How do car dealers determine trade in value?

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How do car dealers determine trade in value?
A number of factors help a dealer determine the value of your car. (car dealership 1 image by Alexey Stiop from

If you're trading in a vehicle to lease or buy another one, part of your experience at the dealership may involve negotiating the value of the vehicle you're surrendering. Though trade-in valuation practices may vary from dealer to dealer, most have an in-house system for determining how much they will pay for your vehicle.

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Vehicle Age and Mileage

How old your car is and how many miles you have on it will help the dealer determine the value. In general, automobiles lose value as they age. Likewise, the more mileage a car has the less it will be worth. Dealers take into consideration the age and odometer reading because it also may affect any manufacturer's warranty.

Cosmetic and Mechanical Considerations

Prior to assigning your vehicle a value, a dealership will likely thoroughly inspect its interior and exterior. On the outside, they will look for scratches and dents, examine head and tail lights and the condition of your glass and mirrors. On the inside, most dealers focus on electronic components, upholstery and carpet condition.

The most important component of your vehicle, the mechanical parts, will carefully tested. The dealership will likely have a checklist to help rank and evaluate your car.


The local demand for your vehicle's make and model will affect its value. If your car is highly sought after, a dealership may take that into account. If your car is readily available, the dealer has similar models in stock or it is not in high demand, its trade-in value may be lowered.

Book Values

Professional dealers have access to wholesale book value and the Manheim Market Report to help determine how much your vehicle is worth at auction. The value of your car will be determined by what similar vehicles are currently available for at wholesale cost.

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