Should you part exchange your old car when buying a new one? What are the benefits of part exchange?
The scrappage scheme in the UK is long gone. The government incentive offered £2,000 towards older cars when a new model was bought to replace it, and UK customers headed to dealerships in their droves.
It is a different story now, however. There are a huge number of ways to sell your old car, including online at sites such as eBay, more traditional classified adverts or as a part exchange.
Below we take a look at the pros and cons of part exchange and what to do if you decide to exchange your car for a newer model at the dealership.
Should I part-exchange my car?
There are benefits to part-exchanging your used car for a new. The obvious one is that the value of your old car will be taken off the price of the new one there and then.
This means in one visit to the dealership, you can effectively swap cars (for a price). It is the easiest option to replace one car with another.
It is far less hassle than taking out a classified and dealing with potential buyers who end up not taking the car after coming to see it – a common occurrence on websites such as eBay.
Part-exchange can be particularly useful if you are downsizing to a smaller car (or engine) because this means a larger chunk of the cost of a new car will be taken out by your older model.
What are the disadvantages of part-exchanging my car?
Part exchange may be the easiest option, but this can reflected in the price you are offered for the car.
Using part exchange at a dealership to fund a new car purchase often means you get a lower price than if you sold the car individually, and it means two sets of negotiation are needed – one for the part-ex car and one for the new car.
Dealers could offer a good deal on one but get back some of the profit with a higher-than-usual offer for the other.
The trick to avoid this is to first visit a reputable dealer – such as Perrys - and secondly go armed with as much information as possible.
What do I need to know to part exchange my car?
First of all, the most important thing to know is the value of the car you are currently driving.
The best tool here is the internet, where you can search for similar cars to yours in order to gauge the value of the car.
Always remember to take into account mileage, service history and the condition of the car – the same advice given to anybody about to sell their car.
By going into the dealership armed with this information, it allows the seller and the salesperson to reach an agreement much quicker and ensures the seller does not leave out of pocket at the end of the deal.
Of course, the final piece of advice should always be to walk away if the deal is not satisfactory. Always be prepared to explore other avenues for selling your car if the deal does not suit you.
Preparing your car for part-exchange
You should have all the documents and paperwork needed in one place – remember if the car has a full service history it will increase the value of the car.
Documents such as the V5C and MoT certificate will be needed just as they would when selling the car privately.
To get the best possible part-ex price give the car a wash – dealerships will part-ex a dirty car, but you should make it the most attractive proposition it could possibly be to improve its chances of being valued at a higher price.
It may also be cost effective to fix any damage to the car, but this depends on whether you believe the extra value added will be larger than the cost to fix it.
For example, scuffs and bumps on the bodywork can be fixed relatively easily, whereas larger damage to the bodywork could cost more to fix than would be taken off the value at the dealership.
Finally, make sure you take all the keys along with you to hand over if a sufficient part exchange deal takes place.
How to part exchange your car
When negotiating with the salesperson about a part exchange price, always have a price in mind and stick to it.
Obviously, any repair work needed or damage to the car will reduce the price, but this is where prior research will be useful.
Other things that will reduce the price include an incomplete service history and the lack of an MoT. Most dealerships will check the car mechanically before agreeing to a part exchange, but will drastically reduce the amount offered if the car does not have an MoT.
Finally, never accept an offer for a car the dealership has not seen. The chances are this is a particularly low price for the car.
Can I part exchange a car online?
This is a growing area in the car buying industry and it is possible. However, like all things online, it is not without its pitfalls.
Websites will generally offer to buy a car at a much lower price than a dealership because they do not actually see the car first, while it is also important to be wary of companies who change the price when the cars are actually picked up.