It’s well known that the used car buying process doesn’t start when a customer shows up at your dealership’s lot, and today’s customers are more prepared than ever with available information. When it comes to trade-ins, 4 out of 5 used car buyers will do some form of work to prepare for a trade-in. However, these prepared customers are twice as likely to turn down an offer. So how do you get around this?

How customers prepare for the trade

The most common way a customer gets ready to bring their car in for a trade appraisal isn’t research at all, it’s picking up those old fast-food bags and getting out the vacuum!

Among used car buyers who prepare for the trade-in process:

• 62% will do a deep clean of their car before it reaches your lot
• 53% will put some thought into what price they want on the trade-in
• 35% will finally get that oil change or fix that minor scratch or dent they’ve been putting off

TRENDING INSIGHT: Compared to Driving Insights research in 2018, your customers are putting more time and effort into prepping their trades to maximize the amount they can get for their vehicles.

 

How do customers decide on price?

The factor that most influences whether a customer will accept a trade-in offer is how much they think their car is worth. What are these expectations based on? Typically, it’s comparable listings that they research online.

Used car buyers who research their expected trade-in price do so by:

• Visiting their preferred listing site to find comparable vehicles (50%)
• Consulting friends and family for advice (29%)
• Going with their gut (26%)
• Getting an in-person trade-in appraisal (25%)
• Searching for vehicle values online (22%)

What about customers who haven’t prepared?

If 4 out of 5 buyers prepare for the trade-in process, that means there’s 20% of buyers that don’t. It may seem safe to assume that someone who prepares for their trade is more serious about transacting, but we found the opposite. Our research shows that someone who did prepare for the trade is more likely to sell or dispose of their car some other way other than a trade.

What should you do? 

Dealers should expect more informed customers armed with different sources of information who are likely anchored to a price walking through their doors. Most used car buyers will prepare for the trade-in process in some way, so ask what they did and acknowledge this work during your evaluation. For example, if the customer has cleaned out their car, don’t bring up, or de-emphasize the need for detailing.

If research into similar vehicle pricing and trade-in value was done, it’s time to collaborate with the customer. Match their process, start with the list price, even if it’s based on a fully reconditioned car on an online listing, then walk them down to a realistic trade-in offer while explaining the reasons behind the value difference. Remember, it’s the more prepared customers who are twice as likely to turn down your offer, so addressing and working with a customer’s preparation is essential.