Most dealerships use 4-5 different sources to determine the value of a customers trade-in vehicle.

* Auction reports - This report is updated daily and provides actual selling prices of what dealers paid for vehicles bought at the auction
* NADA Official Used Car Guide - (Not to be confused with the free guide on the internet) This is the book that most lenders use to determine how much money to loan on a vehicle
* Black Book Official Used Car Market Guide
* Information from Wholesalers - A wholesaler buys vehicles that a dealership decides not to keep and sell on their lot
* The dealerships in-house appraiser 

The used car guides give dealerships a benchmark for determining trade-in value of all makes and models, however market values fluctuate based on actual auction prices, color, miles and the condition of the vehicle. Ultimately a professional appraiser must use the guides and the market conditions together, to arrive at an accurate number that a vehicle is worth.

In order to understand how customers can get as much as possible for their trade-in, they need to know how the guide works.  Step 1.  The vehicle guide gives the dealer a trade-in value.  This value is the maximum amount that they recommend dealers allow for a trade-in assuming that it is in perfect condition and ready for resale.

Step 2. The guide tells dealers to deduct for any reconditioning and safety expenses needed to bring the vehicle to perfect condition and to make it ready for resale.  These reconditioning expenses include tires, brakes, tune-ups, filters, shocks, exhaust, alignment, belts, safety inspections, dent removal, paint repair and detailing.

Step 3.  To find the fair market value of the trade-in, the appraiser takes the maximum trade-in value and deducts any costs of making the vehicle ready for resale and this will give them the fair market value for that used vehicle.

Step 4. The appraiser makes adjustments to the value based on current buy/sell reports from their dealership, market and auctions reports.

Factors That Can Affect Used Car Values
* Condition/Mileage        * Economic Conditions/Gas Prices
* Time of the Year         * Technology Changes
* Rate Subventions        * Market Supply and Demand

At South Star Chrysler if you have any questions about the dealership appraisal process or the market value of your vehicle, you can usually speak directly to the person who is appraising your vehicle.