Before we go any further I would like to mention I have previously published another article that deals with the same issue from a different perspective.
This article will focus more on the business end of the trade in process rather than the mechanical.
One major misconception from customers is they assume a car dealership is obligated to purchase a vehicle from any one who is willing to sell.
Remember a car dealership is in the business of making profit not to help anyone out of the goodness of their heart to sell a vehicle.
They can purchase a vehicle from many different sources such as private and public auctions, lease returns from the manufacturer, or their wholesalers' network to get their vehicles.
In another word if the dealership can purchase a 2008 Honda Civic for $10,000 why would they want to pay $11,000 for yours? In essence a dealership operates much like a pawn shop for cars, when you need to liquidate your asset into cash the dealership will be able to offer you certified funds for your vehicle.
The catch is the amount is about 50% compare to the retail world, so next time you are trying to trade in your vehicle prepare yourself mentally and don't take offence to their offer.
One key concept for optimize your trade in value if it's under $10,000 is to trade it to other manufacturers.
For example your 2008 Honda Civic would be worth a little more if you trade it to a Mazda dealership.
There are two major advantages to this trade, for one the Mazda dealer would like to have an off make vehicle in their inventory to spark public interest.
For another the Mazda's used car manager will not know the resell value as intimate as the Honda dealership, therefore they maybe paying a slightly higher amount.
However this rule doesn't apply to premium vehicles or luxury brands.
As matter of fact the rule is in reverse when you are dealing with a BMW, Mercedes as your trade in all other manufacturers are afraid to step up to the money due to one simple reason.
They don't know these cars as well as their own therefore they are afraid to make a $10,000 mistake that will cost them in the long run.
So if you are looking to trade in a luxury brand it is better to deal with the original manufacturer rather than off makes.