A part exchange can be a highly effective method of reducing the cost of buying a new car. Some motorists, however, may not be aware exactly how a part exchange works and whether it’s the best move for them.
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.
What are the pros of part exchanging?
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 could ultimately decide not to take the car after coming to see it. This is a common occurrence especially when people are searching for cars to buy online.
Part exchange can be particularly useful if you are downsizing to a smaller car (or engine) because this likely means a larger chunk of the cost of a new car will be taken out by your older model.
What are the cons of part exchanging?
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 can mean you get a lower price than if you sold the car individually. It also means two sets of negotiation are needed – one for the part-exchanged car and one for the new car.
The best way to avoid potential pitfalls in this regard is to visit a reputable dealership network, such as Perrys, and go 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 internet can be a very useful tool for this, since it’s 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 equipped with this information, it allows the seller and the salesperson to reach an agreement much quicker and should ensure a good deal for the seller.
Of course, you can always walk away if the deal is not satisfactory. Always be prepared to explore other avenues for selling your car if the part exchange deals on offer do not suit you.
Preparing your car for part exchange
When intending to part exchange a car, 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 certificates will be needed just as they would when selling the car privately.
To help you get the best possible part exchange price give the car a wash. While dealerships will part exchange a dirty car, you should make it as an attractive proposition as possible 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 instance, scuffs and bumps on the bodywork can be fixed relatively easily. Larger damage to the bodywork on the other hand 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 a valid MoT certificate.
Finally, it’s better to avoid accepting any offers from a dealership if they haven’t even seen the car. In this scenario the chances are that this is a particularly low price being offered.
Can I part exchange a car online?
Part exchanging is an area in the car buying industry which has grown a lot in the last few years and doing it online is possible. However, like all things related to online car buying and selling, 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 in advance. It is also important to be wary that some companies might change their valuation when the cars are actually picked up.