Written by Paul Montagu.
Hopefully I am able to help answer some of the sales-related questions I am often asked in this post and shed some light on your car-buying queries...
Q. Is it true that it is better to buy in cash rather than having a part exchange?
A. The truthful answer to this is that there are many factors that decide that. If the company you are dealing with is holding too much stock, and simply don't have the resources to take your car in financially, or they need money in quick, or it's what they call 'overage stock' (the car has been with them too long), you may get a favourable deal. Your car has a value, regardless of whether you trade it in or not, and the seller has a margin.
Now, if your car is desirable and popular, they can sell it again. It can be a more attractive deal to them. They can, in essence, have another car for the forecourt and a fresh opportunity to earn money. After all, stock has to come from somewhere. If yours is a budget car or scrap car, they still have a value, but the dealer may just not want the hassle of disposing of it, depending on what type of dealer it is. Some budget vehicles are in demand and there is a good market for them, so it really does depend what your car is and whether it can be sold on by the dealer you are dealing with. It may be viable and profitable to them. Then again, it may not. Equally, if they can trade it to another dealer or auction it and make a profit for no effort, the deal is better for them.
So, the buying price of your car is a value, and the margin they have is an amount. In most cases, unless it is financial as mentioned above, it can be seen as favourable if you have a part exchange, especially if it was supplied by them and has service history through them. That is, of course, if you are realistic on its value. Everything has its price and there is a trade and retail price (that bit in between being the profit). Remember, losses can be made too. In conclusion, in most cases a retailable part exchange is a great opportunity for dealers to earn, thus it actually can be more beneficial and favourable for them.
Q. Where do the cars go after the part-exchange?
A. That is dependent on the age and if they can be retailed again. Dependent on who you are dealing with, they will, generally, either go direct to the auction or to one of their retail outlets. Just like a greengrocer needs apples to sell, a car dealer needs cars. This has become big business in the last couple of years and has proved a popular way for them acquiring stock.
The important thing to remember is most of these buying agents have outlets of their own and are tied to big organistaions. The reason people use these sites is, generally, for the ease of things and needing quick cash. For them, as the buyers, they want the cars as cheap as possible. Always check your prices and don't rush and get carried away. I am not personally a fan, as I know that there are better ways to achieve more for your car. That's a different story though. Everyone's situation is different. Remember, any extra pounds in your pocket help. Don't let someone profit too much off something that belongs to you! Hardly fair is it?!
Q. I am worried about whether the car I am interested in has any finance outstanding, or whether it has any accident history. How would I find out?
A. Without question you should always do what's called an HPI before buying a car. This will tell you if there is any outstanding finance on the vehicle or accident damage recorded. If you buy a car that is still on finance, then the car will be taken from you regardless of the situation. The car belongs to the finance company. I cannot stress enough how important it is to do this first. If buying from a dealer, then ask to see the report. They should have no problem showing it to you. A good number to use is 83600 with the registration and the details will come back with all information that is held with HPI. This can cost £6 or £7, but just think what you could lose if you don't do it!!
NB. A car may still have had a bump and not been recorded or claimed for via insurance.
Q. What do the motor trade use to value my car?
A. There are 3 types of valuation tools used: The Glasses Guide, The Black Book (CAP) and equally important, your gut feeling. The valuation tools that you have access to on the open market are sadly not as comprehensive. The gut feeling comes with years of experience.
The thing to remember here is that they are just a guide and that goes for any publication you may have access to. Ideally, you would get the three working together to achieve the best result.
Q. If I buy a car privately what rights do I have?
A. You usually have no return if you buy a car from a private individual. The vehicle is sold as seen. It is always worth taking a mechanic or someone with knowledge with you. If you drive up the road and the engine falls out, for example, that's down to you.
Q. Would you buy a car recorded on the VCAR (Vehicle Condition Alert Register)?
A. There are four categories when recording damaged vehicles. A B C D - simple enough to explain:
Category a). Car has to be crushed and is not to be re-sold. No parts are to be salvaged.
Category b). The shell of the vehicles should be crushed, never to appear on the road again. Some parts are salvagable and can be used on road-going vehicles after testing.
Category c). This vehicle is repairable, but exceeds the vehicles value. Can also re-appear back on the road.
Category d). The vehicle is repairable, but the costs are significant to the vehicle value. It will also usually re-appear on the road.
Category c) and d) cars will have to under go what is known as VIC (Vehicle Identity Check) with VOSA. This is to make sure the vehicle is satisfactory and roadworthy. Damage repairable vehicles that have been properly repaired can represent a good saving if you look out for them, and know what to look for. The rule of thumb in the trade is, if it has been written off (Category c) it is worth half of its real value (this can depend on the vehicle).
BUYER BEWARE of sellers trying to pass off category c) and d) vehicles as normal cars. Remember, always HPI a car before you part with any money to check for accidident damage, outstanding finance etc. Also, take someone that knows what to look for as they may see things you don't.
Would I buy? Certain vehicles, yes, if they have been documented properly and all checks are completed and verified.