How to part exchange your car – the ultimate guide
Want to part exchange your car? We explain the ins and outs in this how-to guide to help you get the highest car valuation and make an informed decision about using this route to sell your car.
Part-exchanging a car is a way of ‘trading up’ or ‘trading in’ your car for another, sometimes more expensive vehicle, by offsetting the value of the original car against the price of the next one.
Once the value of the 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.
Part exchange is just one of several ways to sell a car, and it can be an easy option. However, though it’s typically quick and hassle-free, it’s not always the best route for everyone.
How to part exchange your car explained:
- Is part exchange always a good choice?
- Car value and the finances of part exchange
- Part exchange and dealer’s choice
- What do car dealers look for with part exchange
- Part exchange vs. online car-buying services
- Getting a better offer for part exchange
- Part exchange and price negotiation
- Part exchange costs to change car
- Runout models and part exchange
- What documents do you need to part exchange?
- Walking away from part exchange
- The best way to sell your car
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 the best route to take.
Car dealers will make more profit on the part-exchange discount than they do on the price of your new car.
Therefore, it’s important for anyone part-exchanging their old car to really assess what they are trading in and whether they should be trying to get more value.
Car value and the finances of part exchange
If you have the money to buy a new car without having to resort to part-exchanging, it is generally a good idea to do so. A part exchange may well be the easy option, but rarely is it best in terms of final price.
Why? Well, firstly, if you sell your old car privately, you are likely to get a better price. Secondly, as a cash buyer, you tend to fair better 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’re right.
Consequently, it’s much harder for them to bamboozle cash buyers than sellers trading in 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’s not always quite so straightforward. Part exchange can very quickly become quite complicated — particularly if you’re attempting to buy your new car on finance.
When you part-exchange your old car, you’re not just negotiating on your old car’s value, you’re also working out what you’re paying for the new model at the same time.
This doesn’t seem too hard, but if you’re buying the new car on finance, the dealer will add this into this equation. You’ll have to work out how your discount stacks up against the value of your new deposit and monthly instalment plan.
By this stage, having ostensibly agreed to the purchase, many buyers will find the pricing and numbers stressful to fully understand. If there’s a time you want to feel confident, it’s when you’re buying an expensive asset like a car.
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. Crucially, this will make buying the new car a simpler process with lower repayments.
Part exchange and dealer’s choice
There are certain things that dealers look out for in part exchange deals.
Such qualities 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.
Dealers are 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’s value and see what similar 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.
For one thing, it lets them know that you’re expecting to walk away from bad prices, following the valuation. Additionally, if they really want to buy your car they’ll offer you a good price to avoid losing out to a competitor.
What do car dealers look for with part exchange?
Whilst it’s generally a good idea to not part-exchange your old car unless you have to, if your old car is dented, needs scrapping or has mechanical issues it’s worth considering. The convenience will be preferable to scrapping services, and at some dealerships you may be able to negotiate up from a usual scrap price.
Any dealer worth their salt will test drive your old car and look at the bodywork before giving you a price. Your car will probably end up in an auction, and the dealer knows what will get a decent return — and what won’t.
When it comes to your car’s condition, it’s not always the big stuff that makes a difference. Small scratches, scuffs, chips, and dents will all contribute to a lower value and offer. Even the most superficial damage will make a resale more difficult and cause the dealer to offer you less money.
Another thing that dealers look out for is full service history. Surprisingly few sellers seem to realise this. Complete records always adds value to your car, whereas missing or incomplete history lowers the price and gives dealers pause. With full service history, they’ll be happier to trust the current state of the vehicle.
Having a short amount of time remaining on your car’s MOT often has a negative impact on the price offered. If you are part-exchanging more than six months after the last MOT, be sure to mention this during the initial appraisal.
Part exchange vs. online car-buying services
What’s your old car worth? If you’re 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 submitting a few details about your car. For example, at Motorway, you can get an estimated offer and find your highest offer from a verified dealer.
If you choose an online car-buying service, be specific when filling out the details about your car. There’s no point in attempting to bluff the website, as buyers check the authenticity carefully. Play it straight and you’ll get the best possible valuation.
Though car-buying services will help you get an idea of what to expect at the dealership, many also offer other incentives — such as free home collection of the vehicle and instant payment. However, their prices are offsetting these perks.
