Trade In Car
Many times a customer will offer his or her car as a trade-in in hopes of offsetting the final price paid for a new(er) car which the buyer is interested in acquiring. If this buyer has full ownership of (owing no payments on it), the car will not only offset the selling price but also lower the sales tax paid on the new(er) car in most states.
To an average dealer, the actual cash value of a trade is an opinion of what the vehicle could reasonably be sold for at auction in six weeks to three months time, less any reconditioning costs should the dealer be unable or unwilling to re-sell the trade to the public. Since most states have requirements for a dealer to warranty or even guaranty a used vehicle for a certain amount of time and or mileage if sold to the public at a certain price, a dealer must make a profit selling the previously traded car (now a used car).
Trade in value is an important facet of the car deal. Trade value estimates can be found at sites such as NADA,KBB, Edmunds, and Consumer Reports. However, most of these values are estimated from a theoretical chart that may or may not be based on recent average sales prices of a particular make and model. If a particular make and model has less accurate data available from recent auction prices the dealer will be more cautious in the appraisal of the car. Inputting an identical used car on each of the above sites will render different values. Sometimes these values will differ slightly,while at other times their sites may differ significantly.
A dealer may have a manager who appraises each vehicle offered for trade. This person will often be the person who also attends used car auctions, often buying and selling on behalf of the dealer. This person will have a realistic idea of the actual cash value of the trade. A dealer will look at a trade for body damage, windshield damage, engine noise, and known problems with a particular model, and price it to re-sell it at a profit.
The better way to get a real idea of what a trade car's value is to go to at least three dealers and ask them what they would pay for a trade outright. One or more dealers that handles that particular make and model when sold new should be consulted.