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
Thank you again. I could not have asked for better service. Having been faced with unhelpful dealers it was just so easy to place a Internet request on Thursday and to be in a new car Monday afternoon, it was more than I could have asked for. I would definitely recommend the services that you provide, without hesitation.
P.H., Canberra
This is by far the best money I have EVER spent. An outlay of just a few dollars saved me thousands - even on a limited edition vehicle! In fact, I saved so much I added a few optional accessories and still bought the vehicle at less than the retail price for the car alone (not to mention dealer delivery fees and charges). The savings didn't end there. I saved another bundle with the insurance you recommended (approx 33% less than another quote I already had). The savings here will continue for years to come! Not only will I be recommending your services to everyone I know, I will be using your services again myself. This is the ultimate car purchasing experience! Thank you again for your excellent service and attention to detail.
M.K., Brisbane
WOW FACTOR!! For the sevice provided, the lovely people that are always a pleasure to deal with and the easy delivery of the new car that I requested - I am an extremely happy customer. I was lucky to stumble across the Carbroker.com.au website and have told friends and family that there is no better way to buy. Chris - thanks for doing a great deal for me in the purchase of the Toyota - saved me thousands of $$$ and found me a beautiful new car. Fantastic website & a lovely person to do business with. Cheers!!
C.S., Rye
Thanks for your help. Must admit I was very sceptical in dealing 'on line' with an unknown person/company. As a single woman I don't want the hassle of going backwards and forwards, playing one dealer off the other. I used the internet to get a measure of what's reasonable and then it's 'give me your best price' no second chance. Some people can't get their head around that but life's too short. I only want to deal with ethical people. I'm happy that a salesperson makes a profit but it has to be fair for both parties. Thanks and I'll be recommending your site to friends.
M.F., Brisbane
I’d just like to comment on how smooth it was to purchase my car using your service. The finance broker you put me on to helped the hip pocket as much as the price you were able to secure for me. Thank you so much for making a major purchase easy, smooth and without buyer’s remorse. I will be looking you up when it comes time to replace our other car and I will continue to recommend you to all my family and friends
M.P., Melbourne
Just a brief note to say thanks for your outstanding service. You managed to find a dealer who was prepared to reduce the purchase by some $6750 inclusive of all costs and then you went further by haggling for a better trade in for me giving me a change over cost of exactly $13500 less... THAT I CALL SERVICE...I shall certainly be singing your praises.
K.B., Sydney
Thanks for the quote. I am kicking my self slightly. In the weekend I went to my local dealer to test drive the car and was offered exactly my spec with 1500km on the clock. 3 months old for $55K (the GMs car). I had to make a call on the spot because another chap was also looking at it. I thought this would be pretty hard to beat so i went for it. If i had waited i guess i would have an absolutely new car and with 12 months worth of rego not 9. We live and learn. Next time. Thanks and regards
W.D., Sydney
...your professionalism and responsiveness is incredible... exceeding my expectations that were already quite high due to the information available, and style and tone of your website.
C.H., Brisbane
I know what you mean when you say 'buyer's remorse'. I've had it each time I bought a new car except this time. It's a great feeling to a) get a great price b) avoid the huge stress. Seeing things from 'the other side' has made me a convert: This is the way to buy a car! Thanks for a great business.
M.W., Perth
Thankyou very much Carbroker.com.au for helping us to buy our new car. We are very happy with the process of buying a car through Carbroker.com.au. We usually have big arguments over haggling so it was a great relief to get CarBroker to do all the hard work to relieve the stress on us and our marriage. And we still got a great price!
N&M, Sydney