Trade-In Value Defined

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Senior Automotive Editor

Christian Gulliksen was the Senior Automotive Editor for CarsDirect. He was formerly a senior editor with Robb Report magazine, and has contributed to publications like Worth, Variety, The Hollywood Reporter and MarketingProfs.com.

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, Senior Automotive Editor - March 22, 2016

Trade-in value is what a dealership will pay for your current car, and it's almost always less than you think it's going to be.

This isn't because the dealer is trying to rip you off. Rather, you're probably expecting a trade-in valuation that looks like asking prices you've seen in used car listings at sites like CarsDirect. Those are retail and private party prices, though, and may be thousands of dollars higher than your car's actual trade-in value.

Dealers will offer you the equivalent of wholesale value. It's fine to negotiate. But with few exceptions, they're going to send your car to auction, and their main goal is to avoid losing money in the transaction. If they make any money, it won't be much.

There are a few ways to estimate your car's trade-in value before you go to the dealership:

  • Use the valuation tool at Kelley Blue Book by entering information about your car and selecting the "Trade In to a Dealer" button. Note: Even if you think your car's condition is excellent, bear in mind that most well maintained cars are rated as good or very good.
  • Visit Carmax for a free, no-obligation appraisal. In around 30 minutes they'll give you a quote that's good for one week. If the dealer you're using can't match or exceed that price, Carmax will buy your car.

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, Senior Automotive Editor

Christian Gulliksen was the Senior Automotive Editor for CarsDirect. He was formerly a senior editor with Robb Report magazine, and has contributed to publications like Worth, Variety, The Hollywood Reporter and MarketingProfs.com.

Follow On: Google+ | Website

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