Did you get the Kelly Blue Book value on your trade-in?

Skip the dealers entirely and sell it privately - Both parties will come out better off for it. The only time you'll get anywhere near a fair price from a dealer on selling a used car happens when you trade in a fairly old and nearly-worthless car for a much higher priced new car. "Sure, we'll give you the full $1500 KBB price for your clunker, as a down payment on that $75k Audi S6!"

Car dealers, generally, will try to rip you off, while acting like you are the one ripping them off. There are exceptions, but this is what I have found. When you go to the dealership, ask for $1500 more than you want to get, and offer to pay $3000 less than the "fair market value" for the new car on top of that. When they act kind of shocked and laugh at you for asking so much, mirror their attitude and walk away. They'll probably lower their offer. Come around gradually and take a lower offer. Then, after everything seems finalized and they're going through the paperwork, they will try to sell you overpriced, unnecessary extended warranties. Add up the amount you would pay if you bought all of their extras, multiply by 40%, and subtract this amount from your offer as only fair because they were trying to rip you off with the warranty. Start to walk again (and don't buy their warranties/extras!), and they'll probably lower their offer to something reasonable. If nothing else, you'll become a better negotiator. Also, if you are buying a used car, get an inspection from an independent mechanic, and walk if they concealed any damage to the car.

I think many of these responses are missing the fact that Blue Book trade-in values are already much lower than private party values, and lower still than dealer retail figures, to account for dealer profit. That said, we were not offered anything like blue-book trade-in value when we bought our last car. I chalk that up to the fact that our old car had 90K+ miles on it and was less pretty than anything the dealer had on the lot, meaning they wouldn't even be likely to sell it at retail; they'd have just sold if off wholesale to get it out of sight. We elected to sell it ourselves, and got the Edmunds private party value within a week. (KBB prices are generally high in all categories, IMO). I highly recommend http://www.amazon.com/exec/obidos/ASIN/0143038885/metafilter-20/ref=nosim/. Saved us a bundle.

Why would a dealer offer you full value on a car? They're trying to make a profit. You'll be much better off if you simplify the transaction by not mentioning a trade-in. The more complicated te transaction, the more advantage the party with more expertise

Also, I want to pay the "Fair Market Value" for the new car, as indicated on the Edmunds site. No, you actually don't. You want to pay the least amount of money on your new car given that you are giving up your old car. The value of the trade-in is just a trick that the dealer can play to divert your attention from the actual value of the entire transaction. Say they offer $3,000 for your car. You then reject their offer, and they come back, after extensive and theatrical dialogue with their management, and offer $6,500, saying that's the best they can do. You decide to take it, because it's "close enough" to the market value. They then pad the car price by $4,000, and come out $500 ahead. You think you've made a deal. The best negotiation tool for dealing with buying a new car is realizing that the price of any one subcomponent is irrelevent and that the only detail that matters is the actual cost of the new car to you.

I bought a new car last year, although I used the Consumer Reports car prices, not Kelly. I highly recommend springing for the Consumer Reports subscription for their service. We got exactly the Consumer Reports trade-in value for our old car (which looks to be slightly more conservative than the Kelly value, by about $500). Here were our circumstances: 1. Trade-in car was 10 years old, about 98.5K miles, from same make as the new one, though different model. We were the only owners, had all maintenance records, and had been pretty scrupulous about regular maintenance on the car. We also gave it a very thorough cleaning before having it assessed for trade-in value. 2. Price for new car was negotiated online (based off the Consumer Reports recommended prices) and agreed upon before even discussing a trade-in. 3. We secured financing from local credit union in advance of negotiation, so as far as the dealer was concerned, we were basically paying cash. 4. Brought the trade-in to be assessed once we were ready to do the final paperwork on the new car purchase. We were offered the exact amount that we wanted, based on the Consumer Reports trade-in value, and so we walked away happy. Kelly and Consumer Reports both showed that we could have gotten a higher value for a private party sale, but for us personally the work involved in doing that was not worth the extra money. We did, however, have a range for the trade-in value that were were prepared to accept, and were willing to walk away if they offered too low.

Nicely done.

On the one hand, expecting to get the full KBB value is unrealistic; on the other hand, the dealer offering you half that KBB value? Run. One way to check actual values for your area: check the used car ads for a while, and figure 80% of what those people are asking is what you can reasonably expect to get. Also, check into donating the car to charity: you can usually use the full KBB value of your donation as a tax deduction.

Thanks everyone for your input. I learned something useful from just about every answer. I marked as "best answer" those who gave their own KBB (or equivalent) experience, since that was the original question. Just came back from the dealer and bought the car for the Edmunds "True Market Value" price (which was lower than dealer invoice) and got the full KBB value for my trade. It's weird, but I feel like any price acceptable to the dealer must somehow mean it's not as good a deal as it seems. Some additional details of the transaction for future googlers: 1) Paid cash for the car 2) Trading a 9-year old car in good condition with only 38,200 miles. Almost new tires. 3) Old car was purchased from this same dealer, if that matters. 4) The KBB price was actually $450 lower than the NADA price, about the same as the "clean" Black Book price from cudlautosmart.com, and $2000 higher than the Edmunds trade-in price. 5) New car is a different model than the old one, but not one that was more expensive. I think the new one isn't very popular or in much demand. 6) I had the VIN of the car I wanted, as I picked it from their inventory as listed on the web. 7) I began by telling them what I wanted to pay for the car and what I wanted for the trade. Was out of there in less than 20 minutes. 8) I did not see any special incentives to the dealers from the manufacturer, or anything like that from my researches.