How do dealerships determine your trade in value?

Question

I found out that the valude on my car according to Keylly Blue Book and NADA is about $8,000, but people keep telling me that I won't get that much when I go to trade it in. So, how do they determine the trade in value?

Answer 1

ok, so i worked at a dealership, and this is how it goes, it all depends on what the cost of the car is that your buying, and how much they own it for. So basically your car can be worth say 8000$ NADA, but the dealership tells you they'll give you 6000$, in all reality depending on how high of a profit they make off of the car your buying, they may inturn own your car that you traded in for 1000$, even though the wear and tear and all of that does determine the worth of your car, it all depends on how they want to work the numbers. so you will still get the 6000$ off on the new car you buy, but that 6000$ was just going to be profit, and instead they switched it over, so they can sell you 8000$ NADA car, for 2500$ and look like a "good deal" dealership

FOR EXAMPLE:
a guy traded in a 1976 chrysler new yorker, and we told him it was worth 3000$, and after he bought his car, we owned the new yorker for 0$ because how high our profit was on the corvette he bought, so, when we sold this new yourker for 1000$ people were saying it was a great deal, but we were really just making 1000$ cash profit

Answer 2

KBB and NADA are only guides and not the bible in what a car is worth. They go by what a market report is. Better known as MMR or manheim market report. Cars usually have a much higher book than they worth at a wholesale auction. Example would be a Ford Taurus. You can buy a Ford Taurus for thousands less than KBB or NADA tells you what is worth because to many car to few buyers. They determine what a car is worth buy what they buy it at auction or a factory sale. What is the car and I will give you all 3 reports.

Ita- is completly wrong- Dealers use NADA as a guide when purchasing a car but show you KBB when they are selling you car because KBB is way to high.

Here is example

2007 Chevrolet Tahoe LT 4x4 with 20,000 miles

KBB says $36,745.00
MMR says $28,220.00

Been in the business over 20 years.

Answer 3

Wholesale pricing or trade in value is all a dealer will give you for a trade in so they can make a profit and it also depends on a lot of other factors like mileage, condition, options, the current market conditions for that particular car (if the market is hot for it or not), sales trends, availability of similiar models, desire to close a sale, etc... You can usually get thousands more if you sell it on your own which is why a lot of people do if they are willing to invest the time and money. Or at least minimize your loss.

Answer 4

KBB and NADA have very little to do with the trade in allowance you will get in todays marketplace for a used vehicle.


All dealers use a wholesale guide or wholesalers market to determine the "fair" market value of a car.

This "fair" value will usually be 20-50% less than a NADA - or KBB trade in value.

The only way to know for sure is to go to a few different dealers and get them to appraise the car before you trade it.

Answer 5

Actually they don't go by the NADA value, they see the blue book value. We are going through that right now. Of course they will keep in mind the condition, and the mileage. Good Luck..

Answer 6

Your car may be worth $8000, but it is highly unlikely that a dealership will give you the entirety of the trade-in value. Some dealerships are better than others with this though.

Answer 7

The years of experience for the used car sales manager will help him determine what he thinks he can get for your car when he resells it, based on what kind of condition the car is in and how much work he'll have to do to have it in selling condition. He'll lower the price to you so he can resell it at a good profit. I'd suggest you sell it on your own.

Answer 8

They go by mileage / accessories...wear and tear on vehilce / appearences and all that.....like all car dealers....you basically give them your car...and you buy thiers.............thats just the way it is.......and you never hardley ever get its true value........and when you drive your new car off the lot...its value just dropped.......well below its sell price just for you signing the bottom line..it went from new to used in thAT MOMENT...........

Answer 9

By how gullible and uninformed the customer is!