It's really a play on numbers. A 2005 RSX Type-S is not worth $10k on trade in. A 2006 LGT is not worth $17k. However, the dealer pumped up your trade value and just pumped up his asking price to give you the appearance that you're getting $10k for your trade. In reality, once the deal is done and the real figures are put in the computer, the dealer may type in $7,000 for your trade-in, and $14,000 for his car's sale price. In the end it doesn't matter, because the cash difference is the same $7,000.
Want to avoid the confusion and make this simpler for you? Go in there, tell the dealer you want to be at a $5k cash difference out the door (that includes taxes, title, and license). He'll probably think 'NO WAY', but you have your starting baseline just like they gave you theirs, and you negotiate. Just negotiate in terms of cash difference out the door, because that is a final number for you. No confusion. No way to spin the numbers. Hey, you can fight from that $5k figure and try to make it $6k or $7k cash difference out the door. You let the dealer go with this whole your car is worth 'x', my car 'y', then add this fee, that fee, tax, title, license, etc, and you let them have control of the deal. You want to be in control, so dumb it down and put the pants on them.