COSTS TO CONSIDER

Trade-ins

Trading in is an easy way to sell your car, but could a private sale get you a better price? Do you have the time to advertise and arrange test drives? Check out the pros and cons of trading in.

What’s a trade-in?

 

If you buy a car in a dealership, the dealer can offer you a price for your old car. This amount will be taken off the price of the new car.

A discount may be offered by the dealer to sweeten the deal.

The final price you pay is called the 'changeover price'. The dealer becomes the owner of your old car and you buy the new car at a rate that is less than the advertised price.

Tips for trading in

  • Wash your car before taking it to the dealer
  • If your car is old or in poor condition, ask the dealer if they can include it in the changeover price
  • If you have finance on your old car, have with you a letter from the lender to confirm how much is still owed on the vehicle

Trade-in or sell privately?

There are pros and cons, whichever way you decide to sell your old car. If you choose to sell privately, you may get a higher price than a dealer will pay, but you may have to wait some time before you find a buyer. This can be quite costly as you could end up with two cars on your hands for some time.

It's also very inconvenient if you need to put the money from the sale towards your new car, or if the buyer wants to take possession before your new car is ready, leaving you with no means of transport.

If you choose trading in you will know exactly where you stand financially when you agree on the trade-in price.

You won't have the hassle or expense of finding a buyer for your old car and once the deal is done, you can effectively drive off in your new car, leaving the old one behind.

Benefits

 

Fast and simple transaction

If you've already decided on a trade-in, then the transaction is usually fairly swift.

No hassles around disposal

Trading in your old car is an easy way to get rid of it and subsidise your new purchase.

In order to attract a private buyer, you may need to carry out some repairs to your old car

When you take the costs of repairs into consideration, you may find they outweigh any price benefits of a private sale, making a trade-in the better option.

No advertising costs and dealing with tyre-kickers

Selling a car privately can involve a fair investment of your personal time, waiting around for potential buyers who may not really intend to buy your car. You'll also need to pay for ads and these costs can add up if the car doesn't sell quickly.

If your car is old or in very poor shape, many dealers will accept it as a trade-in

Your vehicle may not have any commercial value but most dealers will include it in the changeover price to make the process hassle free.

Downside

 

You may get more money selling privately

The dealer needs to make a profit on the resale, so the price you're offered will probably be lower (around 10-20% less) than what you might get selling privately.

Trade-in prices

It can get confusing If the dealer starts talking about a trade-in price, plus a discount on the car you want to buy. Ask for the changeover price, i.e. how much you'll pay to leave your old car and drive away in a new one. At the end of the day, this is the figure that counts.