The dealerships offer does not surprise me. My brother has worked at a dealership for almost 15 years (NOT in sales, he is the service manager), and i have gotten to know the new and used car mgrs petty well.
I have purchased many used cars there at 'killer' prices. It is incredible how little they will give for a trade and how much they will sell it for. Dealers make a lot more profit on used Vs new. A good example is the deal i made with them last year for my Subaru Forester.
I owned a 2001 PT Cruiser 5 speed. Bought it new in December of 2000. It had 60K on it, was still under an extended warranty, and was in superb condition. I tried to sell the thing for almost 4 months...had a few nibbles, but nothing serious (the Craig's list people were the worst...story for another day). The car was paid for and i didn't HAVE to sell it. We had bought a Scion xB to replace it, but i was not willing to even attempt to trade it in at a Toyota dealer.
Anyway, my wife got a promotion at the bank she works at, and her new position has her traveling to various banks in the district, which involved a lot more driving than when she worked out of the local branch. I wanted her to have an AWD car available for winter snow driving. A few weeks later the Forester came in on trade at the dealership. He gave them $5,000 trade in allowance for a 2000 Subaru Forester with 42,000 miles on it!! Edmunds book trade in at that time was over $7K. I traded my PT almost even up (i kicked in $400 bucks) for the Subie.
Now, when i was selling the PT, i was willing to take $6,500 for it, which included the balance of the extended warranty. I couldn't sell it. But the dealership sold it for 10 grand!!!
That's the kind of profit that is in used cars.
To the original poster...your car, depending on miles, should sell for 18-21K...sell it yourself, and you will get that much for it. That is how much that dealer would sell it for.