Find out is it okay to exchange your old car with a new one at the dealership or is it wise to sell it separately outside?
Most of us want to update our car at one time or another. With options like easy availability of loans, competitive pricing, and various discounts, it has become pretty much affordable to buy a new car. Statistics say that Indian car owners update the cars every 3 years on average.
The difficulty is in deciding whether or not to find a buyer in the market or to just trade your car in at the dealership for an upfront payment. Not to mention, the time it takes to do the research and to find a genuine buyer who would pay for what the car is worth.
This is why exchanging the car is being offered at dealerships to make it convenient for the sellers at the same time making another sale. It sure saves a lot of time and effort. To decide whether to choose that or to sell it outside will depend on a lot of factors. Let us first understand the exchange process for your old used car.
Once you decide to exchange your used car at the dealership, you should take into consideration the following.
- To estimate the actual worth of your used car, you need to do at least the minimum of research work prior. You can calculate a fair estimate online through sites that offer the provision by filling in the basic details related to your car like the model name, year, city, km driven, brand and market demand of the particular vehicle, etc.
- Usually, the dealerships have their own team for assessing the car’s value. They take into account the car’s running condition and the extra accessories you might have like the leather seats, branded music system, a rearview camera, etc. Mechanical features are also evaluated like the car’s engine, drive train, gear-box, electronics, tyres, accident history, service record, etc. You can get your car estimated using their team as well.
- A test drive of the car will determine the flaws, the drive quality and the car’s maintenance and will be a big factor that finalises its pricing.
- Your car’s resale value also depends on the state where it is registered. Interstate registration can cut down the price by Rs 15000 to Rs 20000. Insurance is another factor that could affect the car’s value. Without a valid and updated insurance certificate, the price will go down a few more thousands for sure.
- After a complete assessment, the dealership will deduct this quoted price from the total cost of your new car. You can pay the rest of the price using your chosen financial means. With a no-objection certificate from the insurance company, you can sell your old car even with a pending loan on it.
- Your dealership can further arrange for financial help or you can seek out that on your own with loans from banks/NBFCs.
You can see from this that exchanging your car at a dealership is a pretty straightforward and convenient process. However, this does not give you the best price you would get on selling it outside to a private buyer. Despite the time and effort it consumes, selling outside is how you could get more options to get the value for your used car.
Evaluation of the price for selling it goes the same way as it does for exchanging it at the dealership. Some experts recommend selling your cars through dealers or brokers only if your car is more than 10 years old and you can get a good additional exchange bonus, or if you want an immediate liquidation price and does not worry about losing up to 5 – 10% from a fair value.
Which is better? Selling your outside or at a dealership?
It is pretty clear that when you are exchanging your car for a new one, you are compromising on the actual resale value you could obtain for it. Since the whole point of selling the old car is for monetary gains, selling it for a 10% lesser than for what you could get outside does not look like a logical choice.
Dealerships might offer you attractive exchange bonuses and discounts that may sound exciting but in reality, they would not equate the actual value you would receive from selling it to outside buyers.
It has become easier selling a car these days without difficulties with the documentation and legal formalities. Just always make sure to check the price for your old car and the exchange price before making a choice.