In with the new and out with the old

So, you’ve been eyeing that new ride at the showroom for awhile now. You’ve read about it, test driven it and introduced it to your Chief Financial Officer (aka Wife) who has nodded her approval. What’s left to do but sign on the sales agreement? Then you hit the brakes when the salesperson gives you his ‘best’ offer for your old car. You think to yourself that your old faithful can fetch a better price than that. You might just be right.

In this article, we will explore the ways to get a better trade-in value for your old car without shady dealings with secondhand car dealers or falling victim to unscrupulous car salesmen.

Last December when the economy started crumbling, repercussions were felt throughout the world’s different industries. One of the hardest hit was the car trade. Consumers were afraid to invest in a new set of wheels fearing the sudden loss of their jobs due to severe cost cutting by large corporations. Nobody was buying cars and car malls all over Singapore that are usually packed on weekends were doing convincing impressions of a ghostown.

Due to the lack of demand for secondhand cars, dealers were offering ridiculously low prices for trade-in cars which led to a self-perpetuating problem. Consumers were unable to let go of their old cars without suffering a huge financial loss and thus unwilling to purchase new cars. LTA’s recent efforts to resuscitate the used car market by reducing the number of COEs available has helped raise used car sales slightly. Thus improving trade-in prices for motorists but is it enough?

Undercover

To find out which showrooms offers the best trade-in amount, this journalist visited several showrooms posing as a potential customer shopping for a new set of wheels for Mum. Were the theatrics necessary? Well as much as it grates on my conscience to pose as a potential customer (having been a car salesman myself), it was necessary to ensure the best trade-in price that any man on the street would get and not an inflated quotation for a motoring journalist.

The values above do vary by quite a large margin due to the expected delivery dates of the new car. So depending on the period, your car’s value will have to be recalculated based on thenew car’s delivery date due to depreciation of your used car. In other words, the longer you wait to sell your old heap, the more you lose over time. Besides the depreciation, the car’s price is affected by other factors as well.

Before I go any further, I should explain that what overtrade really means is that on top of the loan amount you take for the new car, an additional $3,000(for example) will be added to the loan amount to help raise your used car’s value. Although you get a higher used car price, in the end you’re just borrowing from the bank through an indirect method.

Personally I expected BMW to give a higher trade-in amount considering that luxury marques usually offer a higher quote for a customer’s used car. Unconvinced that $37,000 was the best I could get, I decided to look for alternatives that would offer a higher value.

I decided to give Quotz a try. Quotz uses an online bidding concept to get the best price for car owners. Details of your car are recorded and then put online where 150 used car dealers can bid for your car. So I engaged Quotz to put their bidding concept to the test.