[RoundTower]

Diablo,
Assuming the car wasn't driven or neglected, I don't think it's possible for any used car to drop 25% in resale value in 7 months. So why insist on checking the actual numbers in the blue book?

OP,
I think it's possible the car dropped $1.5k in value, and by offering to "split the difference" the guy was actually trying to get you to pay the whole lot. Or that you got an inflated trade-in price, but got a correspondingly worse deal on the car you bought.

Either way, I don't think you owe them anything. They knew when they took the car that there might be a delay in getting the title, but they took that risk in return for the reward of getting an immediate sale. Compensating them for this risk is like giving an umbrella salesman $10 on a sunny day because he's unlucky you didn't need an umbrella that day.