Thinking about part exchange? We explain the ins and outs in this “how to” guide to help you get the highest value and make an informed decision about using this route to sell your car.
Part exchanging, as opposed to getting cash for your car, is a way of ‘trading up’ or ‘trading in’ your car to another, usually more expensive vehicle, by offsetting the value of the original car against the price of the new one.
Once the value of the old car has been agreed between the seller and car dealer – the difference is then paid either by taking out and paying off the finance on the original vehicle, or simply by transferring the money.
Currently, a part exchange (also known as a ‘PX’) is a popular choice in Britain, with recent research showing that around 3.2 million buyers now prefer to use this service each year, rather than selling privately.
One of many ways of selling a car, for many, a part exchange is seen as the easy option, since it means that they can forego selling their old car, and it feels like a quick, hassle-free option.
Part exchange explained:
Is part exchange always a good choice?
Whilst it’s true that part-exchanging your old car at a dealership is often perceived as the quick and convenient way of upgrading – it is not necessarily always the best route to take.
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 really assess what they are trading in – and to think about who’s getting the better end of the deal: them or the dealer.
Car value and the finances of part exchange
If you have the money to buy a new car without having to resort to PX, it is generally a good idea to do so. A part exchange may well be the easy option, but rarely is it the most cost-effective.
Why? Well, firstly, if you sell your old car privately, you are likely to get a better price. Secondly, as a cash buyer you will haggle more effectively during your negotiations at the dealership.
A dealer will work on the assumption that they know a lot more about cars and the automotive industry than you do – and, in most cases, they are right.
Consequently, it’s much less easy for them to bamboozle cash buyers than sellers trading old cars. So, buying outright helps to level the playing field.
Dealers are also aware that many buyers will happily part-exchange their old car if it means that they don’t have to participate in any of the dull ‘legwork’ that takes place when they sell privately (i.e. getting the cars listed, arranging viewings, test drives, etc.)
However, it is not always quite so straightforward. PX can very quickly become quite complicated – particularly if you are attempting to buy your new car on finance.
When you part exchange your old car, you are not just negotiating on your old car’s value, you are also working out at the same time, what you’re paying for the new model.
This doesn’t seem too hard, but if you’re buying the new car on finance, the dealer will also add into this equation, the value of your deposit and how much you’ll be expected to pay back on your monthly instalment plan.
By this stage, having ostensibly ‘agreed’ to the purchase, many buyers will be sitting in the showroom, clutching a cup of coffee, with their heads swimming with figures and a rising sense of panic.
If you are thinking about part-exchanging, it’s important to carefully consider all the options first.
Though, on the face of it, it might seem like a hassle, in most cases you will get much more money if you sell your old car privately or sell to an online car buyer – and, crucially, this will mean buying the new car will be a simpler process and your repayments will be lower.
Part exchange and dealer’s choice
There are certain things that dealers will typically look out for when they are looking around for a good part exchange.
Such things as sought-after makes and models with added extras, low mileage and unusual or rare factory colours. If the car you’re attempting to sell fits any of these criteria, then you probably hold a fairly strong hand – and it’s a good idea to know this going in, as it would be an unusual dealer that would volunteer the information.
At the time of writing, dealers are also currently favouring SUVs over estate cars and other more traditional styles (as their popularity grows), but this may change over time,
Do some internet-based research on your old car and see what values similar years and models are fetching on the market. Then take it to a few dealerships to get a valuation. It’s a good idea to let them know that you are doing this.
Firstly, this will let them know that you’re not only prepared but expectingto walk away from them following the valuation, but also if your car is something they like the look of, they won’t want to lose it to a competitor – and may even start haggling.
What do car dealers look for with part exchange?
Whilst it’s generally a good idea to not PX your old car unless you have to, if your old car is very beaten-up or has mechanical issues it is worth considering – simply, as the convenience is likely to override the potential financial rewards.
Any dealer worth his salt is likely to test your old car and look at the bodywork, before giving you a price. Your car will probably end up in an auction, so the dealer will know what is liable to get a decent return – and what won’t.
When it comes to your car’s condition, it’s not always the big stuff that will make a difference either. Small scratches, scuffs, chips and dents will all naturally contribute to a lower value and offer.