Remember: many individuals will arrive at a dealership without any idea of the part exchange deal they’ll get. If you can demonstrate that you know the car’s worth, you may be able to negotiate a little more. Typically, dealers will negotiate outright sales more than they’ll negotiate part exchange discounts.
Getting a better offer for your part exchange
There are some simple things you can do to improve your chances of getting a higher valuation and offer at a dealership.
It is a good idea to get your car professionally cleaned inside and out. 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. See if there are any quick, cheap fixes you can do that will make a big difference to your offer. This might be anything from waxing the bodywork to buying a cheap scratch-repair kit. Tread carefully with spending — the idea is to invest in the car to get a better offer.
Replace missing parts if it’s cost-effective. You can pick up second-hand hub-caps on eBay or preloved.co.uk. Making sure all the parts are clean, matching and well-installed will help the value.
It’s 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 research, you should already have a good idea of your car’s valuation.
When the dealer asks you how much you want, always pitch it a little higher than the valuation. The dealer will bring the price down, but you’ll be able to negotiate a more reasonable deal than if you started at a lower figure.
If you get the impression that the dealer is keen to part-exchange your old car, but they offer an unreasonably low price, just walk away. This might prompt them to negotiate, or you can find a better deal elsewhere.
Part exchange and price negotiation
Commonly, a dealer will hear your valuation and appear shocked, confused, or quick to openly dismiss it. This is natural — after all, you both want 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 on the dealer’s side and an extremely common practice.
Of course, it’s entirely possible that the dealer might not ask you anything at all. They will inspect the car and ask about its performance and condition — then hit you with their ‘best price.’
If they come in with an unexpectedly high price, it’s prudent to reject their first offer and ask them to raise it. If they refuse to budge, explain that you have more dealers to see and that you’ll think about it. They may offer to sweeten the deal, by throwing in extras, if they really can’t budge on price.
If a dealer asks ‘what your budget is’ or similar, explain that you were only considering part exchange for convenience. Reiterate the fact that their offer is too low and see if they improve itl
If the dealer says your price is unreasonable, ask if they have the CAP price or Glass’s Guide to hand. These resources provide dealers with recommended buying and reselling prices on nearly every car model, regardless of age, specification, mileage, and condition. Be wary of any dealer who won’t check these resources.
Part exchange costs to change car
During any part exchange negotiation, 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, you should also ask 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 the new car.
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, the offer of £2,000 could seem like the better deal. However, the cost to change in the first deal — the money you’re 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, relative to other options.
Runout models and part exchange
A popular tactic that can make part exchange 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 easy to sell. If you’re keener on getting a cheap deal than a new model, you can pick up a low-priced runout.
So, if there’s a new Toyota in the range being launched in a few months, it’s worth seeing what deal you can get for 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 quicker, 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:
- The V5C logbook
- MOT certificate
- Vehicle keys
- The car’s manual
- Service book
If you’ll be taking out finance, you’ll also need the following:
- Driving licence
- Passport
- A bank statement or utility bill (less than 90 days old)
If you’d like to learn more about how having the relevant documents can affect the success of your car sale, we cover this in detail in our complete guide to the documents required to sell a car.
Be prepared to walk away from a 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.
Take your business elsewhere if you don’t like the prices, discount, options, or delivery time the dealer is offering you. 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 the ‘best price’. Plus, 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 part exchange 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’s 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.
The best way to sell your car
If you’re thinking about selling your car quickly and easily, at Motorway we offer a simple — and completely free — method of getting the best price when selling, whatever the model.
Just enter your reg and you will be provided with an instant estimated sale price based on up-to-the-minute market data. We’ll then ask you a few easy questions about your car and guide you through the photos you need to take to complete your vehicle profile. It can be done right from your phone — in a matter of minutes.
If you choose to enter your car into a daily sale, it will be shown to our nationwide network of more than 5,000 verified dealers looking to add to their stock of used cars. Interested dealers will then compete to buy your car, offering you their best price.
In as little as 24 hours you will receive your best offer — and, if you choose to go ahead with the sale, your car will be collected for free by the dealer and the money will be quickly and securely transferred to your bank account.
Should you sell your car?
Want to learn more about the best ways to sell your car? Check out more of our guides here, covering everything you need to know about different finance schemes, and what they mean for you as a car owner.
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