“Why is my trade-in value so low?” It’s a question we hear more often than we’d like. Here at The Appraisal Lane, we want everyone to get as much money as possible when they trade their car in - that’s what our service is all about.
A big part of our job is helping people to understand the reasons behind the trade-in offers they’re receiving from dealerships and online trade-in value calculators.
We appraise thousands of vehicles every month, and one of the things we’ve observed is that people who have a solid understanding of how trade-in values work generally have a better trade-in experience.
So let’s jump in and take a closer look at some of the factors that might be impacting your trade-in value.
The Basics: Year, Make, Model, Mileage, and Condition
Your car’s value starts with the basics - year, make, and model. This should be pretty self-explanatory. If you’re driving a 2005 economy coupe, it’s going to sell for less than a 2015 luxury sedan.
Next up is mileage. Today’s typical car owner drives approximately 10,000 - 12,000 miles per year. Divide your car’s total mileage by its age, and find out what your annual mileage has been. If it’s higher than average, your car will be worth less. But if your annual mileage is below average, that should figure in your favor.
Condition is a bit trickier. When you’re thinking about the condition of your car, it’s important to be realistic. Try putting yourself in the buyer’s shoes and take a long look at your car.
Do you have cracked windows, scratches, dents, dings, rust, or faded paint? Are there rips, tears, or stains in your upholstery? All of these will have an impact on your trade-in value. After the dealer takes your car on trade, they’ll have to pay out of their pocket to fix these issues before they can resell your car to another buyer.
The Trouble with Trade-In Value Calculators
It’s true that year, make, model, mileage, and condition are the primary factors that determine your trade-in value. In fact, these are the only factors that are taken into account by most of the popular trade-in value calculators you’ll find online.
But in reality there are many more factors that come into play. We’re literally going to cover 10 more factors just in this one short article.
If you’ve gotten one estimate from a trade-in value calculator, and another much different estimate from a dealership, it’s likely that some of the factors below are impacting your offer.
Trade-in calculators simply don’t take these things into account, and as a result they can create confusion and leave a lot of people wondering, “Why is my trade-in value so low?”
Learn About Your Trim Level
Today’s cars are available in a variety of different trim levels, also referred to as packages. The “base model” typically has all of the standard equipment, but none of the bells and whistles that come equipped in the higher-priced trim levels.
Your car might have the sports package with upgraded suspension and better brakes. It might have the luxury package with premium speakers and fancy floor mats. Or it might have the tech package with a voice-controlled stereo and rain-sensing windshield wipers.
Make sure you know what trim level your car is, and make sure your dealer knows too. Trim level can have a big impact on the value of your vehicle, especially if you drive a late-model or high-end car.
Digging Deeper: How VHR Impacts Trade-In Value
Your car’s Vehicle History Report (also known as a VHR) contains a lot of important details about its past, including accidents, damage, title issues, mileage records, service history, repair history, number of owners, and more.
Before making an offer on your trade-in, dealers will check your car’s VHR to see whether it has a clean history, or a history of problems.
Popular VHR services like Carfax and AutoCheck make it easy to research your vehicle’s history. It’s wise to check your vehicle history report before you try to trade your car in. Failing to do so is a common reason why people end up asking why their trade-in value is so low.
Aftermarket Equipment: The Down Side of Lift Kits
It’s never fun to spoil someone’s love of spoilers, but this is a topic that really needs some attention. People buy aftermarket equipment to personalize their cars and make them stand out on the street. Bling. We totally get it.
But the unfortunate reality at trade-in time is that different people have different tastes. You might love your truck’s sky high lift kit, but another driver might not like the climb up into the cab.
Owners often think that their car should be worth more because they’ve spent extra money on aftermarket items. But try to see the perspective of the dealer who has to resell your ride. Sometimes aftermarket equipment can limit the number of prospective buyers, and therefore limit the value of your trade-in.
The Nitty Gritty: Lesser Known Factors that Can Impact Trade-In Value
There are lots of lesser-known factors that can impact your trade-in offer. These are things that trade-in value calculators don’t consider, and owners often overlook. But if you’re still wondering why your trade-in value is so low, one of these might be to blame.
Your vehicle’s engine is an important factor in determining its value. There are many different types of engines available today, including 4, 6, and 8 cylinders, diesel engines, hybrids, and electric engines. Some engine types are more popular in certain areas, and some drivers have a particular preference. The demand for your engine type in your local market will have an impact on your trade-in value.
Automatic transmissions tend to be more popular for daily drivers, and often bring a higher price at trade-in time. There are times, however, when a manual transmission can fetch a higher price - especially when it comes to sports cars and rare exotics. There’s also a niche market of consumers who prefer manual transmissions and are willing to pay more for a car with a stick shift.
In addition to the trim levels we discussed above, there’s a chance that your car has (or lacks) some additional options and upgrades beyond what’s included in the standard package. Do you have a sunroof, alloy wheels, or an optional backup camera? Options can increase the value of your trade-in, but they can also hurt you if there’s a popular option that you don’t have.
Popular exterior and interior color combinations can vary over time as styles and trends change, and they can also vary between different local markets. A good example of this is light-colored upholstery, which is more popular in warm climates because it doesn’t get hot as quickly as dark upholstery. A good color combination can bring a higher trade-in price.
Believe it or not, the area where you live can have a big impact on your vehicle’s trade-in value. If you’re trying to trade a full-size 4WD truck in rural Montana, you’ll probably do fine. But if you’re trying to trade a subcompact electric car in the same area, you might end up wondering why your trade-in value is so low.
The time of year when you decide to trade-in can also have an impact on the trade-in offer you receive. Let’s say that you live in the Northeast and you want to trade-in your convertible. Chances are you’ll get a much better offer in the summertime than you would in the dead of winter.
Parts, Repair, and Reconditioning Costs
If your car needs repairs, it’s important to research the costs of those repairs and understand how they might impact your trade-in value. Not all parts, repairs, and reconditioning costs are created equal. For example, a new windshield might cost $200 for one vehicle, and upwards of $1,000 for another. If your repair falls on the high end of the spectrum, don’t be surprised when your trade in value is so low that you think the dealer must have made a mistake.
Still Wondering Why Your Trade-In Value is So Low?
These are just some of the most common trade-in factors. We would need to write a book to cover every variable that can impact your trade offer. But we can’t write a book because we’re busy appraising cars.
If you’re still wondering why your trade-in value is so low, the best thing you can do is to submit it to The Appraisal Lane today. We have a whole team of professional appraisers standing by. We’ll review every detail about your car, and you can chat with our appraisers in real time if you have any questions about the process or your car’s value.