Part ex values - stupid question

[DanL]

Having been looking to change the car recently, I looked up the part exchange value for mine in Glasses guide via the Vauxhall website - it seemed like a good idea to know what it might be worth!

Anyhow, against used cars I'm being offered pretty much the value in the guide, but with no movement on the price of the car I'm looking to buy.

This got me thinking - is the part exchange value listed a price the car is worth buying at (so that it can be resold at a profit), or the rough value of the car against another car taking profit into account?

I don't mind them making money, but I'm a bit vexed if they want the full profit from the car they're selling, plus profit from my part exchange, purely because I feel I'd be getting a bad deal!

So - is being offered "just" book price for a car (in good shape) against another car doing well, or not?

[sday12]

Certainly not.

[Deerfoot]

I just concentrate on the cost to change, the theoretical value of the swapper is pretty hard to determine if you are part-exchanging.

[SubaruSteve]

DanL said:

I'm a bit vexed if they want the full profit from the car they're selling, plus profit from my part exchange

They get the profit from the part exchange from the NEXT customer, not you.

[DanL]

Deerfoot said:

I just concentrate on the cost to change, the theoretical value of the swapper is pretty hard to determine if you are part-exchanging.

Cost to change is what I ask the salesmen, but the figures I get back tell me I'm getting bang on book value for my car against full list price for theirs.

Everyone thinks their car is a good example, but mine really is (honest!) - two owners (including me), full main dealer service history, done on time rather than milage, no work required that I know of, and MOT'd and services a couple of months ago.

I'd be after around £1k off an £18k used car if I were paying just cash - no idea if I'd get it, bit that would be a price I'm happy with... Just wondering if my p/x would absorb some of that when it comes to the deal.

[SubaruSteve]

DanL said:

Cost to change is what I ask the salesmen, but the figures I get back tell me I'm getting bang on book value for my car against full list price for theirs.

Everyone thinks their car is a good example, but mine really is (honest!) - two owners (including me), full main dealer service history, done on time rather than milage, no work required that I know of, and MOT'd and services a couple of months ago.

I'd be after around £1k off an £18k used car if I were paying just cash - no idea if I'd get it, bit that would be a price I'm happy with... Just wondering if my p/x would absorb some of that when it comes to the deal.

I always find this quite interesting. If the 18k car was well worth the money and other people had the similar car up for 19k would you still walk away if the garage wouldn't knock a penny off?

[Syd knee]

Shock horror, business tries to make as much proffit as possible, grow some and start haggaling.

[DanL]

SubaruSteve said:

They get the profit from the part exchange from the NEXT customer, not you.

Indeed they do. However, this means they're looking at the profit margin on two deals I presume? The car they're currently selling, plus my p/x (should they resell it themselves).

I'm clearly looking to minimise their profit to benefit myself - the question I have is really around where the profits for them are in the transaction so I can try and guess if what I'm after from the deal is realistic or not.

[Denis O]

The Vauxhall website does not give a Part Ex price but a price for a dealer to buy your car as a straight purchase.

Talking with dealers that price is a litle lower than Part Ex.

Dealers certainly make profit on both vehicles in a Part Ex deal and I guess that is the price we pay, as punters, to have all the ag taken out of the deal.

It appears that the majority of the buying public prefer to buy from dealers because of a perceived safety level. I have my Jag advertised at £500 above the part ex offer and not 1 call. Presumably a punter will be happy to pay £3k to £4k more from a dealer for the exact same car. It needs no prep.

I recently sold my 50th Defender to a dealer for £13k. It was on his website within a day at £17.7 and they don't negotiate. Sold within the week again needing no prep.

[DanL]

Syd knee said:

Shock horror, business tries to make as much proffit as possible, grow some and start haggaling.

Quite happy to haggle. Just after some info to allow me to judge what is/isn't a good deal so my haggling is "realistic".

[SubaruSteve]

DanL said:

Indeed they do. However, this means they're looking at the profit margin on two deals I presume? The car they're currently selling, plus my p/x (should they resell it themselves).

I'm clearly looking to minimise their profit to benefit myself - the question I have is really around where the profits for them are in the transaction so I can try and guess if what I'm after from the deal is realistic or not.

No it doesn't. They have a sales space occupied by the car you are looking at.

Example 1: You buy the car with no part exchange, they use this money to buy another car ideally suited to their garage and replace the sold unit with it

Example 2: You buy and part exchange you car. They fill the space with your car which they may or may not have chosen to buy and therefore may sell less quickly.

Either way they only take one profit from you NOT two. Otherwise what happens if they take a part exchange on your part exchange, have they therefore taken THREE profits from you, it could get quite expensive if that were the case!

