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
I just want to say thank you for all your effort in getting me a good deal on the car. I managed to save close to $6,000 from the initial quote given to us by a Toyota car dealer. I am very happy with your service and will surely recommend you to all my friends who are keen to buy a new car.
N.A., Victoria
I must say that your service is excellent - using it should be a "no brainer" for anyone buying a car. Gaining access to a sourcing professional with deep domain expertise to assist with a high value purchase for under a $100 is fantastic. Many thanks
I.H., Perth
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F.W., Melbourne
I took delivery of the new car today. Until it actually happened I had a concern at the back of my mind that it was too good to be true to get the car at the price you obtained for me, with no catches. The dealer rep has been great and I have had no sense of getting cut price service to go with the low price. So, thank you. I am sold and based on my experience I am sure your business will continue to grow simply by word of mouth....mine will be among the loudest.
P.B., Sydney
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
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
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
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
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R.H., Adelaide
Picking up car on Friday. Saved >$3000. Thanks for everything. Would recommend process highly. Thanks!
H.M., Brisbane