Why is my trade in worth so little?
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Why is my trade in worth so little?
Not everyone asks this question, but many do. Especially just when they are thinking of buying a new car and they have just had their first offer and been disappointed with it.
If you feel the price for the trade-in is too low (and you’re not getting any higher offers), please be aware of the following:
- For “common” cars, the average turnaround in a car yard is 4 months. Low volume cars vary, but can easily take 9 months to sell. During this time, the car:
- must be initially repaired for scratches and dents. A “bottom-half” is the industry term for a dent repair and respray of the bottom half of the vehicle.
- needs to be financed by the dealer.
- must be advertised.
- must be maintained so it starts and runs and is clean.
- takes up one space in the yard, from which the dealer needs to generate a minimum of $x each year – regardless of the value of the car. This especially hurts cars under $10,000.
- The Redbook (and Glasses) valuation guide
- is based on cars in perfect condition. New tyres, no dents, no scratches and mechanically sound with a full service history.
- contains old data that is only periodically updated.
- sells “valuation certificates”. People love buying these to show others what a high valuation they have on their car. Higher valuations = higher certificate sales?
- doesn’t buy cars. It would be fantastic if the Redbook bought cars at the valuations they give. Unfortunately they don’t.
- Don’t compare the trade-in offer to advertised prices. Used cars advertised online (or elsewhere) rarely sell for the advertised price. There is always room to negotiate – sometimes $1,000s of dollars.
- Some (almost always private) sellers advertise their cars at super-high prices on the off-chance that they will get lucky. Some advertise their cars for years this way. Online advertising is often very cheap and “advertising until sold” is a fixed price regardless of the period of time.
Here is seven way to handle a disappointing valuation:
- Accept the offer for the trade-in.
- Add the following special condition to the Sales Agreement: ” I reserve the right to remove my trade-in from the sale prior to delivery of the new vehicle.”
- Clean the car inside and out, but do not have it detailed.
- Take photos from the front, from both sides, the rear, and through the open driver’s door (showing steering wheel and instrument panel).
- Set the price above the dealer offer and a little below what the dealers are selling similar cars for.
- Put a well written advertisements in your local newspaper. Make sure you include all of the details we asked you for (i.e. Make, model, registration expiry etc.).
- Print the advertisement on A4 paper and put it on your car – both side windows. People in your area, your work colleagues and friends will then be aware it is for sale. Many prefer to buy a “known” car and dislike having to scour the Internet every night looking for prospects.
This will maximise your chance of selling the car privately, and is basically a way of doing due diligence on your trade-in. You will find that most people are prepared to wait until you take delivery of your new car before they can pick up your old one.
Testimonials
All I wanted was to buy a car with no hassle and at a decent price. I was very happy with your service and I will use you again in the future. I guess that says it all, doesn't it?
A.M., Brisbane
Chris, You are a champ. Your advice on the trade-in worked a treat. I have a buyer at $14,280. A cool $2280 above the original figure! Thanks mate!
B.M., Melbourne
We weren't sure what to expect when using this service. It turned out to be one of the cheapest, stress-free and best investments we've ever made! Within a few hours of our enquiry Carbroker.com.au came up with a deal that saved us 13% off the recommended retail price of a new car. Further, by using the advice provided to members regarding the sale of our used car we were able to get $1500 more than any previous trade-in offer in just a matter of hours! This is a fantastic service that in total, put about $5000.00 in OUR pocket - not the dealer's! We'll never buy another new car again without going straight to Carbroker.com.au!
D.W., Sydney
Delivering what you promise is the foundation of good business. I am sure that's why you sell so many cars for people like myself. Keep up the good work!
L.B., Sydney
Living overseas but about to return to Australia, we found that buying a new car was going to be a daunting process. Carbroker.com.au took all the hassle out of it and came up with a very competitive price as well. All we had to do was choose the model, pay a deposit and then pick up the car as soon as we arrived back in Australia. This is a great service for expats who are returning to Australia
P.H., Yamba
Fast replies, great service and most importantly, extraordinary prices. Anyone buying a new car not using this service is not fair dinkum about getting the best price and probably paying too much. The service saved me thousands. Will definitely be using it again when next buying a new car and have been telling all my friends about it. Keep up the good work.
J.G., Perth
It is a sorely needed service as we have had nothing but stress and grief with the dealers we have approached ourselves.
J.F., Melbourne
Your manner and professionalism on the phone is excellent. It was a real pleasure to deal with you. I wish you the best in the future, and you can rest assured I will be back!
M.F., Sydney
All went well with the sale - your dealer was helpful, friendly and arranged the tray with no fuss or fanfare. The whole process has been totally painless and I will (and have been) recommend your service to everyone.
R.H., Mitcham
I've been with the RACV for over 10 years. I just didn't realise what a premium I was paying for the service. Going with your car insurance recommendation and the roadside assist is saving me several hundred dollars every year!
C.A., Ballarat