thegarageblog.co.uk : Pity the poor car dealer for a change at part-exchange time.

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Whatever image you might have of the tradidional used car dealer, you can be sure that there’ll be references to ‘Arthur Daley’ and visions of sheepskin coat clad, Rolex-wearing characters that speak in rhyming slang. Everyone has a tale of how they (or someone they know) was ‘ripped-off’ by a dodgy saleman who flogged them a duff car and then disappeared. Unfortunately, such characters and their crooked ways have tainted the image of the used car dealer, who is often just an normal chap (or lady) trying to make an honest crust. Sure, some of them might live in a mansion that’d make a Premiership footballer jealous and are dripping with more gold than F. Hinds, but many of them have the same financial struggles as everyone else and simply choose to make their living by buying something at one price and selling it for a higher price.

At the other end of the scale is the Franchised Dealer, where the new cars sit in a glass showroom surrounded by salesmen and the used cars sit outside in neat rows, tailgates up and inflated prices on the windscreen. Making used cars like new’ is the slogan of one manufacturers scheme and in price, they’re not far from the truth.

Imagine you’re going to buy a car and having a Sunday afternoon trawl of the local industrial park where the dealers are all located. You’re driving the car that you hope to part-exchange for a top price. Just as the car salesman will want to get you into the unsold model he’s had on the forecourt for the last month, your own motives for changing could be just as sinister! In past times, the process was roughly as follows:

You walk up and down the row of used cars until spotted by a salesman, who then moves-in for the kill.
Despite you wanting a certain car, they’ll almost certainly have different ideas and will ’steer’ you towards the car that they want you to buy.
If their powers of persuasion are great enough, a deal will be struck and then you’ll perhaps venture inside for a coffee and a chat ‘about figures’ with the salesman.
You’ll mention that you wish to part-exchange your old car so the salesman will take a quick walk around it, have a thumb through his Glass’s Guide ‘Bible’ and will arrive at an amount that’s usually about half of what you thought it was worth.
You’ll ‘negotiate’ a bit and will eventually agree a deal where he gives you a few hundred more for your car and maybe grudgingly throws in a set of ‘flaps and mats’ (that’s floormats and mudflaps) to ease your pain.
With deal agreed, order signed and deposit paid (thanks Mastercard!), you agree a date to ‘do the change’ and drive off in your old banger for one of its last journeys in your hands.

Ah, that old car of yours – it’s been a faithful companion over the years but is getting a bit temperamental these days and a few bits and pieces aren’t working anymore. It’s a good job the salesman didn’t have a real thorough look over, or a test drive as he might have offered you even less. You know it’s been overdue a service and timing belt change for the last year but as you were just going to ‘chop it in’, there didn’t seem much point in spending the £500. Likewise, the air conditioning stopped working back in the summer of 2006 but once you found out it’d cost £600 for a new compressor, you decided not to bother as at least the windows still opened. Well, as of last week when the driver’s window stopped opening (as the rear passenger one did a year ago) it hardly seemed worth the £300 to replace both mechanisms. As for that annoying knocking noise when you turn a corner, that’s just a knackered CV joint that would’ve needed doing for the next MOT (which incidently is due next month) so budget on another £200 or so.

A quick mental tally and you see that if you were to keep your car is reasonable order, you’d be looking to spend at least £1600 on it. The fact that the dealer offered you a rock-bottom price reflects the fact that he knows that your old car is not worth very much to him at all. Contrary to popular belief, you’re not going to see it on their forecourt the next week for £2000 more that they gave you for it. It’s more likely to be sold ‘to the trade’ either through auction, or via one of the ‘dealer to dealer’ remarketing services, at probably less than the salesman gave you for it. He’s already had his profit in the car he sold you, as well as the small comission from the finance company for signing you up for 4 years at £300 a month. That’s why he didn’t need to look at your old car too closely as it was really just to get the deal that he offered to buy it at all.

A different story is the small, independent trader working from his home. He’ll be working on a much smaller profit margin on the car he’s selling, in order that he can undercut the main dealers for your business. To him, the condition of your part-exchange is more critical as the deal still needs to be competitive enough, but he doesn’t want to get lumbered with an unsellable car that he paid too much for. In our workshop, we do repairs for a couple of local traders and whilst sometimes they’ll take a lovingly-maintained car in part-ex that needs nothing more than a polish to make them £1000 profit, quite often it;s the other extreme and they end-up losing a fortune on the deal through not properly evaluating the car and trusting the honesty of the owner.

A very tidy looking Mercedes estate that just ‘runs a bit rough – probably needs some new plugs’ ended up having a cracked cylinder head. Gasket replacement and welding repairs costing nearly £800, or ALL of the profit n the original deal. Last week, a tidy looking Alfa Romeo GTV ended almost £1000 spending on it, just to make it worth the £1500 it’d be worth in good order with an MOT.

With cars becoming ever more complex, the risk of a dealer being ’stitched-up’ with someone’s part-exchange that needs a small fortune sending is pretty high if the car is not appraised properly when valuing it. A glowing yellow ‘check engine’ light on the dashboard probably doesn’t just ‘need resetting on a computer’ as it’s more likely caused by a failed EGR valve, camshaft sensor throttle body or worn-out catalytic converter that can cost up to £500 to fix. Air conditioning that isn’t ice-cold probably doesn’t ‘just need a regas’ as if it did, the owner would’ve probably spent the £45 a couple of years ago instead of driving around in summer sweating like a Scouser in Dixons (thanks www.urbandictionary.com). That stuck electric window is more likely to be a £280 regulator mechanism (yes, Renault Laguna) than a £15 switch and that little knocking noise from the back is more likely to be collapsed rear subframe bushes at £300 than ’something loose in the boot’.

The simple fact is that someone has to be the loser in all of this, and you can bet it isn’t normally the car dealer. If your car is knackered and needs a fortune spent to make it sellable again, you’ll just have to accept what you’re been offered for it and ‘bite the bullet’. Someone’s going to have to pay for all those things to be fixed in order for the car to find a new home. There’s plenty of other used cars for sale that have been lovingly maintained and have had no expense-spared by their owners. These are the ones that you can expect the traders to be fighting over. It’s not uncommon for a trder to pay well ‘over book’ for a well maintained example of a popular car, knowing they’ll have no trouble selling it and won’t have to spend a fortune in repairs.

If you really want to change your car, and can’t be bothered to get everything fixed first, you’d better take the low price you’re offered, or try and find an easily-distracted and partially sighted and/or hearing impaired salesman that’s in a rush to go home on a rainy Friday afternoon, on the last day of the month before their bonus is calculated.