Yes, it is very common to part-exchange your existing vehicle in order to purchase a new one. In fact, around 3.2 million Britons will part-exchange their car, bike or van every year.
A part-exchange (PX) has many advantages, particularly because you are able to hand in your existing car to the dealer and its value can be put towards paying off the deposit of a new car or lowering the ongoing monthly fees. See no deposit car finance for more information.
You could get a much better deal if you sell your car privately and selling to a dealer is going to pay you less for your vehicle, since you are paying for the convenience.
But if you are on a PCP contract and the settlement fees or balloon payment are high, there is a strong case to trade in your existing car and get a fresh new one.
What will the dealer look at when assessing my car?
When looking to part-exchange your car, the dealer will determine its current value according to:
- Market value for that model bought second-hand
- Age of the vehicle
- Total mileage
- Any scratches, dents and dings
- Any other damage to the vehicle
Why should I part-exchange my vehicle?
- Quick turnaround – you simply hand over the keys to the dealer and can a new car immediately
- No need to sell the vehicle privately – there is no legwork involved
- It will lower the cost of your next car purchase
- You could get your next car with no deposit or lower monthly fees
Will I get more if I sell my car privately?
Typically yes, you will certainly get a better deal if you can sell your car privately to another individual or business – or maybe you want to take out an ad in a local car magazine or newspaper.
When selling it to a dealer, you are typically going to get less money for your vehicle because you are paying for the convenience and the dealer is going to make a profit on your vehicle too.
For instance, you may be able to sell your vehicle privately to an individual for £5,000, meanwhile a dealer will offer £4,000 to take it off your hands quickly, but still sell it for £5,000 on the open market.
There are a lot of car buying websites available in the UK, and many of them also charge extra for the convenience. It is important to do your homework and see if you can get a better deal elsewhere beforehand.
Don’t forget to haggle
A cash-buyer will typically have much better leverage when trying to negotiate at a dealership.
So if you are part-exchanging, you may be more tied down by the dealer since you are handing over your vehicle and it seems like your only option.
So do not forget this and be sure to haggle on the purchase of your next car in any way possible.
Ask about the ‘cost to change’
When part-exchanging, car sellers will typically focus on the price they are being offered for their old car.
However, if you want to know how much cash you will actually be parting with at the end of the deal, make sure you ask the dealer what the ‘cost to change’ price is.
Simply because a dealer has offered you a relatively high sum for your old car, does not mean that you will actually be paying less when you buy a new car.
For example, one dealer might offer you £5,000 for your old car, towards a £10,000 model.
Whereas, another dealer might offer you £3,500 against a car selling for £7,000.
On the surface, the first dealer might seem better because they are offering you more for your vehicle. But in total, the cost to change for the first option is £5,000, whereas the second option only requires you to pay £3,500 – in which case the second one is a better deal.
Before you make your final agreement with the dealer, make sure you know what the ‘cost to change’ is and don’t forget to negotiate!
At Quick Car Finance, we offer part-exchange when helping you find the best car finance deals. Simply use our online application and check your eligibility in less than 5 minutes.