What Do Car Dealers Use for Trade-In Value?

When it’s time to replace your current vehicle, it’s a good idea to trade it in at your local auto dealership. A trade-in enables you to avoid all the hassles and risks of a private sale and reduce the sales tax on your next car purchase. If that’s what you want to do, it’s essential to know how a car dealer determines the trade-in value of your vehicle. This can help you plan your budget properly and negotiate more effectively. Check out this detailed guide to get a better idea of how to calculate your trade-in value.

How To Find Out the Trade-In Value of Your Vehicle

The easiest way to get an estimate of your vehicle’s trade-in value is to use an online trade-in calculator

While it allows you to get your vehicle appraised from the comfort of your own home, an online trade-in valuation tool only gives you an estimate of the market value of your vehicle. That value can be considerably different from what your local dealership eventually offers you. This is because a trade-in calculator doesn’t take into account your car’s actual condition. If you want to know exactly how much you’ll get for your trade-in, you need to go to a dealership for an appraisal.

How Does a Car Dealer Determine the Trade-In Value of Your Vehicle?

When you arrive at our Marion dealership, we’ll run a vehicle history report on your trade-in. Then, our appraiser will thoroughly inspect your vehicle and come up with an offer. The following are some of the things we’ll look at when determining your trade-in value.

Vehicle Age

Most vehicles depreciate over time. They can be worth 20% to 30% less after the first year of ownership and go on to lose 60% or more of their value after five years. From there, the depreciation curve flattens out, but the value continues to decline. More often than not, the demand for your vehicle also decreases as it ages. Car dealers are generally willing to pay more for newer trade-ins as they’re easier to sell and can bring bigger profits.

Mileage

According to the United States Department of Transportation, the average American drives about 13,500 miles a year. If you drive less than that, your vehicle will likely fetch a higher trade-in value at a dealership as it has more life left. A 10-year-old car with 70,000 miles on its odometer can be more attractive than an 8-year-old one with 120,000 miles.

Overall Condition

The overall condition of your vehicle is one of the most important factors affecting its trade-in value. Car dealers don’t look at scratches, dents, a cracked windshield, a stained interior, or a sluggish engine as just blemishes or problems that make your trade-in less desirable. They’re more interested in finding out what it’ll cost them to repair your car to the point where it can sell at a reasonable price. Then, they’ll deduct that amount from your trade-in value. So, the more repairs your vehicle needs, the less your dealer will pay.

Maintenance History

If you want to get the highest trade-in value for your vehicle, you have to stay on top of your routine maintenance schedule and keep all the paperwork from every service visit. When it’s trade-in time, bring your maintenance records to show the dealership that you’ve given your vehicle the care and attention it deserves. A well-documented maintenance history can boost your trade-in value as your dealership can use it as a selling point for attracting prospective buyers.

Equipment

The equipment in your vehicle can also make a difference to its trade-in value. One of the most advantageous features is an automatic transmission. If you have an automatic vehicle, you’ll probably get hundreds of dollars more from the dealership than you would with a manual transmission. That’s because the number of people who can drive a stick shift has been decreasing in recent years. As such, your dealer will have an easier time selling a car with an automatic transmission.

Other features that can contribute to a better trade-in offer include automatic climate control, leather upholstery, power-adjustable seats, an upgraded audio system, and a sunroof. In colder climates, car dealers will pay more for vehicles with all-wheel drive, heated seats, a heated steering wheel, or remote start.

Current Demand

Even if you’ve maintained your vehicle and it’s packed with features, it may not command a high price if there’s no demand for it. For example, a make that’s gone out of business or a model that’s been selling poorly can be a disadvantage. Also, a vehicle with a neutral yet attractive paint color tends to have a better trade-in value than a similar one with a flashy paint job, as it can appeal to a larger number of car buyers. In times when gas prices are rising, dealers will likely pay more for used vehicles with good fuel economy.

Get Top Dollar for Your Trade-In Vehicle at Ike Honda

If you’re searching for a good trade-in deal in Marion, Illinois, look no further than Ike Honda. Over the years, our dealership has become a preferred destination for drivers who want to trade in their vehicles. Besides offering top dollar, we also have a fantastic selection of new Honda models and quality used vehicles to cater to all kinds of car shoppers. Regardless of your budget and lifestyle, you can rest assured that you’ll find your dream car on our lot. Contact us today to schedule a trade-in appraisal.