Couple of points on the thread that seem to be flashing caution in my cynical mind.
In fact, the dealership has been calling us recently because they need more used cars on their lot, apparently.
Bottom line.....They would tell you that they are holding your Grandmother hostage to get you in the door. I have done business with several great new car dealerships, but I always assume that I am being lied to, and act accordingly. In this case, they are being honest on several fronts. First, in some markets the supply of wholesale used cars is tight. They send buyers and drivers to weekly auctions, end up paying a premium for unknown stock, and then have to pay an employee to drive it back, then repair and recondition it. If you show up with a clean piece, and they know the history, they spend less for it, and have less risk involved. So they need clean, documented stock for a good price, and you are their source. Selling you a new car is a bonus, since there is a modest amount to be made doing so, (if you are smart enough to not allow them to fleece you). The clean, low mileage unit you are trading in is the real prize, since it will make them far more than the new car transaction.
Anyway, a few months after that, we sold it to a used car dealer for $18,500.
This may of been a great deal, or not. Depending on many factors, especially if it was traded for the Prius? Trade-ins are a great way to really screw the buyer. I never get involved with one until I have several important pieces of info. in hand. First, the real value of my trade-in. Now this is not something you are NOT going to find online, and often has no relationship to the offer from your dealer. A dealer will have their buyer inspect your trade in, then either grab a weekly "black book" or other value guide that you have zero access to, or go to a subscription website that gives him the latest results of local and regional auction sales. They then hand the sales manager a figure that you will never see. For example, you get an offer of $20K for your car, yet the buyer told the sales manager that he will buy the car from the sales department for $17.8K. The $2.2K split becomes a tool to get you to bite. You are looking at a new car with $3K in mark-up and they tell you that they can offer you $20K for your car, against the $30K sticker on the new one you want. If you bite, they got your car for wholesale, and made $800 on the new one, plus other money coming later from the manufacturer. The first step in avoiding this is the find out the real value of your car. In my case, there is a local, high volume used car dealership that will give you a serious offer, and show you how they arrived at that figure. In other cases taking it to a few dealers and going with, "I'm going to sell this to the highest offer, what would you give me for it?" would give you some valuable info. I have even stopped at a small used car shop and said to the owner, "I'll buy you lunch if you give me the straight up on what this car is worth". The second step is to find out what the replacement vehicle is worth. This can be tricky, but generally I would be hesitant to buy off the lot anyway. IMHE, when looking for a 'stashe grade ride, a dealer is going to be at least 30-40% higher than the same Honda, Corolla, Focus, etc..... will be from a Craigslist buy. That said, if your jonesing for a newer, nicer piece that is typically going to be a dealer item, I would recommend getting aggressive at several dealers who have similar cars on the lot. Start low, and with the understanding that it's cash, no trade, and see how low they will go.
making it about $2000 less than Kelly Blue Book
The best use for KBB is to print it out and use it to light the fireplace. Seriously, anytime a dealer runs adds with bold, "$2000 UNDER KBB PRICE" they self identify as shit-bags. I got to know the buyer from a local, decent used car dealer, who tries to buy newer units off the street. He just shakes his head at how often sellers storm off in a huff, after being told the truth. Typically the seller shows up with a KBB figure of say, $10K, and that's what they expect. My guy will ask how they determined that, then try to explain that the value is nowhere near that. In some cases he has walked the seller to a matching vehicle on the lot, with less mileage, in better condition, and a retail price less that the $10K that KBB claims that a seller should expect. He has even gone so far as to pull the paperwork, including the check paid to the seller, and ask, How can I give you $10K for this car, when I just bought a nicer one for $3K less, and I can head to the auction and get another 1/2 dozen more for that price. Even after all that, folks will still storm off, confident that they are not going to allow themselves to be screwed, since KBB is right.
Finally, it doesn't really matter how you end up doing the deal, if you find what you want, and have a clear understanding of the true value of both units. If you are selling a car that's worth $15K and buying another worth $10K, there is a $5K split. It doesn't matter if you are paying $14K for the new one and offering you $19K for the old one, there still is a $5K split. If you are walking away, debt free, bank check for $5K in hand, with zero sales tax paid, the numbers on the paper don't mean squat, as long as you protected the split, and didn't give anything away. The only way left to get screwed at that point is in Insane "dealer fees". This is very regional, and I have done business in areas where $500-700 in fees is standard policy. These are nothing but additional profit, and are pure B.S. Never pay them, do your best deal, and THEN back the fee out of the deal. Many dealerships have a policy that a contract cannot be written without the fee included, and it is often preprinted on the sales documents. Once again, don't stress, just tell them that you are happy to sign once the price of the car is lowered by the dealer fee.