There’s a wise old saying which reminds us “a little knowledge is a dangerous thing.” This is particularly true when it comes to car shoppers.
You know the type. The customer strides confidently into your dealership armed with “expert information” about the value of the trade-in. Maybe he or she is clutching a printout from kbb.com, NADAguides.com or blackbook.com. In short, the customer plans to dictate – rather than negotiate – what you’ll give for the vehicle. So how do you deal with tough customers? And how do you use those pricing websites to your advantage?
Turning perception into reality.
When the customer is fixed on the wrong value for a trade-in, it’s up to you to shift his or her expectation back to the correct value. At this critical moment, you need information, not confrontation. The good news is that you have it at your fingertips, because you too can use the pricing websites the shopper visited to determine the value. But the difference is that you’ll work with the shopper to help determine the true trade-in value.
These “Tricks of the Trade-in” make it simple to put website pricing data to work for you.
Step 1: The Appraisal.
Ask the customer to show you the car for an appraisal. Walk around the vehicle together, taking specific notes about the vehicle’s condition, highlighting any flaws, dents or scratches. Next, open the trunk and inspect the spare tire. Also, be certain to make notes regarding the condition of the interior, the actual mileage and any other critical details that affect the vehicle’s value.
Step 2: The Profile.
Now it’s time to create a true profile of the vehicle’s worth. Be sure to keep the customer involved in this process, because together you will build the vehicle online using your notes and your knowledge. Bring the customer back to your desk, visit cars.com and click on the “Research” tab. Then go to the “Kelley Blue Book” section. At this point, it is extremely important to demonstrate to the customer how to accurately value his or her vehicle as a “trade-in” vs. a purchase. This is a simple step because Kelley Blue Book allows you to select “Trade-In Value” or “Retail Value.” Explain to the customer that the “Retail Value” includes the fees a dealer pays to prepare that vehicle for resale, including its reconditioning work. Once you clarify this vital difference, check-off all of the optional equipment for the vehicle and input the actual mileage. Also, make sure to check off everything that is right and wrong with the vehicle.
Step 3: The Value.
As you input the information, Kelley Blue Book automatically calculates the vehicle’s value under three ratings: “Fair,” “Good” or “Excellent” condition. In most cases, the customer rates the vehicle as “Excellent,” resulting in an inflated value. Very few vehicles are truly excellent. According to Kelley Blue Book, a vehicle has to be “exceptional” to be rated excellent. The body and interior must be free of ANY wear or visible defects. “Good” condition more appropriately characterizes most customer trade-ins. Kelley Blue Book states: “A ‘good’ vehicle will need some reconditioning to be sold at full retail price; however, any major reconditioning costs should be deducted from the value.”
By working with the customer to accurately input the vehicle information, together you will arrive at the appropriate vehicle condition rating and the most accurate vehicle valuation.
Using these “Tricks of the Trade-in” allows you to reset the customer’s thinking about the value of the trade-in. You included the customer in the process and used the pricing tools that he or she already trusts.