Trade Value Objection
Your customer came into the dealership hoping to find their next new vehicle. You scanned the vehicle into VAuto and touched base with the Used Car Manager for an appraisal. Unfortunately, the customers vehicle is not worth as much as they originally expected. You and your manager attempted to overcome the objection to put a deal together. The customer left without commiting to a deal due to their trade value being the main point of contention.
Your initial goal in this process is to contact the customer and thank them for taking the time to visit our dealership. Next we will want to highlight the positives in the showroom visit while still acknowledging that we were unable to meet the expectations of the customer’s trade value. From here we should continue the conversation surrounding the customer’s expectations and continue to attempt to come up with a solution.
Before making this call please meet with your Used Car Manager to review the trade number for your customer. You should be able to provide a number to your managers that would overcome the objection and result in a deal. If not, this number should be the focus of your conversation with the customer.
Thoughts:
When someone owns anything, it gains sentimental value. Think of your cell phone as a good option, it may have scratches on the screen or even a crack, but you would pay nearly retail to get it back should it be lost because it is your phone. It has contacts, messages, photos and memories associated with it. It’s even set up the way you want it set up.
The same thought process rings true for a customer’s vehicle. It’s their car, love it or hate it, it’s theirs and that holds so much more meaning to them. It’s also tied heavily into their financial situation. If they have no or a small payment, it may be difficult to part with while taking on a new payment. The goal here is to find out the customer’s expectations and settle on a number that works for everyone.
Types of Trade Value Objections:
“I got more for my trade online.”
They probably did. They probably entered their vehicle into KBB at excellent condition, and KBB went ahead and gave them a retail number. This is where you get to separate yourself from an online program and explain the realities surrounding the retail automotive world. Here’s a few responses to address this:
“Honestly Jake, that’s about what the car would be worth on my showroom floor. We still have to pay a technician to review the vehicle, fix anything on it that keeps it from being retail ready, detail, advertise the vehicle and then we get to re-sell it. What did you get as an online trade estimate?”
“We use a number of resources to come up with a value on your trade. We primarily use live auctions and the most current values from KBB and books like that. It’s more in depth than an online estimator. What did you come up with online?”
“I got more for my trade at another dealer.”
They did, did they? This is an awesome response, do not shy away from this one. They got better numbers, but they didn’t make a deal. Our goal is to flush out what number they were given, why they didn’t buy, and what their true expectations are. I’d address this with a few questions in this order:
“ Oh, how much did they offer you?”
“Was that what you were looking to get?”
“Did they offer you a discount on their car?”
“What stopped you from taking the deal?”
All that information is crucial for you and your manager to understand while responding and putting a deal together. The reason for the order for the question is to get to the last question so we can make sure we fix this mistake that the other dealership made if possible.
“I owe more on my trade is worth.”
Honestly, you should know this prior to the customer bringing it up from doing a proper interview. You should always present the payoff information during the time of the appraisal if possible. So this response calls to question the mutual understanding of what we’re looking to accomplish. Does the customer think that if they owe more on their vehicle than it’s worth it means they can’t trade it in? Or does this make the customer not want to do the deal? Our goal here is to figure this out then highlight the potential benefits of the deal. There are a lot of factors to this one, so if you’re uncomfortable with this objection consult a manager regarding your particular situation prior to responding. You should always continue the conversation in the same way:
“People trade in vehicles every day with negative equity, unless its a tremendous amount, it’s really not that big of a deal. How much do you still owe?”
From here we can see if the equity situation sours the idea of a deal or if the customer likes the vehicle they are looking to purchase enough to keep pursing the purchase. There are additional factors that go into the customer’s pay-off and you should explore and discuss this with your desk manager after you have a clear understanding of the customer’s position.
“I can get more if I sell it privately.”
They probably can, but they then have to become a dealership. This includes sitting on a vehicle until they find a buyer, doing the proper paperwork with the bank and DMV. They also have to go through the hassle of publishing their vehicle, discussing, and selling the value to the general public. Even after all of that, they would then lose the tax credit associate with a trade-in on their next purchase. That’s a whole lot, that’s why we do this for a living. Try to outline the situation to the customer of what that means and further the discussion by acknowledging this and beginning to discuss the topic:
“You might be able to, but with the way the car value changes on the market, you’ll want to move it really fast. Do you already have a buyer lined up?”
“I’d just hate to see you spend your time and go through all that and ending up right where we are right now.”
“I mean, we can proceed with the deal and if you want to sell it, you can do that on your own timeline. Either way we’d buy it from you later, you’d just lose your tax credit.”
Word Track:
“Hey Jake, thank you for coming in and spending some time with me yesterday. Have you put anymore thought into what you plan to do about your Camry?”
Thoughts:
Your response from here is going to depend on the customer response. But, this is a great place for you to flush out a firm value somewhere around the parameters your pre-owned manager has flushed out. This sounds like this:
Word Track:
“I get that you’re at 24 thousand, but I’m really trying to go to bat for you here and make you the best deal possible. What if I could get you to 22 thousand, do you think we could make that work?”