While the used car market seems to be thriving on the back of high price inflation on new vehicles, consumers continue to struggle to get good prices on trade-ins. get\Worth provides some valuable advice and tactics to adopt to give consumers a better chance of a decent outcome.
get\Worth director Jamie Surkont says getting a decent price when selling your car is no easy feat. “Start with research, you need to get a good idea of the market value of your car. There is a wealth of information available these days on the online listing and classifieds platforms.”
“Look at the list prices of cars with the same registration year and similar mileages. Make sure you compare apples with apples – with the thousands of different car variants out there, you need to be careful that you are comparing the same specification,” he explains.
An unrealistic asking price can kill the chances of a sale. There are often a variety of prices in the market for the same car, but consumers tend to ignore the lower list prices and mostly think their car is worth top dollar. This is seldom the case – it is normally the lower priced vehicles that sell first.
Surkont says the next critical consideration is how to sell. He points out the pros and cons of each method:
Pros: You sell directly to the buyer, so there is the potential to get a better financial outcome.
Cons: Security concerns, time-wasters, tire kickers, paperwork and something that many people overlook: finance. Financing private sales, particularly if there is a trade-in involved, can be challenging and often can take many weeks to finalise. The typical buyer would rather buy from a reputable dealership than an unknown private party, which will affect your asking price.
Pros: The convenience of a single transaction.
Cons: It is hard to tell what you are actually getting. A dealer can offer you what seems like a good price for your current car, but that could be subsidised by an inflated price for your new car. You would need to ask for a cash price to get a real idea of what you are being offered for your old car.
Middleman sale – wholesalers who buy cars for cash
Pros: Speed and convenience.
Cons: These buyers on-sell most or all of those vehicles to other car dealers. This middleman adds a further layer of cost, so you are virtually certain not to get the best price.
Pros: It’s quick and the pricing is usually transparent.
Cons: The pricing is not necessarily great – most buyers are dealers, the auctioneers charge quite hefty fees (4% – 8% is common) and the vehicle needs to be present at the auction, posing a logistics challenge.
get\Worth offers a product that pays immediate cash for the car and then a bonus when the car sells to a retail buyer, with the seller setting the asking price.
Pros: It achieves a retail price under a dealer banner, where finance can also be arranged, and is quick and convenient for the seller.
Cons: There are fees involved, but lower than a normal trade margin and the upfront cash received is on average equal to or greater than middleman prices.
Surkont points out that a seller is normally trading off time, price and convenience. “The more patient you are in selling and the more effort you are willing to put in, the more likely you are to achieve a decent price.
“Time carries a cost too, though: your finance payments, insurance and price depreciation continue. Only the hybrid method factors in all elements at the same time,” he concludes.
get\Worth helps its customers to manage the wealth impact of car ownership by providing the necessary tools and information to make informed decisions.