“I can't believe they've offered me so little for my car!!!”
It's a story that we've all either experienced personally or heard from a friend or relative and our reader, let's call him John, is no exception.
Before contacting us, the understandably flustered Subaru owner had tried to trade his immaculate 2010 Impreza 2.0 RS in on a used Audi S3 that had caught his attention on a Subaru dealer's floor. Problem is that this dealer was only prepared to give him R120 000 for it, which is less than half of what he'd paid for it two years prior.
Further probing revealed that there is no book value for this specific model in the TransUnion Auto Dealer's Guide (the one the dealers use for book value), but a similar model was valued at R187 600 (retail), with a trade-in value of R183 800.
Yet the dealer had given John a sob story about how his car is not a popular model and that it would likely sit on the floor for a long time. Perhaps they'd need all that extra money to pesticide the weeds that would grow beneath it?
To get a better perspective, I came up with two fictitious low-mileage cars in good condition (one a popular model and the other a rare sight) and contacted some new car dealers, representing the respective brands, for an approximate trade-in value.
Our popularity contest winner was a 2010 VW Polo 1.4 Comfortline with 47 000km on the clock, which the book says should retail for R143 000, with a trade-in value of R131 000.
Of the six quotes I received, five of them offered between R125 000 and R132 000, with just one trying to hoodwink me into accepting R118 000 for it.
As expected, it wasn't as easy to get a good price on the other car, a 2010 Mazda3 Sport 1.6 Dynamic with 44 000km on the clock. For this I received offers of R130 000, R160 000 and R165 000 - all a bit short of the actual trade-in value of R171 800 and the book value of R192 100.
The moral of the story here is quite evident, though, and after suggesting that John seek more quotes, he did find another dealer that was prepared to give him R185 000 for his car, subject to them inspecting it.
But how does the average person go about getting a good trade-in deal? After doing some research on the matter, there are a few pearls of wisdom often shared by dealer principals and other industry experts.
1 - DO YOU HAVE TO TRADE-IN?
First consider your other options. A private sale will almost always fetch a higher price, but then there are numerous drawbacks - like test drives with strangers, being potentially liable for faults and many logistical hurdles. An alternative is to sell your car on consignment at a dealer or through a channel like AA Autobay, which will help with the paperwork and arrange a secure test drive.
If the convenience of trading in is too hard to resist, however, be sure to take heed of the following steps.
2 - KNOW YOUR CAR'S VALUE
Find out your vehicle's book value. Both the retail and trade-in values are available on the TransUnion website for a fee of R30 (see website link at the bottom of story). Alternatively, you could get an approximate idea of its value by browsing used car websites like Surf4Cars.co.za. Remember that the correct trade-in price is likely to be around 10 percent less than the actual retail value in most cases.
3 - NEGOTIATE SEPARATELY
Many dealers are offering 'trade-in assistance' deals these days, which could just make the discount on the new car (which it essentially is) sound bigger than it really is - especially if they happen to undervalue your car. Key rule is that a discount on a new car is always better than trade-in assistance on your old one because the new car discount is completely quantifiable.
That's why you need to negotiate separately. Shop around and push the dealer for the biggest possible discount on the new vehicle you're buying. Don't even discuss your possible trade-in until you've done that. That's another negotiation altogether and in the end you'll just have to weigh up the discounts and trade-ins offered by the various dealers and do the sums.
4 - SHOP AROUND
Most importantly, be ruthless and shop around until you're blue in the face.
5 - PRESENT A GOOD, CLEAN CAR
First impressions count, so make sure that your car is as clean as it possibly can be, inside and out and that everything is working as it should be. Fix what you have to fix as any blemish or fault will provide an excuse for the dealer to knock your price down.
Also have all the necessary documentation handy, including the service history book.
6 - POPULARITY COUNTS
This tip isn't going to help you to get rid of the car you're currently saddled with, but buying a popular model and variant of car will certainly help you the next time you want to trade in.
Even the colour can make a difference here and, of course, avoid accessorising too much as this hardly ever has a positive effect on the resale value.
Of course, the advantages of buying a popular car must also be weighed up against the potential theft and hijacking risk and the fact that it might not be the car you actually want to own.
After all, life's just too short to drive a boring car.