Edmunds.com®
Edmunds.com also has an Appraise My Car tool that will help you determine the worth of your trade. Simply follow the steps by adding your zip code ( if it does not populate), vehicle info, options, color, condition, and mileage, then click Appraise My Car and the system generates then numbers. The site supplies the trade value, private party value, and retail pricing for you. This should add to your research numbers and give you a better understanding of the current market values for your car or truck.
4.Cars.com™
Cars.com uses an appraisal tool that is powered by BlackBook®. It is simple to use, and you just need to plug in your car information and it will also provide you with a trade value, dealer retail, as well as a private party value. The tool also supplies you with condition values for clean, average, and rough condition. You can also select any additional options, and the values will adjust accordingly.