1. What is Trade-In Value (TIV)?

Trade-In Value (TIV) represents the amount a dealer will offer for your current vehicle when you're purchasing a new one. It's calculated by subtracting any outstanding loan balance from the vehicle's actual cash value.

2. How Does the Calculator Work?

The calculator uses the TIV formula:

Where:

• \( TIV \) — Trade-In Value ($)
• \( ACV \) — Actual Cash Value ($)
• \( O \) — Outstanding Loan Balance ($)

Explanation: This simple calculation determines how much equity you have in your vehicle that can be applied toward a new purchase.

3. Importance of TIV Calculation

Details: Knowing your trade-in value helps you negotiate better deals, understand your vehicle's equity position, and make informed decisions when purchasing a new vehicle.

4. Using the Calculator

Tips: Enter the current market value of your vehicle (ACV) and any outstanding loan balance. Both values should be in dollars and must be non-negative numbers.

5. Frequently Asked Questions (FAQ)

Q1: What is Actual Cash Value (ACV)?
A: ACV is the current market value of your vehicle - what it would sell for in its present condition.

Q2: How is ACV determined?
A: Dealers typically use valuation guides like Kelley Blue Book or Black Book, considering make, model, year, condition, mileage, and market demand.

Q3: What if my outstanding balance is higher than ACV?
A: This results in negative equity (being "upside down" on your loan), meaning you owe more than the vehicle is worth.

Q4: Can I negotiate my trade-in value?
A: Yes, trade-in values are often negotiable. Research your vehicle's value beforehand to negotiate effectively.

Q5: Are there fees associated with trading in a vehicle?
A: Some states offer tax advantages when trading in, as you only pay sales tax on the difference between the new vehicle price and trade-in value.