Part exchanging your car?

Part exchange can be understood as selling and buying in one go.

Here’s how it works: the dealer uses a valuation for your current vehicle as a discount on your next one. Instead of selling your car outright and buying another, the transaction is rolled into one. A dealer may present several different part exchange offers to you, all with higher or lower discounts. 

Yes, part exchange is commonly offered by finance lenders. Dealers can also part exchange financed cars. Part exchange options with your finance lender may be based on the ‘guaranteed future minimum value’ as stated in your contract, rather than an up to date valuation. 

You can sell a financed car for more money on Motorway. We calculate your valuation using live sales data – and you can check how it stacks against your finance balance. When you’re in positive equity, you can sell quickly and easily to a dealer – and keep the surplus to put towards your next car. Motorway customers Craig and Melissa did just this – read their story here.

In theory, it may be possible to part exchange your car for a cheaper model and take home a small payout along with your downsized car. However, the vehicles and prices you’re offered are at the discretion of the dealer. As a business, they simply might not be able to offer particularly favourable terms for a downsize.

You’re better off selling your car and buying your cheaper option in two separate transactions. Not only will you have more control over pricing, you may find negotiations easier in this situation. You’re likely to come away with a lot more money.

Since part exchange is a form of sale, you’ll need all the same documents as are required to sell your car. Ownership papers, identity documents, and service history are likely to come up. If you’re on finance, you may also be subject to a credit check. Find out more in our guide.

Your car is considered in top condition if its structural integrity, mechanics, and surface-level details (e.g. paintwork, furnishings) are all close to the condition they were in when new. This can include cars that have had repair and maintenance work done to keep that condition high.

Your car will be considered in poor condition if any structural, mechanical, or surface faults are left and not repaired by a professional before they get worse. For example, windscreen chips and rust spots can both become much more serious faults if not repaired immediately.

When you sell or part exchange a car, you have to sign paperwork confirming that you’ve declared all known faults and defects. It’s up to a dealer whether they’ll offer you a part exchange deal on a car that needs repair work. 

As for category write-offs, i.e. insurance categories A or B, it’s the law that the car must be scrapped at an authorised treatment facility. Categories S and N (formerly C and D) can be sold on.

Part exchange is a form of sale, so your outgoing car will belong to the dealer you part exchange with. It’s then theirs to sell at their discretion.

To learn more about retaining your private plates, read our guide. The process for retaining them will be the same whether you sell outright or part exchange.