I can get a new 8X10 in Jamestown, ND for $7K. Now, I asked what they would give me in trade (Mine is a 2009- PJ brand- Rieceiver Hitch- 14Klbs Gross- 10Klbs Net) They wouldn't even trade it in because it is such a rust bucket. The sales man told me to list it online for $4k and see what happens. Never did that. Decided to drive the wheels off it.
I also checked into having it sandblasted and repainted. That estimate came to $2500. No thanks.
I am GUESSING I could probably get $2800 for it. So I would say $3K for a 5X10 is too high. (Are you sure it's 5X10?) That seems like a weird size. Put a tape to it, I bet it is 8X10.
So, I would say, and this is just my opinion, if it is indeed 8X10, and the dump works and the tires are ok, (a new tire is about $120) and the battery and electric brakes are ok, I would give him $2600 for it, and $200 for letting you use it for free for the last 2 years.
Opinion: $2800
EDIT: I see you are in MN. Sparks Trailers is out of Battle Lake, MN. Give them a call and see what they think it is worth. Couldn't hurt.
EDIT 2: My trailer and the new one I looked at is 8X14 not 8X10. So yeah, 5X10 trailer is legit.
Sorry for the mis info. Been a long day and I have had several beers. $3000 too much.
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