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Guide for selling your old car and buying a new one

Getting a bit tired of your current car? Your old car might be fine to drive, but that two-seater isn’t going to cut it when a bub’s on the way. Maybe the gas guzzler is ready for the heave-ho now that electric vehicles are stealing the spotlight. No matter what your reason is, if you don’t need to keep your previous car, you can sell it and use the proceeds to fund a new one. Here’s how to sell your old car while buying a new one.

How much is your old car worth?

We all know that driving a car off the showroom floor knocks 20% off the resale price. This is known as depreciation. Before buying or selling, you need to know how much value your car has already lost due to age, wear and tear, and other factors such as market forces. You can look up equivalent models on classifieds sites to see how much they are selling for. Next, is deciding how to sell your car for top dollar.

Buying a car and selling your old one is two different transactions

Convenience always comes at a price. Just like how a 7-Eleven sells bread at twice the markup as a supermarket – you’re paying for the convenience. Likewise when it comes to a trade-in at a dealership. Though you may just want to trade-in and be done with it, you can get 15 to 20% more if you sell privately. You can add even more value by detailing your car, fixing up scrapes and dents, ensuring the rego is up to date, and getting a roadworthy certificate. You need to approach both events as separate actions, requiring separate negotiation.

Your deposit and pre-approval

Once you have sold your vehicle, you can put that toward a deposit on a new car. You may have to take the train or bus for a week or two, but a little pain is worth the long-term gain. After the sale, you should get pre-approved for a car loan from a car loan broker. This will give you a price limit – though you could theoretically spend that plus the sale money from your old car. However, having a deposit will give you an advantage when it comes to loans – you won’t have to borrow as much and you won’t pay as much back in interest. The pre-approval gives you an upper hand in negotiation, as a dealer has to meet your limit or you walk away. You can get an even better bargaining position by timing your purchase.

Timing your sale and purchase

You should time your sale before or after EOFY (end of financial year) or the end of year when dealers are having runouts – and time your purchase at those times. You can drive a harder bargain as dealers are keen to get rid of their old stock. If you can’t wait, visit them during the week at the end of the month, as they have nothing but their quota to fill! This way, you can drive away with a new car at a minimum while selling your car for a maximum!

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