When buying a new car, It’s crucial to grasp a concept that often goes unnoticed but can significantly impact your car purchase: Dealers offering over-allowance on your part exchange.

Whilst comparing part exchange figures is how most people seem to judge a deal, you should be focusing on the bigger picture.

In this blog post, we will unravel the concept of over-allowance and guide you to secure a more straightforward. And beneficial deal

Overallowance is a strategic approach that some dealerships employ when you trade in your old vehicle for a new one. It hinges on how the financial aspects are presented to you. Traditionally, buyers believe informing dealers they are paying in cash will lead to a better deal. However, that’s not the case.

What can potentially lead to a better deal is excluding your part exchange from the negotiation process or, at the very least, postponing it initially. Some dealers, eager to earn your business and prevent you from exploring other options, might offer you more for your old car than its market value.

Illustrating with a Simple Example

Let’s clarify this with a straightforward example:

Imagine two identical cars and two different dealerships.

So which is the better deal?

The simplistic point of view is that dealer number 2, whose overall deal is £500, is better off for you.

But let’s assume you can get £11500 for your car from a car buying site, and now it could look like this.

Selling Separately for a Better Deal

So now, dealer number 1 is the better option, and you’ve saved £1000. Assuming, of course, you can get at least £11500, which is £500 less than dealer number 1 offered in part exchange.

So, what’s the best way to make this simple from the start? Well, don’t bother mentioning your part exchange until you’ve found a dealer willing to do the best deal.

Only then offer the part exchange. You’ll now get that dealer’s actual valuation, and you can then challenge us to get you a better price, simple. Fill in the form or learn more