Introduction
Trade in value refers to the value that a particular asset holds in a trade. Trade in value is generally used in reference to selling and buying of cars. When you sell your car to a dealer, the price that the dealer is willing to pay for the car is known as the trade in value of your vehicle. The trade in value quoted by the dealer is almost always lower than the market price of the car. This is because of the fact that the dealer further needs to spend money on repairing the car and bringing it to a condition where it can be sold with a warranty.
History
If you want to sell your car, then you are far better off selling it to a private party as this will fetch you a higher price. The trade in value of a vehicle is greatly reduced if the vehicle is sold to a dealer. However, most people ignore this depreciation in the price of a car for a number of reasons. One of the biggest reasons why people sell their cars to dealers is that the transaction is stress free. Finding a suitable third party is time consuming and cumbersome. Several parties may approach a car before it is finally sold off to a certain individual. Most people lack the patience and the business savvy that is required to make a sale. Thus they approach a dealer as the dealer offers an on the spot remuneration of the vehicle.
Features
Also, approaching a car dealer is an easier option if you want to exchange your vehicle for a new one. For example: A person owns a 1999 Honda Civic. That person wants to sell his Honda and buy a 2005 Mercedes C class. On approaching a dealer, the person finds out that the cost of the 2005 Mercedes C class is about fifteen thousand dollars. The dealer offers the person a bargain – he offers to sell the Mercedes for 11 thousand dollars in exchange for the 1999 Honda Civic. The four thousand dollars that the dealer shaved off the price of the Merc is the trade in value of the Honda. If the owner of the Honda would have sold it to a private party, then chances are that he (or she) would have found a better deal – both on the Honda as well as the Merc. But approaching a dealer made the process fast and hassle free.
Tips and comments
The concept of trade in value is not necessarily limited to the trade of cars alone. It can refer to any kind of goods. Exchange offers and discounts on home appliances and electronic goods rely on the trade in value of the goods that are exchanged. Often, there are exchange offers on watches. These offers enable the buyer to secure a discount on a new watch in exchange for an old one. Since watches do not have a great second hand market (like electronics goods or home appliances), this is a good bargain. The amount slashed off the original price of the new watch is considered to be the trade in value of the old watch. The same goes with the sale of all other items.
Comments
Most Recent Articles
-
What Does It Mean To Be Immunosuppressed?
Life is filled with all types of challenges. When it comes to health, all manner of diseases and conditions are a reality. When the body is weak and cannot fight the ‘enemies’ in...
