As we are constantly pointing out at MTI, used cars are not only extremely difficult for dealers to come by but prices are reaching boiling point. This of course means that customers will be expected to pay the uplift, which is fair enough it is what the market is dictating. Less fair, however, is that dealers are reaping massive profits from customer trade-ins, almost as much as they are from selling the car to them in the first place. Traditionally buyers have always been of the opinion that not only does the dealer make a profit from the sale of cars but also from the part-exchange. In recent years dealers, withthe increased competition, have been satisfied (and indeed budgeted) to break even on cars taken in which would not be re-sold by them on the retail market but sent to auction. That position has changed drastically this year with auctions reporting record profits for their vendors. Now obviously a lot of this is dictated by the market. We have seen common regular cars, which anyone in the trade would price similarly, go to auction and achieve hundreds if not thousands more than the SIV (stand in value). The fact that many companies are springing up offering to buy your car for cash is as a result of the dire lack of stock, and the fact that they have realised the public are still not wise to exactly how much they could get for their car.
Clearly, like anything, a car is only worth what someone is prepared to pay for it, but if there are companies intending to give sellers an easy route out of their car presumably they will be selling these cars on themselves to other dealers who cannot locate stock in the normal ways because it is so scarce and expensive. Do you see a pattern forming? If you are the owner of a car up to 5 years old and 60,000 miles with not more than 2 previous owners and a fairly solid service history, trust me there is a dealer out there who will want to buy it. So if you are going to need the proceeds to buy another car, ensure that you check the internet classifieds more than ever for similar models to yours and see what they are being advertised at.
Remember there will be dealers and private sellers out there so take an average view, also it is worth calling your local car auction who will charge a fee for entering your car but if dealers are selling your trade-ins for mega money why not try the same thing yourself. You will normally be able to get an indication of what your car could achieve. But if you don’t want the aggravation make sure you have all this information at hand before you approach the dealer for your next car and ensure you get top dollar for your old one.
If a decent car doesn’t sell in this market it won’t sell in any market!