How to part-exchange a car

It's no good getting a great deal on your next car if you get a bad price for the old one. Find out the best ways to part-exchange your car

BuyaCar team
Jun 28, 2022

Getting a new car can be exciting, but it can also be a confusing time if you're trying to suss out things like how to get the best part-exchange deal or which type of car finance is right for you. There are a number of different options when it comes to what to do with your old car and the best one for you depends on how much you value convenience, the price you get for the old car and how quickly you need the new car.

You could put your old car up for sale and deal with the stress of trying to find a buyer at the right price, or you could opt for a part-exchange and a relatively hassle-free process, though you may get less for the car. Part-exchanging is the slickest way to get into a new car and deal with your old vehicle in one go, because you can usually part-exchange your old car at the same place that you're getting the new one - provided you're buying from a dealer.

If you're paying cash, a part-exchange deal means the value of your old car will go towards your new one, reducing the amount you have to pay. You won't be left out if you're applying for finance, though; in this case, the value of your old car will go towards the deposit on the new one. The greater the value of the old car, the lower the payments on your new one will be. The dealership sorts out all the paperwork so you can sell your old car and buy your new car in one simple transaction.

Part-exchange is available:

Many manufacturers also offer scrappage schemes, which give you the opportunity to exchange certain older cars against a brand new model. Sometimes these options are worse value than the standard finance offer, as the interest rate could be higher or you may not be able to take advantage of other discounts, so it's worth getting like-for-like quotes to compare the scrappage offer with alternative deals to establish which is better for you.

Whatever type of part-exchange you're looking at, however, it can be difficult to work out whether you're getting a fair price for your car - as it can seem hard to establish whether you're getting a fair price for your old one without paying over the odds for the new one. Read on for our guide to getting a good part-exchange deal.

How much is my car worth for part-exchange?

The value of your car in a part-exchange agreement is based on industry data, drawn up by companies that monitor the value of second-hand cars. The car's mileage, service history, specification and condition all have an impact on the amount that it's worth.

Rather than focusing too much on getting a specific value for your old car or the new one, it's best to look at the overall cost to change car. A dealer might offer £1,000 less for your existing car than you ideally want, but if they're willing to drop the price of the new one by £1,000 more than you expected, the cost to change would be the same. 

You can use BuyaCar's car valuation tool as a guide to its value but the final figure will depend on the car's condition, with any damage such as large scratches, dents or torn upholstery all reducing the value. Once you have an initial quote, you will be contacted if any more details are needed to generate a confirmed valuation.

Opt for the BuyaCar part-exchange option and the old car will be picked up once your new one is delivered, so there's no need to travel anywhere or do without a car until the new one arrives. At that point, it will be inspected to ensure that it is as described. If it is in a better or worse state, this can affect its value.

If you're comparing part-exchange valuations with different online car buying services, ensure that you are using confirmed prices, based on the condition of your car. The amount that you are paid can sometimes be much lower than the initial online quote if you don't describe the car accurately. Some services require you to take your car for an inspection.

Part-exchange a car on finance

PCP finance gives you the choice of returning your car at the end of the contract with nothing more to pay (provided there's no damage beyond fair wear and tear and you've stuck to the pre-agreed mileage limit) or buying it for a one-off price (known as the optional final payment).

There's also a third option of 'part-exchanging' the vehicle and getting a different car on a new finance deal, which can be worthwhile if you've looked after your previous car and it's worth more than the optional final payment - the remaining debt on the vehicle.

Many companies set up PCP deals so that the car should be worth more than the optional final payment once the contract term is up - though this is never guaranteed. If you do get to the end of your finance deal and your car is worth more than that final payment, then you can put that additional value towards the deposit on a new car - this is known as having 'equity'.

If you decide to take out a new finance contract and part-exchange the car, the company taking your old car in part-exchange can settle the remaining finance balance on that car by paying the optional final payment to the finance company. You can then put the difference towards the deposit on the new finance contract.

It's also possible to part-exchange your car if you're in the middle of a finance contract and you owe more than the car is worth. You, or the new company you're part-exchanging the car with, can pay a lump sum to settle the deal - known as the settlement fee - and roll the additional debt into a new negative equity finance agreement, so you pay off your old car and your new one at the same time.

It's important to ensure that this is the right option for you because you will likely see your monthly payments increase as you'll essentially be paying for two cars in one monthly payment. You'll also pay more interest by doing this than by sticking with the original finance contract. There are other ways of ending your finance agreement early, including swapping cars during a PCP deal, so this is rarely going to be your best option.

Sell or part-exchange?

In general, you can get more money for your car by selling it yourself rather than part-exchanging it. This could be a worthwhile option if you have spare time, and are happy to deal with enquiries and visits from interested potential buyers. Alternatively, you might look for the best price from various car dealers.

If cars similar to yours are advertised for several thousand pounds more than any part-exchange valuations you've received, you may want to sell the car yourself, as you're likely to get much more for it by selling it yourself. If, however, there's only a small difference in value between what you expect to be able to sell it for yourself and the part-exchange valuation - or you simply don't want to sell it yourself - it's worth going for a part-exchange deal.

Focus on the cost to change

Whatever price you're offered for your part-exchange, what really matters is the cost to you of changing your car. If a new car costs £20,000 and you're offered £5,000 for your current car, then the cost to change is £15,000 - the difference between the value of your part-exchange and your new car.

Another seller may only offer you £4,500 for your car. That may seem like a bad deal, but if they'll sell you the car that you want for £18,000, then you're going to end up paying less because the cost to change is only £13,500.

 

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