how does trading-in work?

You may have wondered whether it would be better to trade in your car or sell it yourself, advertise it or take it to some showroom to leave it on consignment. (See elsewhere on the pros and cons of consignment)

To understand the dynamics of Trading In, you need to understand the term “Over-Allowance”.

The Over-allowance is a term that refers to the amount they have to add to the purchase price to allow for them to pay you enough on your trade-in to make the deal possible.

Unbeknownst to you, the Over allowance might already be in play to allow for a cash-discount. The question is, what do you prefer, a good cash-discount after you trade-in your car, or no discount, but a better trade-in offer?

You could rather go to www.webuycars.co.za and sell your car cash and negotiate a better deal on the vehicle you are buying, because you are bringing a cash deposit instead of a trade in.

My advice is always to start the process with a cash deposit in mind and only then mention the trade-in possibly after you bargained for a cash discount on the advertised price.

Your comments on this would be appreciated, as I believe it is a tricky subject.

On some expensive vehicles the over-allowance built into the price may be as much as R50 000 on a vehicle of R750 000.