Even the most superficial damage will make a resale more difficult and cause the dealer to take this into account (or, at least, use it as a reason) when making an offer in order to minimise their own risk.
Another thing that dealers will be looking out for will be if the car has a full service history – and surprisingly few sellers seem to realise this.
This will always add value to your car – whereas, a missing or incomplete history will lower the price and give the dealer pause for thought. With a full service history from a franchised dealer, they will be happier to make a judgement call on the current state of the vehicle and how it has been treated over the years.
Similarly, having a short time left remaining on your car’s NCT will often have a negative impact on the price offered.
If the car you are part exchanging has more than six months on the MOT, be sure you mention this during the dealer’s initial appraisal.
Part exchange vs. online car-buying services
What is your old car worth? If you are thinking about doing a part exchange, it’s essential to work this out.
There are plenty of websites where you can get a free valuation, just by adding a few details about your car. For example, at Motorcheck.ie, you can get a comparison from a number of car-buying services simply by adding the car’s registration number and mileage.
If you do sign-up to a car buying service online, it makes sense to be honest when filling-out the details about your car. There is no point in attempting to bluff the website as all buyers will check the authenticity of any details you enter. Also, there is no pressure to sell to any of the car buying websites in the comparison table. Play it straight and you’ll get the best possible valuation.
That said, though these car-buying services will help you get an idea of what you might expect at the dealership, many of them also offer other inducements – such as free home collection of the vehicle and instant bank transfers of the agreed price – consequently, offers and valuations can lower than the price a good dealer is likely to give.
Remember: many individuals will arrive at a dealership without any idea of how much their car is likely to get for part exchange – and will get a poor deal.
As soon as you can demonstrate that you have a clear idea of the car’s worth, most dealers are likely to sense that you have done your homework and will adjust their offers accordingly.
Getting a better offer for part exchange
There are some simple things you can do to improve your chances in getting a higher valuation and offer at a car dealership.
For example, it is a good idea to get your car valeted, or – if funds are tight – semi-valeted or just thoroughly cleaned. It’s a simple thing, but having the car clean and smelling fresh can often make a huge difference!
Assess the full condition of the car – its tyres, body panels and interior – and see if there are quick wins that don’t cost much to fix, but might make a big difference to your offer.
This might be anything from waxing the bodywork to buying a cheap scratch repair kit online. When you do these things, do tread carefully as you will inevitably be looking to get any money you have paid out back into your bank account on the sale with a higher purchase price, so don’t spend too much!
It’s also a good idea to replace any missing parts – but only if it’s cost effective. If your car has missing hub caps, for example, you could potentially add a bit of value to your old car by picking up some second-hand ones on websites like eBay or preloved.co.uk. Obviously, it’s a good idea to keep this cost as low as possible.
It is likely that a dealer will ask you what you want for your old car. This can be tricky, so you will need to prepare for it. From your internet-based research, you should already have a good idea of how much your old car should fetch. However, if the dealer asks you how much you want, always pitch it higher than this. The dealer will naturally want to bring this price down and tell you – correctly – that this is too much, but at least this way you will be able to haggle down to a more reasonable price.
If you get the distinct impression that the dealer is keen to do a part exchange with your old car, but they start going lower than you think reasonable, just back away and say that you’re interested in doing a deal that day, but that the price just isn’t right.
This is more likely to put the dealer on the backfoot, and you may even find that they start to haggle with you.
Part exchange and price negotiation: the haggle
Commonly, a dealer will listen to your first (high) valuation and may appear shocked, confused or be quick to openly dismiss it. This is natural – after all, you are both there to get the same result: to get the best price you can.
Just as you need to convince the dealer of your old car’s value, it’s also in the dealer’s interest to convince you otherwise.
This is simple negotiating (also known as ‘haggling’) on the dealer’s side and is an extremely common practice!
Of course, it’s entirely possible that the dealer might not ask you anything at all. They may give the car a cursory lookover and ask a few questions about its performance and condition – then hit you with their ‘best price.’
Whatever they say – even in the unlikely event that they have come in with a price higher than you were expecting – it is a good idea to reject their ‘best offer’ out of hand as too low and attempt to get them to either raise or to throw something else in to sweeten the deal. If they refuse to budge on price, simply explain that you have a few other people to see and that you’ll think about it.
