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Today, I had a bad experience at a dealership.  I had decided to buy a new car, and trade in my fairly new car (only 2 years old).  The dealer came back with a trade in price that was 3000 dollars below blue book price.  He showed me an "auction price".

Now, as far as I know, auction prices only apply to cars that won't sell.  Is there any reason why this price would be reasonable, or any reason why I should not be able to get KBB trade value on a trade?

I'm certain that they are trying to screw me, which seems typical of this particular dealership.  I know the market is bad, but has anyone else experienced this situation -- of getting crappy value on a trade in?

The car is in perfect condition, lots of options.  It is a 2007 Scion tC.  BTW, anyone who is interested in buying this car, drop me a note.  Its a great car, we just need a 4 door (baby on the way).  

In my experience with dealerships, and experiences of others I've talked with, they've always tried to get the best price for their dealership.  
LPG Conversions

You are not going to like hearing this, but...

Eventually, unless something such as an accident intervenes, just about every vehicle ends up up going through the auction, usually many times, prior to it finding its final resting place. Then the Lord takes our loving vehicles from use and brings them to a ranch, where it ends its glorious life at pasture hanging out with other old cars and trucks, drinking premium, idling away hours and... oh who's kidding, it's called the great junk yard.

Everyone thinks their car is special, that this is nicer and better and different. But guess what, they are all the same! It's all just rubber, steel and plastic. Sure some need a little more paint here and more elbow grease there, but so what? On average, and that is what this whole thing turns on is average, they are all the same.  The dealer is NOT trying to rip you off, he was trying to be honest with you. He was simply showing you what it would cost him to buy your car at the auction if he were to purchase it. Or more likely what he will get for it when he sells it.

He actually is doing you a favor in that he has left a few things out in your favor:
His dealership is trying to target a "kind" of customer, considering you went there, odds are, you are that kind of person. So by simple reasoning, you no longer have a need for this car, perhaps it looks to old in your driveway, maybe the miles on it make you feel like old dependable ain't all that dependable anymore, who knows, but for some reason, you do not want this vehicle any longer. So odds you are the kind of customer this dealership targets and your last car isn't. Let's face it, he probably is not going to keep your trade-in. So when he showed you what he pays at auction he actually showed you what he will get paid when you trade your car with him. Except! Now he has to pay his service department to intake and safety the car: -87, Transport to auction -30, auction fees; inspection (determines deficiencies for accurate bidding, actually allows higher bids) -148, cleaning / detail -40, block fee -90 this brings us to a grand total of MINUS $395.00. All this is if there is nothing significantly wrong with your car! if there is, then there is arbitration and repair or worse yet he maybe stuck with your gem, but then again who cares, it all will work out on average, and he can always take it out on the next guy (yes, I am absolutely being sarcastic).  And of course none of this accounts for any of her or her staffs time!

Let's say they keep and recon it, are you aware on average that more money is spent on a trade-in on refurb then on acquisition or procurement!  

A used car is as valuable as someone's willing to pay for it.  Visit a used car dealer and ask him to give you a quote for your car.  Additionally, visit another dealership and get a competing price for the car you want to buy along with a trade-in figure.  You could be right that the dealer you visited was way off base, or it could be what your car can bring in your market at this time.