Trade-in appraisals lowball by $2k-$5k because buyers negotiate purchase and trade together

Dealers deliberately undervalue trade-ins by $2,000-$5,000 below fair market value, using the four-square negotiation method to bundle the trade-in, purchase price, down payment, and monthly payment into a single opaque negotiation. This matters because the average consumer cannot mentally arbitrage four variables simultaneously, so the dealer shifts margin from the visible purchase discount to the invisible trade-in deficit. The practice persists structurally because there is no legal requirement to offer fair market value on a trade, the appraisal process is entirely subjective with no standardized methodology, and most buyers lack the time or knowledge to get competing offers from CarMax or Carvana before sitting at the dealer's desk.