When looking to purchase new and used vehicles, one of the most important considerations is what to do with your existing vehicle, and how to obtain the best deal for your purchase.
Is it better to sell your current model and then attempt to negotiate a stronger discount or deal, or is a part exchange the best approach?
Some dealers may offer a good price for your old run around, while others may be more tempted to improve your deal if you’re paying with cash and without using a vehicle as a part exchange.
In the first instance it’s important that you accurately estimate the worth of your existing vehicle. As a rule, a private sale can offer a higher return, but that obviously requires you to market and sell the vehicle yourself.
The advantage of a part exchange is that you will be offered a fixed price which will leave you with no other hassles of marketing or waiting on a sale.
On the flip side, a part exchange may be at a much lower price (usually a specific trade price), so you will need to decide whether the reduced price for a guaranteed sale is worth more to you than the hassle of selling your vehicle privately.
Factors that can come into play when setting a sale price will not only include age and mileage but any wear and tear on your vehicle, lack of sales or servicing history from a garage in the motor trade, and any mechanical issues identified – all of these can have a significant effect on what you might expect to receive for your car.
It is also worth looking out for special promotions or situations in which part exchanging your car could actually net you a better return than a sale – for example in recent years some manufacturers have offered good incentives to trade in a high-emitting diesel or much older vehicle, sometimes at values well above what you might expect to get privately or if you scrapped your car directly.
Of course, many of these deals provide value to trade in against a brand new model, which can be priced much higher in the first place! Would a cash buyer be able to negotiate a better discount? If so, then a part exchange may not be worth it.
You’ll also need to factor in additional costs such as private or motor trade insurance, servicing and so on, some of which can be offered as discounts or part of an incentive-based package deal by a seller.
Interestingly, if you do wish to trade in your old car, the region of the country and time of year can also play a significant role in how much value you might obtain; you’re likely to be offered a higher price for a convertible vehicle earlier in the year, while utility vehicles and sturdier 4x4s can increase their worth in winter months.
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Southern car buyers can also sometimes receive higher trade-in values than their counterparts in the north, though if you’re buying a used car this could also be more expensive there too.
Perhaps the best advice is to do plenty of research ahead of visiting a dealership; if you’re intending to trade in your car, make sure you know roughly the price range you’d expect to be offered, and then consider whether that makes it worth your while in accepting a valuation.
Remember that a dealership will often need to service or refurbish your car as well as marketing it for a future resale, so factor those considerations in when deciding if an offer is valuable to you, or whether it would be better to sell the car outside your new vehicle deal.
Whatever the result, taking a potential new vehicle for a test drive on motor trade plates is also well advised. Buying a new or second-hand vehicle is an exciting experience, but with research, careful budgeting and a plan the process should go as smoothly as possible.