Win your car finance on us! How Part Exchange Works and What You Need to Understand
Visiting car dealers can be really exciting! But it can also be a bit intimidating. Here are plenty of tips and tricks to getting the best price for your car.
When buying a car many drivers choose to part-exchange their car for a new one, taking the old car’s value off the cost of the new model. Meaning no messing about selling your car privately or taking it round dealers to trade it in for the best price. Although part exchange is a straightforward process on the face of it, there are plenty of tips and tricks to getting the best price.
Choose the right dealer for your car
What the dealer is planning to do with your part exchange model depends on what that car is and what condition it’s in. If your existing car is a 10-year old BMW 5 Series and you’re downsizing to a new Ford Fiesta, your car is probably won’t be of much interest to the dealer. It’s unlikely to have a clientele that’ll want it.
Your dealer may sell your car on to a local independent trader with the right kind of customers, or simply send it to auction. If your car is a bit newer and the dealer knows that they’re popular with the kind of people who come through the showroom, it will keep it and sell it to one of its customers.
Top tip: If you’re buying a used car, choose a dealer that actually wants your existing car. If
they already know of a buyer looking for a car like yours, your luck is in.
Keep the two transactions separate
What the dealer is most interested in is selling you a new car. This is where there’s a profit to be made. They will then tie your existing car’s value to the price you’ll pay for the car you’re buying. Your job is to separate them. This enables you to get the best price for your car and the best price for the car you’re buying.
Top tip: Don’t be so fixed on getting a great price for your car. Then you could pay over the odds for the
motor you’re buying, and vice versa.
Know the true value of your cars
Unless you’re careful, negotiating over a part exchange deal will be like playing cards against a professional while you’re blindfolded. The most important thing is to know the value of the car you’re selling and that of the one you’re buying.
Remember it’s trade-in prices you’re after (the dealer has to factor a profit margin in) rather than private sale prices which will appear higher. If you’re buying a new car, you’ll know what the sticker price is. Research via internet car sales sites should show you the likely discount a dealer will accept. Find out how to work out what your existing car is worth here.
Top tip: It is worthwhile going to more than one dealer if you can. That way you can be sure you’re
getting the best possible price.
Maximise the value of your car
The most important thing when you’re part-exchanging a car is to maximise its value. The dealer you’re selling it to can only value your car on the condition it’s currently in. If it’s filthy, they won’t be able to see any scratches, dings and dents in the bodywork and will value it assuming it needs attention.
That will cost you money. On the other hand, if you take it in shining like new, it’ll be easy for the dealer to envisage it on a forecourt and driving off in the hands of its new owner. They’ll be able to value it accordingly. Click here to check out an article listing 6 ways to increase the trade in value of your car.
Top tip: If your car is damaged, get quotes for repairing the damage. That way you’ll know if any
deductions a potential purchasing dealer suggests are reasonable.
The negotiation
What you don’t want to happen is for the dealer to say: “I’ll take your car off your hands for £2000 and take that off the price of the new car.” Your job is to get a fair price for your existing car (be realistic here). So ideally you should nail the price they’re going to give you for that, then proceed to talk about the motor you want to buy.
If you know what your car is worth and what you should be paying for the motor you want to buy, the dealer will respect you. That, in turn, will give you a stronger hand when negotiating. And if you can’t get the price that you want, visit another dealership
Foam or wax? Make sure you know the difference for when you receive your new car! Check the article out to find out more.
