As the demand for used cars rises over the coming months and years, used car valuation will become more important than ever in optimizing dealership operations. As a result, many dealerships are beginning to search for more consistent and repeatable methods for determining used car trade-in values.
As we shift toward a sharper focus on used car prices, however, we must not lose sight of the customer experience. Experience is at least as important as valuation in our industry today. And as you’ll see, both factors must be optimized in today’s automotive landscape.
In this article we’ll explore ways in which you can enhance the customer experience during the trade appraisal process. The trade-in process is often a confusing and disappointing experience for car buyers, and eliminating the friction around the trade-in should be the focus of every dealership.
Variances in used car prices are one of the key reasons why consumers are disenchanted with the car buying process, and creating a consistent valuation process will go a long way towards improving the overall trade-in experience.
Following are some best practices that will help you to engage with customers on their own terms to build confidence, trust, and loyalty - and to ultimately create value for both parties.
Transparency Is the Key to Used Car Trade-In Value
Transparency around used car trade-in value is essential in building trust and providing a great customer experience. When a consumer arrives at your dealership, you should assume they have done their research about the car they’re interested in buying.
You can also safely assume they have researched used car prices to find out what their trade might be worth. Unfortunately, the prices they have been exposed to online are likely out of line with the reality of a more detailed valuation.
Respect that your customer has tried to gain a solid understanding of their vehicle’s value, and invite them to join you on your walk around.
With the customer at your side, review the key factors that will likely impact its value. Explain your dealership’s appraisal procedures and the standard process for used car valuation that you follow. These steps will go a long way in building trust when you present their car’s final trade-in value.
Used Car Prices Are Not Consistent, But Your Process Should Be
Commit to a consistent trade-in process across your dealership, and stick to it. Every single time.
In addition to your Used Car Sales Manager, it’s important that your sales and BDC staff have a solid understanding of the process, as they are often responsible for communicating the valuation process and thereby setting the customer’s expectations.
Explain the specific factors that can impact used car prices and share market data that will validate your offer. A consistent process, based on objective facts and transparent communication, helps the customer feel confident and more secure about their trade-in value.
Improve Your Valuation Methodology
Used cars are as unique as the people who drive them. So when it comes to assessing a trade, remember to evaluate each unit on its own merit.
Enhance your process for assessing a car’s trade-in value by focusing on the individual car in front of you. Don’t rely strictly on industry averages, and don’t assume that a car has the same value as a similar car you’ve evaluated recently.
One car might have frame damage, the other might not. One might have been repaired and painted. A vehicle might arrive on your lot with major mechanical problems, while a similar looking vehicle may be in pristine condition.
One vehicle might be equipped with features that are in high demand in your local market, while another might lack the options that your customers really want.
The law of averages that dictates used car prices today is risky business. It’s your job to do a detailed inspection, evaluate each car as thoroughly as possible, and take into consideration the unique qualities of each vehicle on its own merit.
Simply put, the more consistent, repeatable, and transparent your approach to assigning a car’s trade-in value, the more likely your business is to succeed.