This is my opinion, speaking as someone who works for a small dealership.

You're almost always going to get more for a vehicle if you sell it yourself than if you trade it in. When you trade in a vehicle, the dealer is paying you the "average trade" value for your vehicle (not the average retail price, which is what everybody always gets from Kelly or NADA), or possibly the average price that vehicles like that are doing at the dealer auctions. The dealer will either put your trade-in out on the lot and try to sell it to make some money, or he'll send it to the dealers-only auction and try to make money on it. Either way, he's looking at your potential trade-in and trying to think how he can make money on it. It's not dishonest; it's his business and he's trying to figure out how to make a profit.

So I'd recommend selling your vehicle yourself to get the most money out of it. Go on AutoTrader.com and look at the selling prices of vehicles similar to yours within 100-200 miles of your zipcode. This will give you a more accurate view of the market in your area than Kelly or NADA. For example, I looked at vehicles similar to yours here in southwest Michigan, and the prices are in the $6900 range. Price your vehicle in your area accordingly.

Similarly, look at AutoTrader and find out the average price in your area of the vehicle you want to buy. Keep that figure in mind. It also grants you leverage if the vehicle you want has been on the dealer's lot for a while. He'll be more eager to get rid of it (get it off his books) and bring in fresh inventory if he's had something for a long time.

Is the place that you're looking at one of those places that doesn't list the price of the vehicles on the lot? Perhaps instead they have stickers that advertise "AS LOW AS $199 A MONTH!" Those kinds of places don't list the price on the vehicle because it's different for each person depending on the buying situation (ie, is the person financing, and if so, how much money is being financed, and what's the person's credit like, and how big a down payment does s/he have, or is there a trade-in involved that we'll have to clean up and have inspected and put time/effort/money into selling, etc.). Stay away from those if you can, but if you can't, at least be an informed buyer and try to put yourself in the best possible situation financially before you walk in the door. Sell your trade and bring the money for a down-payment instead. Talk to your bank or credit union and arrange your own financing, if possible. Minimize the amount of work (and money) the dealership has to put into you.

I will tell you that the price they are asking for their 2004 GT2 is a fantastic one compared to the price of similar vehicles in my area. Where you're getting juked is on the price of your trade-in. Sell it yourself and use the money for a down-payment. And don't worry about the difference in the mileage of the '04. The current mileage is still waaay low for a 2004 model.