Maximizing trade-in values in a bullish used car market

According to our sources dealers who use the auctions to dispose of their customer part-exchanges are making record profits from this stock. Some are only half joking when they say that maybe they should put all their cars through the auction because they would make more money than retailing them. The reasons for this are varied; not enough cars around in general leading to higher than expected demand, better presentation standards and descriptions etc. The point is that this is all very good from a dealer’s point of view. Most are generally budgeted to break-even in this area, thus encouraging them to maximise on the volumes they could sell by ensuring that customer trade-ins are valued to give a good chance of selling another vehicle.

With the market as it is though – and no one really understanding the pace and size of the change in used car sales – it is important that any potential buyers do their homework before attending the showroom. The problem is that with nothing but bad news being reported and car sales and dealers, in fact anyone with any business in the car market, on a downward spiral it is much easier to convince a customer that the value of their present car has plummeted. The truth is they are much more likely to believe this when they read in their newspaper, see on the TV or hear on the radio what a desperate state the motor trade is in!

This scenario has actually played into the hands of some car dealers and perhaps they have inadvertently, by trying to be cautious in their valuations, been caught out with just how large the re-bound in used car values has become. So as far as customers are concerned they may think they are getting a great deal on the car they are purchasing, but in reality may at the same time be getting short-changed in the value of their existing car.

Here are some MTI tips on ensuring the best possible price for a trade-in:

  • At present all cars are making good money, but the very best cars are making top dollar, so make sure your car has a long mot, that you have all the relevant service history and any invoices for work you have had carried out.
  • Remember the person who ends up buying your car is just like you and wants to buy with confidence therefore make sure that your registration documentation is present when you attempt to have your car valued.
  • Always attempt to have your car independently valued before you find out what the dealer is prepared to offers. For instance if you have a Renault and are buying a Ford; Google a Renault dealer and ask for a rough value, or, for a “ball-park” figure visit some of the websites which actually offer to buy your car if it fits in the correct criteria such as
  • Don’t give the dealer you visit any excuse to down value your car, if you spend approximately £30 you can have a professional valet and polish and maximise the presentation of your car.
    Always ask the dealer how he arrived at the value he has given and always question the price, blind acceptance will ensure you get a lower value. Even if you think the price offered is great, in this bullish market it could be worth more.
  • Always check out the likes of Autotrader etc it is very easy to build your car into the search engine to what a model of similar age, mileage and variant is being advertised for, and although these are advertised prices it will give you some valuable traction if cars similar to yours are being advertised at £6995 and the dealer you visit only offers you £3000!
  • As we have tirelessly reported, prices have risen steadily this year and everyone has been taken somewhat by surprise, but as the price of the used car you want to buy is now rising with lack of cars around, just make sure that your old car rises accordingly!

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    One Response to Maximizing trade-in values in a bullish used car market

    1. Mark Robbins April 11, 2009 at 11:16 pm #

      All cars are making good money? lets just re-adjust that somewhat, having had a very busy easter at our garage there have been an awful lot of customers who had vehicles we (and countless other dealers) just wouldnt want ! for example: you may have a very popular model but with no air con or sunroof? we wont want it, or maybe your car is in doom blue, any green, or pillarbox red? again a no no Im afraid, and while we are on the subject, the customer rightly expects a service history and receipts for the vehicle they want to purchase but are sadly lacking the same documentation for their own! No, not all cars are wanted, in fact as i have said before, the trade is awash with cars, there is no shortage of the wrong cars, but very few of the right ones! it is no different now than its ever been, the right money for the right car when trading up (or down) but way below book for the wrong one.

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