[DanL]

SubaruSteve said:

I always find this quite interesting. If the 18k car was well worth the money and other people had the similar car up for 19k would you still walk away if the garage wouldn't knock a penny off?

Probably not, as you've got to take pricing with a view on the market. However, if a typical price for car X across dealers was £18k then you'd not be getting a bargain by paying that, verses a car that "should" be £19k and being offered at £18k to clear it.

I'm trying to get a picture for where the profits lie in the deal, so I can get a rough idea how far I can reasonably push it.

[DanL]

SubaruSteve said:

No it doesn't. They have a sales space occupied by the car you are looking at.

<snipped other good stuff>

It's also quite possible I'm looking at this incorrectly, hence the stupid question! Thanks for the perspective, it's all helpful.

[sawman]

DanL said:

Quite happy to haggle. Just after some info to allow me to judge what is/isn't a good deal so my haggling is "realistic".

at risk of stating the obvious you must have an amount you are willing to pay for the deal. The salesmans job is to sell you a car, if you go in with a bold low offer the worst he can say is no. You haven't lost anything and you can always revise your offer up. If you go in high you cant revise downwards.

A good deal is one that gets you what you want at a price you can afford.

[POORCARDEALER]

Depends what the car is.......as a dealer selling a car and taking one in part exchange is two seperate transactions ie.


selling the car
buying the part exchange

Days gone by this is how most dealer generated stock to sell, these days in 70% of cases the part exchange will be something we dont want to sell (ie too many miles, poor condition, too old/new wrong engine etc etc)...So the idea of the part ex price in these cases is a price we can achieve immediatly by selling to a motor trader or putting a car into auction....Pricing part exchanges accuratly is a skill which isnt easy as the guide books of late are a county mile wrong on many cars.

[Pwig]

Just to add, most dealerships try to run their part exchange account at a break even.

Bit different if it's a car they can sell themselfs

[SubaruSteve]

DanL said:

I'm trying to get a picture for where the profits lie in the deal, so I can get a rough idea how far I can reasonably push it.

The problem is that you can never know how much profit one dealer has vs another dealer. The profit is usually defined by the price the dealer PAID for the car and not what the market dictates he can sell it for.

There are far too many factors involved in buying/stocking vehicles to predict what each dealer may have actually paid for their vehicle and therefore you get offered what seems to be inconsistent deals from one dealer to another.

From the outside it may seem simple - guide book says this so it must be this. In real life you cannot compare one with another just buy the car you like the most, it is this vehicle you will have to sit in for the foreseeable future. The pros and cons of a particular deal will soon be forgotten.

[kentmotorcompany]

If you want more money for your car sell it yourself.

By PXing you are not doing the dealer a favour, you are paying (selling it for less, than you could do privately) for the convenience turning up in your old car, and driving away in your new one with no effort required for money you have put towards your new purchase.

The dealer isn't obliged to buy your car, if he does he is entitled to earn money from it.
9 times out 10 most dealers would prefer to not take your PX, and re-invest their money in a car they would choose to stock.

The dealer makes one profit when he sells you a car. He also happens to buy another piece of stock which in most cases gets traded on for little or no profit, or he goes to the effort of retailing it, and only then makes another profit.

[kentmotorcompany]

SubaruSteve said:

DanL said:

I'm trying to get a picture for where the profits lie in the deal, so I can get a rough idea how far I can reasonably push it.

The problem is that you can never know how much profit one dealer has vs another dealer. The profit is usually defined by the price the dealer PAID for the car and not what the market dictates he can sell it for.

There are far too many factors involved in buying/stocking vehicles to predict what each dealer may have actually paid for their vehicle and therefore you get offered what seems to be inconsistent deals from one dealer to another.

From the outside it may seem simple - guide book says this so it must be this. In real life you cannot compare one with another just buy the car you like the most, it is this vehicle you will have to sit in for the foreseeable future. The pros and cons of a particular deal will soon be forgotten.

As far as the deal goes. You have to consider what your alternatives are.

If you really think you can buy the same car elsewhere cheaper then push the deal with this in mind.

Bear in mind though the dealer will be doing the same thing, if he thinks he can sell for more money to someone else he will be confident to turn your offer down.

[mgmrw2003]

Deerfoot said:

I just concentrate on the cost to change, the theoretical value of the swapper is pretty hard to determine if you are part-exchanging.

+1

doesn't matter if it's a case of:

a) offers me 10quid for mine and wants 5010 quid for his

OR whether

b) offers me 5k for mine and wants 10k for his.

TCO (total cost of ownership) is stil £5k

That's the bit that matters.

So in theory you want to sell yours wherever the price is highest, and buy replacement from wherever the price is lowest.

So sell private, buy private!