If you want to win more trades, you need to know exactly what makes a buyer reject or accept a deal. Today’s used car buyers seem to be accepting offers more frequently, but that’s not completely the case; 31% of them who go through the trade-in process will turn down one or more offers. So, why are nearly one-third of your customers turning down trade-in offers, and how can you turn it around on the next deal?
What drives a buyer to reject your offer?
The top reasons to turn down a trade shouldn’t be a big surprise, but stay with us, there’s a lot more to the story.
When a customer turns down a trade-in offer, it’s because:
- The offer was lower than expected (53%)
- They got a better offer somewhere else (40%)
- They believed the offer was not well thought out or justified (32%)
TRENDING INSIGHT: Customers receiving a better offer elsewhere jumped up 17% since 2018, which isn’t surprising since used inventory has become more limited leading dealerships to compete harder for units by offering better deals. Don’t be surprised if this number declines as inventory begins to normalize.
Then why do they accept?
Where the story does get surprising is when we asked the opposite - what made a customer accept a trade-in offer? It turns out that, while a low trade-in value can lead to rejection, just simply offering a higher price isn’t the path to winning the trade.
For used car customers who accepted a trade:
- 49% said they did so because the dealer had the vehicle they wanted to buy
- 38% said the offer matched how much they expected
- 22% said they trusted the information the salesperson gave to them.
An offer that is below expectations can kill a trade, but winning a trade is more about the customer getting the used vehicle they want and feeling as though the price and trade process were acceptable.
How can this help you?
Winning a trade, and likely the sale that goes with it, isn’t always about pumping up a trade-in value. The first step towards winning the trade is ensuring the customer has their heart set on the vehicle you’re selling. With the used market being more competitive due to limited inventory, if the customer understands the reasons why your vehicle is unique and they won’t find a better one anywhere else, you’re already half-way to winning the trade. Your customers know inventory is low, so use that same logic once they’ve found the used vehicle that matches what they’re looking for: if there are fewer options out there, shopping around for trade-in values will most likely result in them to missing out on the car they like.
With the customer sold on their next car, you then need to create a trade-in process that manages their price expectations in a trustworthy manner. We already know how to do this because we know how used car buyers prepare for the trade-in process. This effect is so strong that 47% of used car buyers will accept a trade-in value that is lower than expected because they fell in love with the car. Winning trades is about justifying the value that they’re receiving for their trade-in, and showing them how you got to that number. Take the extra time, use third-party tool to validate your offer, and shift away from wrapping up the trade-in quickly to justifying the price and making the customer comfortable with it.