You have been thinking of selling your second-hand car and have started your due diligence of shortlisting potential replacements. And then it happens. You see ‘THE ONE’ and fall hopelessly in love! It ticks all the right boxes: size, fuel economy, mileage, safety, colour etc. And suddenly you can’t get rid of your old car quickly enough. “Out with the old and in with the new.” The dealer advises you to bring in your pre-loved vehicle for a trade-in valuation. Trading in your car key seems the most obvious and hassle-free solution.
But is trading in your second-hand car really the best option on the table?
There is niggle at the back of your mind that suggests perhaps there are other alternatives to selling your car and getting a better deal.
Before you make up your mind, let’s break down how car trade-ins work in South Africa and outline the pros and cons.
How car trade-ins work in South Africa:
We’ve already established that you have fallen in love with a new car at a local dealership. You decide a trade-in makes sense and so you accept the dealer’s (one and only) trade-in offer on your second-hand car. You then apply that offered price as a credit towards the purchase of the new car you have your heart set on from the dealer. (You may not have to pay in, but it is generally the scenario).
The dealer then sorts out all the paperwork needed to buy your second-hand vehicle and sell you the car of your dreams. Deal done! (You are a bit more in debt than you had hoped to be but hey, that is the reality of trading in your car and buying a new one).
Pros of trading in your car:
If you are looking for a quick and easy deal, then trading in your car can be a viable option.
- Selling your car can be a logistical nightmare and so a car trade-in is really simple, with the deal typically done and dusted in a few days. (If all your paperwork is in order).
- Once you accept the trade-in offer, you are guaranteed a set price for your second-hand car which the dealer is prepared to pay. This amount will be offset against the new car you have set your heart on. A payment plan (with interest) is then put in place to cover the difference.
- You are not responsible for any admin except to sign on the dotted line. All the paperwork is handled by the dealership in question.
Cons of trading in your car:
With everything in life, there are pros and cons. So let’s be transparent and disclose the cons of car trade-ins and then you get to decide.
- When trading in your car – besides choosing the car you want to buy – you are not in control of the process; your negotiating power or leverage is minimal. And as you are now emotionally invested in the new car on the showroom floor, you are inclined to sell for the lower-than-expected amount the dealer offers you just so the deal can go through and you can drive off in your new wheels. (You are not yet thinking of the further debt you have got yourself into).
- The sales executive offers one indicative trade-in value for your second-hand car with the clear understanding that you “take it or leave it.” (Remember, a dealer needs to make a profit on this deal and will significantly mark up your second-hand car. You are in effect paying for this when you trade in your car.)
- If reason does take hold of you and you decide to “leave it,” you then have to start the process all over again at another dealership. And that will potentially mean saying goodbye to the car you have fallen in love with. (Bummer!)
Or do you?
As we mentioned before, perhaps car trade-ins are not all they are made out to and perhaps you can get a better deal by selling your car on a simple, and innovative online platform like Weelee where you are guaranteed the best deal, (thanks to 1000s of pre-approved dealers who will bid on your second-hand car over a 24-hour period), leaving you with more money in your pocket and more negotiating power when buying the car of your dreams.
Sounds like a win-win solution.
