Articles & Tips

How Do Car Dealers Determine Trade in Value

How Do Car Dealers Determine Trade in Value

Shopping for a new car can be a fun and exciting task. The only downside of car shopping is haggling with the salesperson over your car trade in value. You may already have a specific price in your head for the car right off the back. However, in some cases the dealership will try their hardest to get that price lowered. Understanding how a dealer determines a trade in can better assist you in your negotiations.

What Matter Most on a Trade In

Essentially, three factors come into consideration in a trade in: the value, mileage, and appearance. The dealership uses the Kelly Blue Book website to determine the estimated value of your trade in. Once the dealership has valued your trade in, they will then deduct that amount if the car has seen excessive mileage usage. Cars that have high mileage are usually sold at auctions rather than dealerships. Auctions do not pay half the amount that an average buyer would pay. Therefore, a significant deduction will be taken off if your car has high mileage. Finally, yet importantly, is the overall appearance of your vehicle. If your vehicle is dirty, filled with items and your seat and mats are worn, the dealership will issue another deduction to the price of your vehicle.