The time has come to find a new car.  Sometimes that’s the easy bit.  Getting rid of the outgoing motor can be the biggest headache.  The options range from scrapping the car to selling it privately or putting it through the auction but the most straightforward way for many of us is to trade it in at the dealer where we buy the new car.  It’s an attractive option as all you do is turn up on the day, hand your car over and drive off in the new one.  It’s a single transaction and you don’t have that situation where you have two cars for a few days if there’s an overlap and, of course, you might need the proceeds from the sale of the old car to fund the deposit for the new one.

So what’s not to like?  Well, let’s see where it leaves you financially.  The dealer wants to do the deal and make as much money as possible (nothing wrong with that in principle, of course) and taking a trade in can allow them to maximise their profits in return for offering the convenience of the part exchange but, as the customer, you need to decide it it provides value for money compared with selling privately as a private sale can often raise a thousand pounds or more over the trade in value.

And then you have to watch out for sales tactics as some retailers will discount the price of the new vehicle and fund it by dropping the trade in value below what it’s worth or they may offer a high part ex valuation but cover this with a high purchase price.  Consequently it may be difficult to tell how good the deal really is.

The answer is to break the deal down into its element parts.  Get a reliable, independent  valuation for your current car and make sure you get this much in part exchange.  Similarly, get an idea of how much the new car should cost (What Car’s target price guide, for instance) and ensure you don’t over pay.  Get this right and trade in with a dealer might be the answer.  However, still be aware that if the lead time for the new car is months, they may write down the trade in offer at the time of delivery as your old car will have lost some value.

Or how about this as an alternative?  Use a good leasing broker to order the new vehicle through and this will generally undercut the dealer with its large overheads.  When the new car arrives, there’s usually around a 5 day delay before the deposit is taken, which is enough time to dispose of the old car privately and bank the cash which will be more than the trade in value.  So both element parts of the deal – the purchase and disposal – are likely to be better financially than a composite offer from the dealer.

As an additional service I give our clients a reliable, industry standard valuation of their old car.  We don’t do trade ins or buy used cars but it helps them to work out what they can afford as they will need to commit to the new car before they sell the old one but that’s hard to do without knowing how much you have to play with.  It also means they can go to their local dealer armed with the information they need to get the best offer there and can easily compare it with our proposition and then pick the best deal for them,  Hopefully, that’s ours, of course!

If you’d like to know more about how leasing works and how it could work for you, please get in touch.  If you think others would be interested in this post, please share it.

Matt Spivey

Vehicle Leasing Neva Consultants
Left the corporate world in 2013 after ten years at Vodafone and now specialising in car and van leasing with Neva Consultants.Serial networker and member of BNI Wakefield Wealthbuilders, 4Networking and The TradesHub Academy South Yorkshire.

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