How to Eliminate Your Customers' Biggest Trade-in Objection
Every salesperson can attest to how difficult it can be to overcome the trade-in objection. More often than not, the customer’s vehicle isn’t worth as much as they think it is. Car buyers may already be wary about making such a large purchase, so when you appraise their vehicle at $2,000 less than what they believe it’s worth, there’s a good chance that customer will walk.
Most sales managers have been trained on how to handle this objection. But the best way to overcome it is to simply eliminate it by addressing it early in the process. Not just early in the appointment, either — early in the car-buying process, preferably before the customer even comes in for an appointment.
With the multitudes of trade-in valuation tools on the internet today, there is no benefit to waiting until the last minute to bring up a customer’s trade-in valuation, which is why you should be providing that information up front. If you wait too long to provide the information, the shopper will go somewhere else to get it. And that somewhere else may be your competitor’s website.
Providing trade-in valuation up front doesn’t mean you’ll stop customers from shopping around, but you’ll find that helping them at a time when they’re looking for more information is far more likely to benefit than hurt you.
Up-front valuations create opportunities
Providing a trade-in valuation to a customer up front creates several significant opportunities for your dealership:
- Better leads
- Increased trust
- More inventory
The trend today is to sell a higher volume of vehicles at a lower gross. For this strategy to be successful, you need a lot of pre-owned inventory — and leads. But you don’t have to wait for the leads to come to you. Instead, find them in your own DMS and market to them. According to our internal data, 68% of vehicle owners with 60-month loans traded up just three years into the loan.
What if I lose money?
There’s a fear that giving an appraisal over the phone will result in paying too much for a vehicle. It’s an understandable fear, but not warranted. A study by CARPHORIA of nearly 20,000 lease and sale records discovered that engaging consumers early in the car-buying process and providing them with a realistic value increased the average gross profit per deal by $785.
Maintaining gross is not only possible, but highly probable, with the combination of the right technology and the right process. In addition to a good trade-in valuation tool, however, your dealership also needs a solid process for converting these leads into appointments.
That’s why lead follow-up is so critical. In summary, the earlier you address trade-in valuations in the car-buying process, the more likely you will be to eliminate the dreaded trade-in objection. Making this process as honest and transparent as possible is the best way to ensure your dealership will get more leads, pre-owned inventory, and — ultimately — gross profit.
With more than 15 years of experience in interactive media, information technology, and digital sales, Dan Lee’s expertise lies in leading product management and software sales engineering for dealers. Born and raised in the Pacific Northwest, Dan has spent time traveling around the entire world via submarine during his eight-year service in the U.S. Navy. In his current role as product manager of service solutions at AutoLoop, Dan keeps the engineering team focused on building products that add unique value to dealers. When not at AutoLoop, Dan enjoys concerts, playing guitar, and visiting the beach.