Buying a car, new or used, can be expensive. But if you part exchange your old vehicle, you should be able to get money knocked off the price. Sounds great, right? But is part exchanging your old car always the best option? This will largely depend on what you’re hoping to get out of the deal. Do you want ease and convenience? Or is the selling price the most important factor? We’ve explored this topic in more detail below!
What is Part Exchange?
The idea of a part exchange is to make selling your old vehicle, and buying a new one, as stress free as possible. Rather than having to sell your old car before you can afford to buy a new one, you can simply sell the old vehicle to the dealer you’re buying from. This saves you the hassle of finding a private buyer, and should earn you more money than selling the car for scrap.
As an example, say you were looking to buy a car for £12,000. The dealer might offer you £4,000 in part exchange for your old vehicle, which would be subtracted from the price of your new vehicle. This means you’d essentially be paying £8,000 for the new car.
If done right, a part exchange benefits everyone involved. You can easily get rid of your old vehicle, and purchase a new set of wheels, while the dealer will have made a sale, and will be able to add a vehicle to their inventory that they can sell for a small profit.
How Is the Value of Your Old Car Calculated?
There are a whole host of factors that go into determining how much a vehicle is worth. The obvious ones include age and condition of the car, the mileage, as well as the vehicle’s make and model. Any additional features you’ve had installed, as well as the colour of the car, can make a difference too.
Industry experts have compiled vehicle valuation guides which many dealers will use when considering how much to offer for your car. Others may use their own experience and expertise within the industry to calculate a figure.
What Can You Do to Increase the Car’s Value?
As mentioned above, things like the condition of the vehicle are important when it comes to evaluating its worth. So a big dent or scratch will probably lower the price somewhat. In some cases, it might be in your best interest to pay for repairs, but only if you’re confident that you’ll make a profit after the vehicle has been sold.
Another thing you must do before selling your car, whether it’s a part exchange or to a private buyer, is valet it! A good clean, inside and out, can do wonders for the aesthetics of a vehicle, and could therefore fetch you a higher price.
What Happens to Your Old Car?
When you part exchange your old vehicle, the dealer will take it off your hands. They may do some work on it, to ensure it’s in good condition, and will then try to sell the car. The markup with part exchanged cars isn’t always massive, but the dealer should nonetheless sell it at a profit.
One of the great things about a part exchange is that you’ll never be stuck without a car. When you hand over the keys to your old vehicle, you’ll be getting the keys to your new set of wheels.
Can You Part Exchange With Outstanding Finance?
There’s no simple answer to this question – it will depend on both the lender and the dealer. Some will let you sell a car even if you’ve not fully paid off the vehicle finance, but it will usually depend on how much is still outstanding. Generally, you’ll need to have paid more than the vehicle is estimated to be worth. So if you had an outstanding loan of £4,000, but your vehicle was worth £6,000, there’s a good chance that the dealer would accept it as a part exchange.
If you do wish to part exchange your financed vehicle, you’ll need to get in touch with the lender and ask for a settlement. The lender should also send out a settlement letter to the dealer, so that they can be certain of the amount before finalising your agreement.
Is Part Exchange the Best Option?
Part exchanging won’t be the right choice for everyone. Although it’s usually the most convenient and quick way to get rid of your old vehicle and purchase a new one, part exchange isn’t always the best option economically.
Car dealers are aiming to make a profit when they buy your vehicle, so they may pay the highest possible price. You may be able to get more money if you sell the car yourself, though that will almost certainly mean more work on your part.
Don’t Forget You’re In Charge
If you start down the process of a part exchange, but then later decide that it’s not the right option for you, you can back out. You’re in control of both the car buying and car selling process! Until you’ve signed an agreement, it’s not too late to take your business elsewhere. So if you don’t believe you’re being offered a fair price when part exchanging your vehicle, just walk away. You will undoubtedly find a buyer who is willing to pay what the car is worth, especially if you’ve done your research and know what similar models are selling for.
One of the best things you can do is speak to a lot of different dealers, to see what they’d offer you in terms of a part exchange. And let them know that you plan to speak to other dealers too – that way, if they’re really interested in purchasing your car, they’ll offer you a good price. The dealer won’t want you to find another buyer. It’s also good to be upfront about the research you’ve done, showing that you have a strong idea of how much your vehicle is worth.
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