Search Close Menu

Dealer Ops

What's My Car Worth (Handling Trade-Ins)

I was recently at a family reunion and realized, again, how knowledgeable and wise my senior family members are. If you’re under 50, you're still considered one of the kids. The reason I’m mentioning this is because I was having a discussion about some of the new things out in today’s market and then my uncle flared up and said "Do you younger people think you invented everything?" He with several others started rhyming off a list of things that I thought were new but evidently have been around for a long time. The list had nothing to with computer stuff, mostly trends and patterns. The things they were saying made me feel foolish, as if younger people thought of and invented everything. It made me think about why some businesses and sales people do exceptional and some fail. There are many advantages to life experiences, age and wisdom. I have always had a great respect for anyone that is older than I, but now I have an even greater respect. My grandmother is ninety years young and always says, “this is the best meal I have ever had,”; “this has to the best party I’ve ever been too,”; “you look like you’ve lost weight?”; “that is a nice shirt, is it new?” and so on… She says these things to everyone. Who needs Anthony Robbins when you have Eva George.
We learn from experience and wisdom.
When I first started selling cars, I didn’t know anything about the business and of course had an excellent first two months in my new career. I did everything I was told by my management team. If a customer asked me what time it was, I would politely excuse myself and go and find out. If a customer asked me what the payments were going to be, I had no idea. If they asked me what the best price was, I really did not know. If I was asked what was my car worth, I really, really had no idea. This might all sound like old school BS, but I was new and did what I was told by my elders. The problem, I found after my first two months was I felt I needed to know more about everything, so that I could speed up the selling process for the customer. If they wanted to know what their car was worth I would give them an approximate value. I would give my customers everything they want, quickly and with no BS. Of course this would get me more deals, right…… WRONG.

Let’s get started with today’s sales meeting.
Who does all of your vehicle appraisals at the dealership?

That is correct, your sales management team does all appraisals of used vehicles. You do not. Why? Because it’s one part of their job description, not yours. That’s why they get paid the big bucks. Here is an example of why you can not tell the customer what you think their vehicle is worth. In this example the actual trade value of the customer’s vehicle is $5000.

Deliberate High Ball
Sales person tells the customer their vehicle is worth around $8000

In this scenario, of course, the customer will still listen to you and follow you all around the dealership. Because you’re the first sales person that has told them what they have been waiting to hear. They love you – for now. When it comes time to negotiate the deal, the deliberate high ball scenario will have a lot of explaining to do too salvage the deal.

Accidental Low Ball
The sales person tells the customer their vehicle is worth around $3000.

In this scenario the potential customer thinks you are rip off artist. They will not want to talk with you and when they leave will and do tell all of their friends what a joke you and your dealership are. When you do the accidental low balled you will not even get to a negotiation. In most cases, the customer will leave the dealership quickly, no deal.

Now that we understand why it is important not to tell the customer what we think their vehicle is worth. Let’s figure out how to handle the following scenarios.

Customers will always feel their trade is worth more than the current market value. Everyone wants retail for their vehicles when trading in, I know I do.

The following are word tracks you can use or modify them to your own style.

Scenario One
Customer says:
” Mr. Salesperson can you tell me what my car is worth”

Tell the customer:
“Yes I certainly can.”

Ask them what kind a vehicle it is and can they provide you with all the maintenance information etc. If it’s a late model (1997) or older vehicle or has high mileage

Tell the customer:
“It sounds like a good vehicle and I bet it’s in good shape, although I don’t know exactly how much it’s worth, right now. Would it be ok if you tell me what you are looking for in a new vehicle first and then I’ll get our vehicle appraiser to do a professional appraisal on your vehicle?

If this works, continue with your selling steps.

Scenario Two
Customer Says:
“What will you give me for my car?”

Your response:
“Mr. Customer, we have a vehicle appraiser who will be more than glad to appraise your vehicle, but first let’s find a vehicle you’re interested and then I’ll get your vehicle appraised, ASAP OK?”

Continue with your selling steps.

Scenario Three
If the customer is persistent and says A or B:
Customer Says:
A - “I want my car appraisal first before I look at any vehicles on your lot!”
B - “I need to know what you are going to give me for my car before I can make a decision on what car I can afford.”

Do not argue with them.
Your response:

“OK, no problem! Can I have your car key? I’ll also need your ownership, exact mileage, maintenance records and has the vehicle ever been in an accident?”

Also ask them;
“Mr. Customer can you tell me where your car is parked please?”

Your next step is to go to your manager’s office with all of this information and explain what you are doing with the customer. The objective here is to get back to your customer ASAP and continue with the vehicle selection, demo drive etc.... When you get back to your customer tell them:

“Ok Mr. Customer we are getting your vehicle appraised. It is going to take few minutes. So while we wait, what features are you looking for in your NEW vehicle?”

This will give you the opportunity to find a vehicle for the customer and then continue with your selling steps. In most cases, the manager will not do the appraisal immediately but this is not why you brought the appraisal to the manager. You brought the appraisal to your manager because that’s what the customer wanted. We do not want to fight or argue with this type of customer; we want to help them. Work with them not against. When you have found a vehicle, work out the difference number and close the sale.

Now the big question is;
When do we tell the customer what their vehicle is worth?

The answer is when they have picked a vehicle from our stock and want our vehicle rather than their present one. This may sound like old school but it works. I’ve said it before in my sales meetings … Timing and Patience.

What I’ve shown you today is what most of you get told everyday from your sales managers, which is pick a vehicle and then I’ll do your customers trade appraisal. The reason why is because it comes from many years of experience, age and wisdom. Just like the best sales people and businesses have a strategic game plan - well thought out, well oiled, well practiced and rehearsed. Every angle has been covered, even a retreat and reorganize contingency has been put into place.

We learn from experience, it really works.

Darin’s Wrap-up
Today’s sales meeting is hard to put on paper and some other systems do work but at the very least I hope you have received a couple of ideas to work with. I know it will give you something to think about the next time someone ask you “What’s my car worth?”



COVID-19 Market Update

Here is a quick recap of the news from the last week in July: Wholesale prices, fueled by...

Black Book recently published an update to their COVID-19 Market Updates, including BEV sales, wholesale prices, retail listing prices, wholesale volume, used retail listing volume, and new vehicle sales.


Economic Recovery Begins with Behavior

The auto market appears to be showing signs of recovery, but it’s too early to tell how far the...

The auto market appears to be showing signs of recovery, but it’s too early to tell how far the recovery will go in the short term, and it’s more critical than ever to keep up with the changing perceptions of the industry.


Pre-Approved? Think Twice

Claims adjuster shares a true story of unintentional deceit and offers a warning of an issue...

Claims adjuster shares a true story of unintentional deceit and offers a warning of an issue that happens in dealerships across the country.


COVID-19 Market Updates

Black Book recently published an update to their COVID-19 Market Updates, which includes these...

Black Book recently published an update to their COVID-19 Market Updates, which includes these highlights from the last week: wholesale prices, retail listing prices, overall wholesale prices, seasonally adjusted retention index, wholesale volume, and used retail listing volume.