What Your Toyota Trade In is REALLY Worth
UPDATE: This year, Ford is gearing up to release an all-new truck at the 2014 Detroit Auto Show (Tim will be there on January 13 and 14). With this in mind, we thought it would be fun to rehash this article about trade in value.
One of the benefits of buying a new Tundra is that it is consistently at the top of the industry in terms of resale value. All things being equal, a Tundra holds it’s value as well as or better than an F150, Ram, or Silverado/Sierra – at least according to studies released by KBB.com, Edmunds.com, AOL autos, and many others over the last few years. As a result of all this positive press, many Tundra owners expect top dollar for their trucks…but how does a Tundra owner figure out what their truck is really worth?
Online Pricing Guides – Use With Caution
Based on conversations with a few Toyota dealership personnel, here’s the inside story on figuring out what your truck is worth.
Online pricing guides are a mixed bag. As you can see from the table below, there’s a pretty fair amount of variation between guides.
Wholesale/Trade-in Values As Listed by NADA, Manheim, and KBB
|Vehicle||NADA Wholesale||Manheim Auction Value||KBB Good||KBB Excellent|
|07′ Toyota Tundra Dbl. Cab SR5 4×4, 50k miles||$19,625||$20,200||$18,650||$19,600|
|07′ Ford F150 Super Cab XLT 4×4, 50k miles||$18,025||$16,850||$15,900||$16,750|
|07′ Chevy 1500 Extended Cab LT 4×4, 50k miles||$18,675||$18,800||$16,750||$17,600|
|07′ Dodge Ram 1500 Quadcab SLT 4×4, 50k miles||$17,800||$17,650||$15,925||$16,775|
All truck values calculated Nov. 21, 2010 using 5.7, 5.4, 5.3, and 5.7 liter engines (in order), short bed, and no other adds. Values are for “average” vehicles in Denver/Western States market.
The Manheim auction data we have is not available to consumers – it’s only available to dealers who pay a fee to access this data. However, it’s the most accurate source of data on what trades are worth. It’s based on actual auction transactions from across the country, and auction value is synonymous with trade-in value in most cases. The data changes from day to day.
KBB.com tends to be fairly accurate (they update data weekly), but they also give consumers a chance to over-estimate their vehicle’s value once people start checking off options (more on that below).
It’s harder to over-estimate your truck’s value with NADAGuides.com, but it’s also possible the NADA value will be too low.
We didn’t even bother to list the Edmunds.com used car “True Market Value” data for average condition used trucks. It is significantly lower than market – so much so as to be useless. This is surprising considering the accuracy of their new-car data.
Used Vehicle Pricing Guide Rules of Thumb:
1. No vehicle is “excellent.” Excellent vehicles are, by definition, rare. 1 in 10 rare. Maybe even 1 in 20. Therefore, there’s a 90%-95% chance your truck is average. Of course, this cuts both ways: there are very few poor trucks too.
2. Don’t go crazy with options. KBB.com and NADAGuides.com both give consumers a very long checklist of options that they can check off, but most of these options don’t actually add to the value given. Here’s what dealers typically add when appraising a trade:
- Trim package (TRD, SR5, Limited, etc.)
- Power train (which V8, which transmission)
- Misc. options like sunroofs, leather interior, lift kits, larger wheels and tires, and navigation systems
Things like tow packages, alloy wheels, after-market stereos, bluetooth, running boards…none of these items are really “adds.” The reason? Consumers come to expect these things on the average used truck.
3. Miles count – a lot. Low miles help a vehicle’s value – sometimes more than the guides add. Conversely, high miles hurt value – sometimes more than the guides deduct.
4. Pricing guides are just guides. Every vehicle is different, and very few vehicles are worth exactly the amount listed online. If you want to know what your trade-in is really worth, you need to ask a few dealers for appraisals.
Of course, you don’t have to trade your truck. If you can sell it yourself, you’ll make a lot more money.
A whole book can be written on trade-in negotiation, but when it comes to estimating a vehicle’s value and then using that in a negotiation, the best advice reads like this:
- Print out your vehicle’s value as determined by KBB.com and NADAGuides.com, adding for as many options as you can (even though many don’t actually count)
- Find ads from competing dealers that are selling cars similar to your trade. You can use these ads to demonstrate to the dealer what price they can ask for.
- Explain that you are considering selling your trade outright, but that a good trade-in offer would convince you to save time and give it to the dealer.
- Get appraisals from competing dealers, preferably in writing and not contingent upon a purchase (only that’s a tough thing to do in some markets).
- Take your time. Trades depreciate over time, but waiting a couple of weeks to look for a good deal isn’t going to hurt trade-in value too much.
Filed Under: Buying a Tundra