Nothing ever comes easy when it’s time to get a new car. But as far as deciding whether you’re going to exchange your old vehicle or sell it privately, budget and convenience actually make a whole lot of difference. Each one has its merits and demerits that can help decide what is better for you based on your preferences.
Advantages of Part Exchanging Your Car
Part exchanging offers unmatched convenience. The process is quicker and easier: you hand over your car and the paperwork to the dealership, change your insurance address, and then the dealer will do everything for you. It is best if you are busy or dislike private sales.
The part exchange price is given to you by the dealer; however, you can check the valuation of the vehicle beforehand by carrying out a car history check. This report will provide a five-band valuation, including trade, part-exchange prices, and private prices.
Dealerships often let you keep your current car until your new one is ready, which adds flexibility. If you are trading down to a less expensive vehicle, the trade-in value can significantly reduce the cost of your new car.
Disadvantages of Part Exchanging Your Car
The major drawback is financial. Dealerships have to generate a profit and therefore their offers on trading are generally less than that obtained from a private sale. Other factors that may affect the value offered include dealer stock levels and even the time of the month.
Negotiation is also even more complex for it requires discussions about the cost of the new car and the value of your car for trading it. It might be scary especially when you’re not so bold with negotiation talk.
Maximising Value within the Part Exchange
Research private listings and auction sites like eBay to fetch a good price for your car. Carry a printed copy of such examples to back your negotiating. Know that a dealership will offer lower prices than a private sale for he would have to cover resale costs.
Never accept the initial price quote without bargaining, in case you think your car is worth more. Dealerships throw in lowball offers in the expectation that the customer will start negotiating.
Part Swapping a Car on Finance
If your car is under a Personal Contract Purchase (PCP) or hire purchase agreement, the dealer will deal with settling off the outstanding finance. Your paperwork will outline the settlement figure and any remaining equity can go towards your new car. This will be much simpler than paying off the finance yourself before selling privately.
Advantages of selling your car privately, often you get more money than you would, including dealership profits. This is especially helpful when your car has unique features or modifications that appeal to certain buyers.
Private sales are also the best for rare or classic cars, where the enthusiasts are willing to pay a premium that dealerships may not recognise.
Disadvantages to Selling Your Vehicle Privately
Selling a privately owned vehicle usually requires more hours of time input. A suitable buyer might never be found due to weeks and months of wasted time, as the vehicle quickly depreciates when waiting is longer.
Dealing with time wasters or making lowball offers is another common problem. Few cases involve some form of fraud, especially over the Internet. Always insist that the money be transferred directly to a bank before exchanging the car keys.
Maximising Value in a Private Sale
To guarantee a successful private sale, analyse comparable listings to sell your car competitively. Being priced slightly under similar models would attract quick buyers, but one should not overprice it below the part-exchange offers made on it.
Avoiding Scams While this is rare, one must always be cautious. Avoid those willing to pay cash in large sums as this could be a means of money laundering. Always confirm that the money is safe in your bank before transferring ownership.
Which Option Is Best for You?
It depends on your priority. If getting it over with quickly and easily is most important to you, then part exchange is your route. If you want to maximise financial return and have the time for management, private sale likely becomes the better route.
In the end, both methods have their pros and cons. The convenience of part exchanging versus the higher profits that could be achieved by selling privately will help you make the best decision when it is time to upgrade your vehicle.