Part Exchange Explained: How It Works When Buying a Car

How the valuation is worked out

The garage will inspect your car and assess its condition, mileage, age, service history and how many keepers it has had. They will also consider how easily it can be resold, and what work might be needed to make it ready.

A trade valuation is normally lower than what a car might fetch from a private buyer, because the garage has to prepare the vehicle, take on the risk and still make it saleable. Valuations also change with the market, so an offer reflects conditions at that time.

• Condition inside, outside and underneath
• Mileage and age
• Service history and number of keepers
• Current MOT and any known faults
• Demand for that make and model

What to bring with you

Bring the V5C registration certificate, all the keys, the service book and any invoices, and the handbook. Complete paperwork and a tidy car help a garage to judge the vehicle with confidence.

Be honest about faults, warning lights or accident history. Any problems will be found during the inspection, and it is much smoother to deal with them up front than to have the figure changed later.

If you still owe money on the car

If your car is on finance, the lender owns it or has a claim on it until the agreement is paid off. Ask your finance company for a settlement figure, which tells you what is needed to clear the agreement on a particular date.

The garage can usually take that figure into account in the deal. If your car is worth more than the settlement, the difference can go towards the next vehicle, and if it is worth less, you will need to find a way to cover the shortfall. Ask for the arrangements to be explained clearly in writing, and check the terms with your lender.

Negative equity is the other situation to be aware of, where you owe more than the car is worth. It is more common with cars bought on long agreements with little deposit. If that applies to you, talk it through openly with the garage and your lender before you decide anything, so you understand the effect on the next agreement.

Part exchange or private sale?

A private sale often brings a higher figure, but it takes time and effort, and you carry the risk of time-wasters, no-shows and disputes after the sale. Part exchange is quicker and simpler, and you hand over the car on the day you collect the new one.

Neither route is right for everyone. If getting the highest possible figure matters most and you have the time, selling privately may suit. If convenience matters more, or you want to avoid having two cars to deal with, part exchange could be a better fit.

Another point in favour of part exchange is the tidy handover. You are not left without a car while waiting for a buyer, and you do not have to worry about insuring a car you are trying to sell. On the other hand, you lose the ability to haggle with multiple buyers, so go in knowing roughly what similar cars are advertised for.

Getting the most from it

A clean car with a full set of paperwork will usually create a better impression. Fix any small, cheap faults and make sure any warning lights have been investigated. Do not spend heavily on repairs that you will not get back.

At Banks of the Tyne in Hebburn we offer part exchange as part of buying a vehicle from us. Ask us how it would work for your car and we will explain the process and what we need to see.

Frequently asked questions