How Car Trade-In Prices Are Determined

February 23, 2012

This guide examines the role of mileage, year, condition, desirability, and make and model in determining auto trade-in prices.

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A top concern for those who are buying a vehicle is car trade-in prices. Trading in a car in has numerous benefits, including convenience and a complete release of liability for anything that is or may go wrong with the vehicle. These benefits come at a cost however. On average, you will get less money for your car if you trade it in as opposed to selling it yourself.

Generally speaking, dealerships consider the following points when determining how much money they will offer on a trade in:

  • Year. The newness of a car is one factor dealerships consider. Typically, newer vehicles are easier to sell than older ones. Used car shoppers are attracted to newer used vehicles that undercut the price of similar new ones. The newer a car is, the more attention it will receive from buyers. The more attention a car receives, the quicker it should sell. When a dealership anticipates a quick sale, they are more willing to pay a higher price for it
  • Make and model. The make and model of a vehicle also plays an important role in determining trade-in value. Certain makes hold their value much better than others. For example, Toyotas and Hondas have historically strong resale values. These brands will generally receive higher trade in offers than comparable Chevrolets and Fords. Additionally, certain models within a specific brand may also carry higher trade in values, even if the brand itself is not a desirable one. For example, most Chevrolets don't carry a top dollar resale value. However, a Chevrolet Corvette will garner a higher trade in value due to its exclusivity and popularity
  • Condition. How well a car was maintained can carry a lot of weight when trading in a vehicle. An exterior with scratches, dents and faded paint will contribute to a lower offer. An interior with ripped upholstery, cracked dashboard and stained carpet will also translate to a reduced price. Well maintained vehicles should get higher prices upon trade in
  • Mileage. Similar to a vehicle's condition, its mileage is also a key factor in determining trade-in value. Higher mileage vehicles will generally fetch lower trade-in offers. As stated above, many buyers want a used car that looks and feels like a new car. Even if the vehicle's condition is impeccable, an odometer reflecting high mileage may make a consumer less willing to purchase a car at a price acceptable to the dealership
  • Desirability. A vehicle's desirability will drive its trade-in value perhaps greater than any other factor. A dealership is not going to offer top dollar for a car they don't think they can sell. Conversely, vehicles that allow the dealership to mark up the sales price will receive stronger offers upon trade-in. A quick glance at the current headlines or car magazines can provide an idea of what's popular at any given moment

Other considerations are factored in when a vehicle's trade in price is determined. To begin your research, receive a free, instant online trade-in appraisal on the CarsDirect website.