part ex v trade in price - what's the difference?

[oop north]

Had buying disaster with new car for wife (seating position exacerbated her sciatica really badly after a week but not during test drive) so we need to trade in / p.ex against a different car only a couple of weeks after buying.

Got a What car valuation but am confused by it giving a trade in value and a part exchange price - I have no idea what the difference is (apart from £700 indicated). Can anyone enlighten me?

Is the trade in price actually "trade" price, with the p.ex figure reflecting that a dealer may give you a value above trade on buying another car from them? That would make sense but I would prefer not to make assumptions

[Scootersp]

The bigger problem is how the hell do you buy the next car and avoid the same issue? It could be a very costly game of trial and error!

[oop north]

We have that sorted thanks...

[Dr G]

Ignore What car. They won't buy the car from you so their valuation might as well be from Barry down the Pub, ditto Parkers, Autotrader etc.

Put it in to We Buy Any Car; the figure they give is generally a small amount below what the car will sell for at auction based on CAP (the trade price guide) and modified by known, recent auction results (less any damage on vehicle). This is a valuation (unlike Parkers etc.) because it is a figure that someone will pay you for the car. British Car Auctions own WBAC so make a small 'profit' margin by buying slightly behind what it will sell for but their real money comes from auction fees (very easily 500-1000 per car).

Exactly what the dealer will give you for the car will be based around some of the same criteria but also factored by the following:

Manufacturer incentives
Targets (various)
Age of stock
Desirability of stock
Volume of stock the dealer has
How hard the stock is to replace
What extras you are buying
What finance you are using
Whether they want the part exchange for stock

There is no one part exchange or trade in price that is universal and it is VERY hard to compare part exchange prices when given by different dealers.

Use the WBAC price as your baseline. If the price they offer you is about this figure then it is probably fine. If yours is a good colour with a really nice specification (or even a rare/desirable model) then asking/expecting a little more is fine. Sometimes WBAC prices are artificially high for various reasons and in this case there is no harm in selling to them. More often than not a dealer does want a part exchange (for numerous reasons) and there is no automatic benefit or discount when you don't have one. This is a myth that WBAC propagate.

Ensure the car that you're buying is at a market competitive price considering what the deal includes. The 10k main dealer car is probably better value than the 9500 private car. In fact it's probably better value than the 8500 private car also.

If the part exchange price and price of the vehicle are market competitive you're about there. By all means negotiate but hold in mind that the dealers do not have massive margins; in volume sellers it won't even be 5%. If you're paying in cash and not buying anything extra they may well just say no because they're not making anything from the deal and nice stock is hard to buy.

EDIT: If you'd like an outside opinion on an offer I have no problem with your emailing me, I do it for a living

[oop north]

Thanks - have worked out the word "in" shouldn't be there, so the lower value is trade not trade in

I am aware that dealers have to make a profit and that margins are not huge. I let my wife do the negotiations as I am all too ready to fold if I like the car . We decided not to go for he car we looked at (a freelander instead of the Prius mistake - after two weeks of driving my D4 she is happy with the driving position - just wants something a bit smaller but seats not heated).

[bitchstewie]

Random thought but can't you get like seat supports and "things" that might be cheaper than taking the hit on chopping cars after two weeks?

Only saying because you'll never know from a test drive if you won't be in the same boat again in two weeks.

[fivepointnine]

In my dealings (or it might just be the cars I am always interested in/trying to sell) WBAC prices are artificially low, I can normally get £500 to £1000 higher on P/X than through WBAC. WBAC will give good prices on boring, low powered diesel rep-mobiles. If it is not an Audi/BMW or has a petrol motor WBAC wont offer a fair price at all.

[Ozzie Osmond]

You should DEFINITELY look for a significantly better trade-in price than the WBAC low-ball offer. Amongst other things, the dealer is making profit on TWO transactions, one larger than the other. WBAC only has a single small transaction.

[Dr G]

Ozzie Osmond said:

You should DEFINITELY look for a significantly better trade-in price than the WBAC low-ball offer. Amongst other things, the dealer is making profit on TWO transactions, one larger than the other. WBAC only has a single small transaction.

Not the case on either count. WBAC prices are based on both CAP and auction results.

They get two bites at the cherry, not one; whilst they do make a unit profit they also make a killing on auction fees.

Comparing part exchange prices is very difficult (see my post above) as you as a customer do not know exactly how it is made up. The trade value will not change regardless of what the dealer writes on your order. They may well be prepared to over allow based on the criteria above.