If a dealer asks ‘what your budget is’ – or something similar – it’s a good idea to explain that you were only thinking of part-exchanging for convenience – and reiterate the fact that their offer is too low.
If the dealer repeatedly tells you that your price is totally out, you could always ask them if they have the CAP price or Glass’s Guide to hand. These helpful resources provide dealers with recommended buying and reselling prices on nearly every car model, regardless of age, specification, mileage and condition.
If the dealer says that they don’t have access to either of these or seems reluctant to look up the price, it could be a sign that they’re not planning on giving you a fair deal.
Part exchange costs to change car
During any part exchange negotiation, it’s a good idea to keep the ‘cost to change’ in the front of your mind.
Many sellers will naturally focus on the price they are being offered for their old car. However, if you want to know how much cash you’ll actually be parting with at the end of the deal, make sure you ask the dealer what the ‘cost to change’ price is.
Just because a dealer has offered you a relatively high sum for your old car, doesn’t mean that you’ll actually be paying less.
For example, one dealer might offer you €2,000 for your old car, towards a €6,000 model.
Whereas, another might offer you €1,500 against a car selling for €5,000.
On the face of it, it would seem like the offer of €2,000 is the better deal. However, if you take the first deal, your ‘cost to change’ – the money you will be required to pay – is €4,000.
With the second option, the ‘cost to change’ is only €3,500.
Before you make your final agreement with the dealer, make sure you know what the ‘cost to change’ is.
Some unscrupulous dealers will often offer sellers high prices for their old cars, against another car with an inflated price tag to convince the seller they are getting a good deal.
Runout models and part exchange
One popular tactic that often works in making a part exchange a little cheaper is asking the dealer what you could get against a ‘runout.’
Runouts are models of cars that are about to be refreshed – and are, consequently, not as easy to sell for dealers. If you’re keener on getting a cheap deal than a new model, you can probably pick something up that is relatively low-priced.
So, if there’s a new Toyota range being launched in a few months, it might be worth seeing what deal you can get against the current model.
Runout models are cheap due to the fact that cars at the end of their shelf-life tend to depreciate in value much more quickly, as many buyers will wait for the new model to appear – and, as a result, the manufacturers will cut back the prices of their previous models.
What documents do you need to part exchange?
If you do decide to go ahead with the part exchange of your car, you need to remember to bring the following with you:
- Log Book (the ‘log book’)
- NCT certificate
- Vehicle keys
- The car’s manual
- Service History book
If you will be taking out finance, you will also need the following:
- Driving licence
- A bank statement or utility bill (less than 90 days old)
Be prepared to walk away from part exchange
The most important thing to remember throughout the car-buying process, is that you are in charge. Until you have signed on the dotted line, received the money and handed over the keys, you are in control.
If you don’t like the prices, discount, options or delivery time the dealer is offering you, take your business elsewhere. If the dealer is rude, bullish or obviously spinning you a line, just leave.
If you know what your car is actually worth, and you stick to your guns, it’s extremely likely that any dealer will raise any ‘best price’ they first give to you – and the research you do at the initial stage of the process will give you the confidence to walk away from the lower offers.
One of the best strategies in any successful PX negotiation is to keep your options open. Starting out without a contingency plan will ultimately weaken your position – and make it more likely that you make a decision that you later come to regret.
If you have the time – and assuming the car is worth a reasonable amount – it is recommended that you start the process by travelling around a few dealerships making clear your intention to walk away after speaking to them. This will put you in a strong position.
If a dealer does want your car, they should offer you a good price, in an effort to ensure that a rival dealer doesn’t snap it up.
Remember that dealers typically get their best results from people that can’t be bothered to do the research and just want the minimum of fuss. By explaining off-the-bat that you’re planning to see a number of dealers that day, they will naturally perceive you as a ‘hard sell’ – and will know to take you more seriously.
Though it might seem like a bit of a pain, actually doing the legwork and going around showrooms and dealerships, remains the best option in finding a dealer that wants your car and is prepared to give you a good price.
However, at the end of the day, it really comes down to how much value the seller puts on their car – and how much value they put on their time.