Stamp duty for cars explained
When you go to buy a new or used car, you will have to pay stamp duty. But what...
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If you’re one of those people who likes driving a hard bargain even more than they like driving a car, the process of upgrading to a new vehicle opens up all kinds of exciting opportunities. But where does the greatest value lie; trading in your car and getting the maximum return from a dealer, or selling privately and using the cash towards your new machine?
Are you likely to get more Mazda 3 trade-in value from a car dealer who’s desperate to do you a deal, and grab his commission by selling you a new car? Or are you better off selling your used Hyundai i30 on the open market and taking that cash into the dealer to drive yourself a bargain that way?
Obviously the resale value - what you’ll get selling a Toyota Corolla privately - and the Toyota Corolla trade-in value - what you’ll get from a dealer who’s trying to put you in a new one - are likely to be two different things.
Fortunately, when you want to get a car valuation estimate, a Hyundai Tuscon's trade-in value for example, you can check out these figures by using the CG Price Tool which will make the research part of the decision a lot easier, but there are other factors to consider.
Selling privately is clearly going to involve a lot more work on your part, as you’ll have to advertise your vehicle and go through the process of selling it - preparing your Kia Stinger for sale, for example, showing it to prospective buyers, potentially letting them test drive it and then negotiating the best price.
For people who love the cut and thrust of negotiating, this can be a lot of fun, but it’s definitely not for everybody, which makes the trade-in option more attractive, even if there’s a chance it won’t net you quite as much money.
And that is, essentially, the trade-off of trade-in value. A dealer will make the process easier, but it might cost you more than you’re willing to soak up. On the other hand, going private will cost you time. And time is money.
The other option, of course, is that you can sell your car to a used-car dealer, which might be attractive if you’re in a hurry or you need the cash, but it’s unlikely that the Ford Ranger trade-in value, for example, will be as high.
Even if you are considering selling privately, there’s no harm in at least hearing what a dealer would offer you and finding our what your Mazda CX-5’s trade-in value is.
Be sure to get your car properly cleaned and detailed before trying to negotiate a price, just as you would if you were selling privately. And the key word is “negotiate”, remember that a dealer’s first offer is just that, an offer, and they always have room to move. Also remember that you, as the seller/buyer are in a strong position and if you don’t like their offer, you can take your business, and your car, elsewhere.
Always remember that the dealer is likely to offer you anywhere up to 30 per cent less than he or she believes they can sell your car for later, and if it’s worth that much more, you might be able to get that figure for yourself.
Once you’ve got a price from the dealer, check our Price Tool and search for similar listings to see if you can do better privately. Then it simply becomes a question of how much convenience is worth to you - time vs money.
As is always the case, the newer, cleaner and straighter your car is - and the fewer kilometres it has on the clock - the better price you’re going to get.
It’s also worth considering getting an independent evaluation of the trade-in value of your car before you approach a dealer.
It’s also important, when negotiating, not to get too focused on the price your’e getting for your car, because what you really need to focus on over all is the changeover price - the amount you’re going to have to pay for your new car once the trade-in value of your car is deducted.
Let’s say you’re looking at a Mazda 3’s trade-in value, and you think it should be worth $15,000. The new car you want to buy is worth $30,000, or at least, that’s what it’s listed at. If the dealer says he can give you $12,000 for your car, but that the changeover price will be just $14,000, you’re still ahead, because he’s discounting your new car to meet you in the middle.
The fact is that some cars simply have better residual values than others, meaning a dealer will be confident he can sell your car for a good price, so he’ll be wiling to offer you more for it. A Toyota Corolla’s trade-in value will be different from a Kia Stinger’s trade-in value, for example, while a Mazda CX-5’s trade-in value will be different again. All the answers are on our Price Tool.
The more desirable the vehicle you’re selling, the better off you’ll be, so consider that when asking ‘how much is my car worth?'.