sderman

I plan to purchase a 2014 ES350 and will be trading in the 2007 model. The KBB site give prices for 1) selling it privately, and 2) trading it in. For example, for an excellent 81K car the private selling price is about $16,100 whereas the trade-in range for an excellent model has a mean of about $13,800. My question is whether the KBB trade in value is a realistic measure of what a dealer should (with strong negotiations) give me in trade for a new car (assuming I also negotiate strongly on the new car price). I ask because I remember 7 years ago the dealer saying that the KBB trade in value was far too high but I felt that they were provided by KBB for a reason and should be accurate. Basically, I'm just trying to determine how strong my negotiating position is using the KBB trade-in value. Thanks in advance.

lesz

My experience has been that there is a fairly significant difference between the used car values given by KBB and those from Edmunds. The KBB values seem to be a bit high, and the Edmunds values seem to be a bit low.

One thing that tells me that the KBB values are higher than what happens in the real world is that, when I've checked KBB retail values against what dealers are actually selling the used vehicles for, the dealers are often selling the used vehicles for quite a bit less than what KBB shows the retail values should be. And, if KBB retail values are higher than they should be, I would guess that their trade-in values are similarly higher than they should be.

Joeb427

iTrader: (1)

Not in my NYC metro area.
Most dealers use the Galves Book here and the number is much lower in most cases.

jim256

One thing I have heard from dealers who I knew as friends, not necessarily just because I bought a car there, is that no car is "Excellent" unless they are trying to sell it. Excellent on a trade would be new tires, fully conditioned, no service required, no dings, perfect paint, very low miles.......it just is unrealistic to expect. And likely no car with 81K miles will ever be excellent. Too high for certified status, likely too high for a Lexus dealer to sell on the lot.

Also, "Trade-in" is a vague number, generated by lots of dealers selling different new and used cars--what is the margin on what you're buying? What incentives may the dealer have that influence his margin? How much of the trade-in includes discount on the new one? Kelly and others collect that data, but the real "value" of a used car to the dealer is the ACV (actual cash value), what he can sell it for today on the wholesale market. That's closer to the loan value or the Kelly Black Book, which has different data than the Blue Book.

Obviously, give it a try, and try 2 or more dealers, but IMHO be realistic.

Lexusxoxo

Dealers use wholesale blue books.. You can pretty much deduct $3000 from the KBB to get a idea..

Max707

Best guide is edmunds "good" trade-in amount. In the long run that is what they are going to give you. Another way to value your trade is take it to the closest Carmax and they will tell you what they will buy your car for.

wasjr

I have found KBB to be all across the board.
Dealers are tied in electronically to the latest auction results and typically use them to price trades.

As I have mentioned before, after I had negotiated the price on my wife's 300h, the dealer only offered $3,500 for her 06 Volvo S80. KBB was $7,300, Carmax offered $8,000 and I sold on Craigslist in a week for $9,700.

Thoughts:
1. Negotiate price of new vehicle first.
2. Max had great point. If you have a Carmax in your area, their price is a "real money" backstop on what you can get for your trade.
3. Consider tax effect. Trade (depending on state location) will reduce the sales tax of the new vehicle.
4. Look on cars.com, autotrader.com, and your local Craigslist to see retail prices, then back off estimate for dealer profit and prep to get a feel for a ballpark trade value.

Max707

Great approach and advice!!

Lexusxoxo

Carmax pays above book value?? Good to know!

sderman

Thanks all - really great advice - much appreciated!!!

wasjr

"Book value" may not represent the actual fair market value of a vehicle. I am not sure how often sites like KBB update their information. However, Carmax, as will all dealers, look online at close to real time auction results and take that into consideration in pricing a vehicle. Additionally, Carmax is such a large organization that they use their database of sales statistics in their pricing model as well.

Lexusxoxo

I was actually being facetious..

AFRetired

When I was selling used cars at the local Toyota dealership, the sales manager always advocated showing customers the KBB retail value because it was always higher than what we were listing.

tx170754

Take look at KBB and NADA values and go for something in between, this is what I'm using when I sell my cars and it is working fine. It is also depends on the overall condition and records of the car...extra packages unfortunately don't bring too much to the value of a used car. Good luck !

bc6152

I obtain the value from 3 or more online web sites such as Edmund's, NADA, KBB, etc. I then average the figure out and use that as a base. The key here is to value your vehicle as accurately as possible. Honesty counts. Colors even make a difference. Dealers will always find something to lower the value of your car. You have to be one step ahead...