Got your eye on a next set of wheels? Then you’ve probably wondered what to do with your existing car. You could sell it privately or go for the quicker, more convenient option – trading it in at a dealership. How will you get the right price for it? We bring you the ultimate tips to negotiate a savvy, cash-rich deal.
Tip 1: Know what your car is worth
Do your homework by visiting online car retailers and several dealerships to see what your model of car commonly sells for. Alternatively, in just three steps, Santam’s free online car calculator will give you an estimation of what your vehicle is currently worth and what the market value is of the vehicle you’re intending to buy.
Tip 2: ‘Stage’ your car
You may have heard of estate agents staging a home for a sale. Nice furniture, fresh flowers, new plants, etc. help buyers to visualise themselves in a home. Staging works for cars too – spending a few hundred rand now to have it professionally cleaned (including the engine) and any nicks repaired could mean getting thousands more for it from a dealership.
Tip 3: Show you’re a responsible owner
Be sure to keep and present receipts of all the maintenance work you’ve done to the car, any improvements (tyres, aircon, sound system) as well as an up-to-date service book. Be transparent about the car’s history – it will create trust with the dealer. Tell them if the car was in an accident or has any structural rust or electrical faults.
Tip 4: Bank the trade-in
‘Banking’ the trade-in is an industry term for finalising the price of your old car before discussing the new purchase you wish to make. Dealers like to juggle around the costs between the two deals – e.g. offering you more for your trade-in then raising the price of the new car to make up for it. Ideally, don’t let a dealer know that you are interested in something on their floor, and settle on a price – in writing – that you’re satisfied with before proceeding.
Tip 5: Know the tricks of the trade
Most salespeople are ‘nice’ and honourable but remember that it’s still a business transaction, and that they have years of tricks up their sleeves to get you to sign on the dotted line. For example, the test drive model will always be the one with the best leather seats, sound system and other extras to entice you to pimp your ride. They might say a price is ‘limited time only’. Don’t feel pressurised – walk away if you must. Beware of freebies such as a tank of petrol, car alarms, roof racks etc. Decline the offer and ask them to rather reduce the asking price.
Tip 6: Keep a cool head
Clever marketing means that dealers often focus on the monthly price to encourage you to buy a more expensive car. The bigger the price and the longer the loan period, the more money the dealership makes. Know what you can afford and stick to your guns. Remember the old rule of thumb of running costs: if your car payment is R5 000/m, budget for another R5 000/m for petrol, maintenance and insurance.
If you have any questions about your car insurance or want to ensure you are adequately covered, speak to your broker or call us on 0860 444 444. Read more advice on trading in your car on our blog – for example, the three steps to doing a smart deal.