Car Trade-in Tips: How Can I Maximize My Car’s Value?

By KBB Editors 08/15/2022 12:00pm

Trading in a vehicle

When purchasing a new or used car, buyers should try to get the best possible price on their desired vehicle. Presenting a trade-in car at the time of purchase is arguably the best method of lowering the final price of a new vehicle.

These days, car trade-ins get top dollar. So why shouldn’t you? We’ll tell you about how trade-ins work and what you can expect.

RELATED: Is Now the Time to Buy, Sell, or Trade-In a Used Car?

What is a Trade-in?

A trade-in car is a vehicle you offer to the dealership for credit toward the price of the automobile you want to purchase. Generally, a trade-in can be any vehicle with value, but the amount for the trade-in can vary greatly. Factors that determine the value of your trade-in include your car’s mileage, condition, the demand for that particular make and model, and your skill at negotiating a price.

The moment a new car leaves the lot, it begins to lose its value, known as depreciation. It continues each year until the car no longer has any resale value. The resale value is the highest amount you’re likely to get using your car as a trade-in. Cars tend to depreciate the fastest during the first five years of ownership. That makes depreciation one of the most significant expenses of car ownership.

So How Does It Work?

Your existing vehicle doesn’t lose value simply because you select to purchase another from a car dealer. Your existing vehicle has a “trade-in value” with the dealer, based on the automobile’s market value. This credit can significantly lower the price of your new purchase.

The trade-in value is the amount that a car dealer pays you toward the purchase price of a new or used car in exchange for your old car. The savings can be in the thousands depending on the quality of your trade-in. A lower price also means a cheaper car payment when you finance the purchase.

TIP: Did you know you can trade in your car and earn tax savings in certain states? That’s right. Some states allow you to pay fewer taxes based on the value of the difference between the vehicle you purchase and the amount of your trade-in.

Where Does the Trade-in Value Come From?

The car’s trade-in value is based on the market price for that specific vehicle. This market price may be difficult to determine unless your vehicle happens to be in pristine condition. If yours is a rare automobile with no damage or work needed, then the trade-in value should be slightly less than the Kelley Blue Book Value for your car.

The Kelley Blue Book Value is a price for a particular automobile make and model from the largest automotive valuation company in the U.S. Listed automobiles get appraised, and market values assigned. The best values come from undamaged vehicles that do not need repairs. These values are the best price a seller can potentially get for such a vehicle if sold directly to a consumer.

How Much Can I Expect From My Trade-in Vehicle?

Most trades will not get top Blue Book Value unless they are in perfect condition because that price leaves no room for dealer profit on resale. Besides, few used cars actually qualify for full market price. While you avoid the headaches of selling to a private party, your trade-in will likely receive an offer below its actual resale value. Typically, it’s any estimated repair costs, allowing the dealer to repair and resell the vehicle at a profit.

The trade-in value for most vehicles is negotiable. However, the buyer should know a few things before taking the trade-in vehicle to the dealer for an appraisal.

How Can I Maximize Trade-in Value?

The vehicle should look its best for you to get the best trade-in value possible. A cleaned and detailed car is worth more at trade-in than a worn and poorly maintained one. You might consider detailing your vehicle and making any minor car repairs. Fixing issues like windshield damage or minor engine issues, and cleaning it before an appraisal by the dealer can net hundreds more on the trade-in.


The trade-in value you receive for your old vehicle can equal instant savings when purchasing a new car. Using a trade-in lowers monthly payments on a financed automobile. You can apply that value to a more luxurious model or add a few more options. Whatever your choice, trading in your existing vehicle is an excellent way to rid yourself of an old car.

Pro-Tip: Try a Cash Offer

In addition to providing valuations, Kelley Blue Book offers a tool that eliminates the hassle of trading or selling your old vehicle. KBB’s Instant Cash Offer is a genuine offer for a specific amount to purchase your car or to apply towards another car.