Looking to part-exchange your car? In this article we will answer your questions: Is part exchanging a good choice? What do car dealers look for with part exchanges? And what documents do you need in order to part exchange?
What Is Part Exchanging?
Part exchange is a way of trading in your current car for another, usually more expensive vehicle. This is done by offsetting the value of your current car against the price of the new one.
This should then provide you with a ‘reduction’ on the amount you are paying for your new car, which will help to reduce your monthly payments if you are going to get a car on finance from that dealership. The amount of ‘discount’ will depend on what car you are trading in, the car you are looking to buy, and the profit margin of the dealership.
Is Part Exchange A Good Idea?
Part-exchanging your old car at a dealership is often a much quicker and convenient way of upgrading, but it may not be the best route to take if you are looking to make more profit on your vehicle. This is because, quite often, car dealers will make more profit on the part exchange section of the deal than they do on you trading-up to your new car.
Therefore, it’s important for anyone part-exchanging their old car to assess and research around what car you are trading in, so that you can go into a negotiation with prior knowledge of your car’s value.
The Pros and Cons Of Part Exchanging Your Car
As with most decisions, there are pros and cons to both part-exchanging and choosing to sell your car privately. Here are considerations to bear in mind:
- An easy process with little hassle, that can be completed whenever you like.
- Time saved not needing to advertise your vehicle, have viewings and find the right buyer, which can take months.
- A part exchange can reduce or eliminate the down payment you have to make on the purchase of a new car.
- You will likely get less money for your vehicle.
- You may have more limited buying options. When a dealership places a value on your trade-in and then agrees to buy the car, you have just limited your car buying options to the dealership that accepted the trade-in. Selling your car to a private buyer allows you to take your money to any dealership of your choice to purchase your new car or more affordable second-hand car.
How Do Dealerships Decide How Much To Offer For Your Part Exchange?
There are certain things that dealers will typically look out for when they are inspecting your vehicle before giving you a figure for part-exchange.
If your vehicle is a sought-after make or model, has added extras, has low mileage or has unusual factory colours, you hold a strong hand as your car is likely worth a good amount.
Other factors that will be considered are how many keys you have, any damage to the car, whether your car has an alarm, if you have a full or part service history and how much time is remaining on your car’s MOT.
It is worth taking your car to a few dealerships (and telling each dealership that you are doing this) to gauge how much they will be willing to offer, and if they have a car that you would like to buy and can afford at that garage. It is also worth doing some internet-based research on your car’s value to see what similar models are fetching on the market. It may be worth doing an online car valuation.
How To Prepare For A Part Exchange
It is worth preparing your car for a part exchange. Doing some work beforehand will be financially rewarding and will give you peace of mind before making any deals.
The first step is to conduct thorough research into your car’s worth so that you have an online valuation and a rough figure in mind that you’d like to be offered. Do ensure that you are comparing like-for-like though, as factors such as engine size, different models and specification and car age will have an effect on the value.
Furthermore, you should make your car as attractive as possible. If you look for any signs of wear and tear, you can touch up any scratches or replace any parts to ensure it looks well maintained, as well as giving it a deep clean. You may not think that this will make much difference, but in the eyes of a dealer, If the car looks presentable and doesn’t appear to require much time spent in a repair shop, it will be a more attractive car to offer an amount for as it will be easier to sell.
Lastly, you need to find all relevant documents related to your vehicle. Then, if you want to make a deal that day, you are ready.
What Documents Do You Need To Part Exchange?
If you want to part exchange your car, you need to bring the following with you to the dealership:
- The V5C
- MOT certificate
- Vehicle keys
- The car’s manual
- Service book
If you plan on financing a new car, you’ll also need the following:
- Driving licence
- A bank statement or utility bill (less than 90 days old)
What Do You Do About Insuring A New Car?
If you do part exchange your car and purchase a shiny new one, you will want to ensure that you have the right insurance throughout the process and onwards. This may range from short term ‘driveaway’ cover to a fully comprehensive policy. Remember, your vehicle will need to be taxed and insured before you drive it, and tax can no longer be transferred between owners.
Whatever type of cover you need, Be Wiser can provide the right insurance policy for you. Start your search for the perfect policy with us!