- Retail value is what a prepared car might sell for on your forecourt. It is not what you should pay for it.
- Trade value is a wholesale figure for a car as it stands. It ignores your prep, your warranty and your days in stock.
- A part-exchange price has to leave room for both, or the new deal looks fine and the used car loses the money.
What is a retail value?
Retail value is an opinion of what a retail customer might pay for that car, prepared, described properly, and sitting on a forecourt. It includes the work you have not done yet: the service, the advisories, the valet, and the warranty you usually put with it.
Guides and trade tools publish retail figures from recent sales. Treat them as a range, not a promise. Your town, the car's history, and how many similar cars are already for sale all move the number.
If you pay retail, or close to it, you have bought yourself a job with no room to do the job.
What is a trade value?
Trade value is the wholesale end. It is what the car is worth to the trade as it stands, without your prep and without a retail customer attached.
It is the useful floor when you are unsure. If you would not want the car at the trade figure, you should not be stretching above it to win a deal. If a seller or a part-exchange customer needs more than you can make back, the honest answer is that the car does not fit.
Trade value is not an insult and it is not an opening gambit. It is a check against paying too much because the deal on the car you are selling looks good.
What is a part-exchange price?
A part-exchange price is an allowance against something you are selling. It has to do two jobs at once: feel fair to the customer, and leave you a car you can prep and sell at a profit.
Work it forwards from retail, not backwards from whatever allowance closes the deal:
- What will this car sell for on your forecourt, once it is honest and clean?
- What will prep, a service and any known advisories cost?
- What margin do you need after that, including how long it might sit?
- What is left is the most you can allow.
If that figure is below the trade guide, ask why you are above the market. If the customer needs more than that figure, change the car you are selling or let the deal go.
The part-exchange guide walks through that sum in the order you should do it on the day.
Which number do you say out loud?
Say the number you will stand by when the car is in front of you. Explain what it assumes: current MOT, the history you were shown, and no finance outstanding.
Customers can compare a retail screen price with your allowance and feel short-changed if you never explain the gap. The gap is your prep and your margin. Say that. It is easier than defending a number that moved between the phone call and the handover.
Common questions
Why is retail value higher than trade value?
Retail assumes the car is ready to sell to the public, with prep, warranty and a forecourt behind it. Trade value is closer to what another dealer would pay for the car as it sits.
Should I price a part exchange at trade value?
Use trade value as a sense check, not as the automatic offer. The right price is what you can sell the car for, after prep and a margin, in a sensible number of days.
Which price do I show a seller?
The price you will actually pay or allow, and what it assumes. Quoting a retail figure and then offering much less is how trust disappears.
See what the fees come to on the auction cost calculator, or try the live demo.
