Should you part exchange your car or sell it privately?

When it comes to looking for a new vehicle, aside from what your next car will be and how you’re going to finance it, an important question to answer is what to do with your old one. 

Do you part exchange it to knock some money off the price of your new car? Or do you sell it privately for cash? 

Well, if you’re currently deciding, this guide will help you make the right decision for you. Firstly, though, it’s important to understand what we mean by part exchanging your car. 

What is part exchange?

Part exchanging is where you trade in your current vehicle for a new one. If there’s equity in the vehicle – whereby the car is worth more than any outstanding finance against it – then it can be used as a deposit to lower the cost of your new car. 

Should You Part Exchange Your Car Or Sell It Privately

Most people who part exchange their vehicle decide to do so because it’s simple, quick and doesn’t involve selling their car privately – which can take weeks or even months. 

When can I part exchange my car? 

As long as your car isn’t on a personal contract hire agreement (a lease), you can part exchange your vehicle at any time. 

If it’s leased, it’s not yours to sell – which is why you can’t part exchange it. However, if it’s on any other form of finance, or you own it outright, then you’re free to trade it in when you like. 

When can I sell my car privately? 

You can sell your car privately at any time, as long as you’re the legal owner. That means there’s no finance against the vehicle or any outstanding debt. 

It’s illegal to knowingly sell a vehicle privately with outstanding finance without first making the buyer aware. 

advantages and disadvantages of selling a car privately

If you wish to sell your car privately and there’s still finance outstanding on it – no matter how small – you have to pay it off first. 

You can do this by contacting your lender and requesting a settlement figure. Once you have that, you can clear the finance and sell it. 

Can I part exchange my car if it’s on finance?

Yes, you can part exchange your car if it’s on finance – as long as it’s not leased. 

That’s because the dealership will use the money they’re paying you to clear any outstanding finance first. 

For example, if your vehicle is worth £7,000 and you still owe £5,000 on finance, when you part exchange your car, the dealer will use the first £5,000 of your vehicle’s value to settle your finance – cutting all ties between you and it. 

Then the remaining £2,000 can be used a deposit on your new car. 

Can I part exchange my car if it’s worth less than my finance? 

Yes, even if your car is worth less than what you still owe on finance, you can part exchange it. 

In this situation, the vehicle’s value will be used to pay off as much of the outstanding debt as possible; then, the remainder would be down to you to settle. 

At this point, you can either add it to your new finance agreement and pay a bit more each month. Or, if you have the means, you can settle the remaining balance before you start your new contract. 

Can I part exchange my car if it’s worth more than my new one? 

Sometimes you may find that the car you’re currently driving is worth more than the one you want next. 

That could be the case if you’re driving a rare vehicle or you’re purposefully trying to reduce costs. 

advantages and disadvantage of part exchanging a car

If this happens, you can still part exchange your car. The value of your current vehicle will cover the entire cost of your new one – meaning you own it outright from the beginning – and the money left over will be transferred into your bank. 

You can then spend it however you see fit. 

Will I get more money if I sell my car privately? 

Typically, you can get more money for your car if you sell it privately. However, that’s not always the case. 

If you have to wait months to sell your vehicle – which is quite common – it’ll drop in value. And you may find that you could’ve got the same amount or even more had you initially part exchanged it – and avoided the hassle of selling it privately. 

Also, you’ll likely have to pay for advertising if you want to sell it fast, which will eat into the money you make from not part exchanging. 

How long should I wait before trading in my car? 

There’s no magic period to wait before trading in your car. However, it’s always advised not to do it too early or too late. 

If you trade-in your car not long after you’ve financed or bought it, you’ll find that you won’t get back what you paid for it. 

That’s because vehicles lose value as soon as a new owner is added to the logbook, and also, if it’s on finance, you won’t have made enough payments to counteract the interest. 

If you do trade your car in shortly after taking out a finance agreement, you’ll most likely find yourself in negative equity – which is where you owe more on finance than the car is worth. 

And although you’re free to part exchange your car at this point, it’s advised against doing so because you’ll either have to make a large upfront payment to clear the extra debt or have much higher payments on your next car. 

Similar logic sits behind waiting too long to trade your car in. Unless it’s on its last legs and you’ve got every mile out of it, the car will likely be worth more to you than it is to a dealer, and you may be left disappointed with the valuation. 

Swapping every two to four years is the norm, although depending on the type of finance agreement you’re on, you may find that two years is even too early to escape negative equity. 

Advantages & disadvantages of part exchanging your car

If you’re thinking of part exchanging your car, it’s important to understand – like any decision – it comes with advantages and disadvantages. We’ve listed them below. 

Advantages of part exchange 

  • Hassle-free process
  • Usually much faster than selling privately
  • Can part exchange your car at any time
  • Can swap your car even if you have outstanding finance – as long as it’s not leased
  • Can use your car a deposit on a new one

Disadvantages of part exchange 

  • Can get more money for your car if you sell privately

Advantages & disadvantages of selling your car privately

Just like if you choose to part exchange your car, selling it privately also comes with advantages and disadvantages. 

Advantages of selling your car privately

  • You can usually get more for it than if you part exchange
  • You can keep your vehicle even if you get a new one

Disadvantages of selling your car privately

  • Have to advertise the vehicle yourself – which can cost
  • It can take a long time to sell your car
  • May have to deal with timewasters and hagglers

Can I part exchange my car? 

If you’re thinking about part exchanging your car, it’s easy to find out if you can. 

Car salesman handing keys over

Here at Zero Deposit Car Leasing, we accept all part exchanges. And we can give you a free, no-obligation valuation in minutes. 

Just click here, send us your vehicle details, and we’ll send you a valuation.

Should I part exchange my car or sell it privately? 

Only you know if you should part exchange your car or sell it privately. You have to make the best decision for your circumstances. 

However, whatever you decide, we’re here to help. 

If you decide to part exchange your vehicle with us, we’ll always give you the best price possible. And, of course, help you find your next perfect car. 

If you don’t, we’re still here to help you find your dream car. And because all our deals come with a £0 deposit, it means you can spend the cash you’ve raised on something else – which may be better for your circumstances.