Estimating car trade-in value

In My Humble Opinion
1

I’d appreciate hearing experiences with estimating trade-in value. I’ve got a very low-mileage vehicle (i.e., like 5,000/year) with a couple of minor body bangs (just plastic pieces that seem cheap to replace) and no other issues, so I’m thinking I should get a decent amount for it. I’d like to hear how others determine how much they think they should get for their old ride.

I’ve looked at the sites that estimate trade-in value (e.g., Edmunds, Kelly Blue Book) and at what my car is retailing for, but I’m not sure how to determine a realistic percentage to apply to each of those numbers to get in the ballpark of what a dealer will give me on a trade.

Thanks.

2

Many of them use the NADA site, but I can tell you from bitter experience that they are going to offer you bottom book on it, regardless of condition. What I’ve started doing is to price out a new car on Edmunds or Intellichoice to see what the factory invoice cost is. Then look at NADA book on your trade, which will give you a range, depending on condition. Shoot for somewhere in the middle on the trade, calculate the difference between that cost and what you’re willing to pay for the new car, and then tell the sales guy that information.

Example:

New car factory invoice: 20,000
Middle range price for your trade: 12,000
Difference: 8,000
What you tell the sales guy: “I can’t have a difference between my trade and the new car that exceeds 7,000 (giving some leeway, because he’s going to try to jack you up). However you arrive at that number is irrelevant to me.” When he comes back from the manager and tells you the best they can do is 10,000 difference, you tell them that you’re done. If he says 8,000 or close thereto, you have a deal.

This method has worked for me on my last two vehicles. When the salesmen came back trying to squeeze a few thousand more out of me, I became indignant and informed them that I was very clear about my requirements, and that if they couldn’t make the deal, we were finished. They can’t claim that you’re being unreasonable, because you will have the Intellichoice/Edmunds/NADA reports in a folder in your hand.

3

Take it to your nearest CarMax, they will give you an offer in about 30 minutes, that’s good for about a week. It will actually be pretty close, within $500 of what most dealers will offer you as well.

4

The value of a car is what the buyer and seller agree on. It’ll be higher for a mint, survivor 1969 Mustang, and it’ll be lower for a 5 year old Hummer H1.

It sounds like you have an appliance vehicle, which is good and bad. It makes the valuation more accurate (as they sell LOTS and LOTS of them), but your car may depreciate faster (because there are LOTS and LOTS of them).

You can make more money in a private sale, but you also have to include the hassle of advertising it, dealing with tire kickers, and the like. In a dealership situation, you have to deal with the underhanded crap the sales guy is going to run past you.

For our 98 Corvette, bought used in 1998, for $42,000 they tried to do the following:
give us lease rates based on the car being worth $45,000 and $50,000(!)
Charge us $350 for ‘window VIN etching’
Give us $7,000 for a trade-in that was worth $11,000

As it is, we ended up paying MSRP for a new car…for an 8 month old Vette with 8,000 miles on it…because it was in demand.

By the same token, I bought, brand new, a 2001 PT Cruiser for $21,000…I waited 7 months, bought it from CARMAX in Ga, had it courtesy delivered to Denver because they’d charge me MSRP and all the dealerships in Denver were asking $4k (or more) over sticker for them. Six years later, that car, with 48,000 miles on the odometer, was worth $4500.

TL;DR version: Buyin cars sucks, you will almost always get screwed, or deal with a lotta hassle. Your car is also worth less than you’d like…always. If not, you just don’t know you’re getting screwed.

5

Yeah, I’ve done that before and will do it this time as well (and thanks for the reminder, I’d forgotten about Carmax). One difference though is that you are really getting more for your car at the dealership because the sales tax works only on the differential.

For example: You want to buy a new $40,000 car, and your free-and-clear trade gets appraised for $25,000 at Carmax. The dealer can give you something a bit less than $25,000 and you will come out ahead because the sales tax is calculated on the difference between $40,000 and the value of your trade-in. You’d have to know the applicable sales tax rate and somehow value your time to come up with the price at which it would be worth it to buy from the dealership and sell to Carmax (and once I’m at the point of having dealt with each of them at least once, my personal valuation of my time skyrockets).

6

Yes, but if you don’t need your trade-in to buy the newer car, selling the car yourself can make you much more than trading it in.

7

Yes, but down that path lies much pain and misery. Carmax is open every day but Sunday and will cut you a check, shake your hand, and your done.

8

Your public library may have the NADA booklet. If so it will have the trade in value.

Years ago when I was chairman of our companies credit union loan committee, it used to be close to 70% of the average retail value.But I don’t know if that still holds. It will be about the same as the wholesale value if that is listed.

The thing to note is that the dealer will rarely if ever give you more for your car than the wholesale/trade value. He has to make a profit so no matter how he jacks the numbers around he will not give you what the car is worth at retail.

If you want to mess around with selling it yourself you will be able to get more than if you trade it in.

9

pssst. http://www.nada.com/ :wink: