Why Dealers Should Stop Relying Only on Auto Trade-In Tools8 min read
Trade-in tools are great for nudging customers down the sales funnel. But when dealers try to do too much with them, they can actually become a detraction from converting leads to drivers.
Check any car dealer’s website, and you’re likely to find an aut0 trade-in tool. Recent studies suggest 1 in 3 vehicle purchases are at least partially paid for with the trade-in of a used car, so customers looking for a new car definitely benefit from them.
WHY DEALERS SHOULD STOP RELYING ONLY ON AUTO TRADE-IN TOOLS
Dealerships use trade-in value estimator tools on their websites to spike interest in customers at the top middle and bottom of the sales funnel, and can even motivate online window-shoppers to come through your dealership doors to get behind the wheel.
These trade value tools are good at generating new leads, however, when it comes to interactive web features, they’re often the only auto trade-in tools on an auto dealership’s website to inspire engagement from shoppers.
Auto dealerships today must view trade-in tools as part of a larger web experience designed to put customers at ease and help to lead them into your showroom. To get a better idea of why and how to pull this off, we talked to Dave Hazel of Larry H. Miller Ford in Salt Lake City, Utah, and Chris Thomas of Krieger Ford in Columbus, Ohio.
Some Trade Tools Ask Too Much
Trade-in tools work by collecting information about the shopper’s current vehicle and return an estimate of the trade-in value to give consumers a better idea of their actual final price for a car. But, like a talented sales professional knows, it’s often best to keep it simple.
Piling on unnecessary information — or asking for lots of details that aren’t necessary to give the trade estimate — can overwhelm the customer or scare them off completely.
Dave Hazel explains that this may be due to misconceptions about auto sales professionals or even bad experiences the shopper had at a dealership previously. But, Hazel says to avoid coming off as being dishonest or overzealous, keep a code of truthfulness.
“I’m a firm believer in truth, honesty, and transparency, and if you convey that in your trade tool, it’s effective,” he said. “But when you start being dishonest, it’s a problem. Millennials especially value honesty, and the tools online must represent who you are as a dealership.”
Some Trade Tools Set False Expectations
Another reason an auto trade-in tool alone isn’t enough to inform online auto shoppers, Hazel explains, is that they may set unrealistic expectations for trade-in values that don’t match reality when a shopper arrives at a dealership.
This may be because certain facts about the car are unknown, or because of other factors. He even referred to seeing other dealers manipulating leads by setting their tools to give a higher value for trade-in, while simultaneously marking up the price of the car the customer is buying.
“There’s already a misconception about car salespeople being dishonest,” he says. “Then, when a pragmatic customer sees an inflated trade-in estimate they know is unrealistic, they just think ‘Okay, that’s not accurate,’ and you lose their business.”
On the other end of the spectrum, if an auto trade-in tool tries to be too specific it can create problems as well. A trade-in tool is just that: a tool. It can’t act as a replacement for an in-person visit, but even Hazel says they provide a video explaining that the trade value given is only a “rough estimate.” Chris Thomas went on to explained how and why there is a limit to a trade-in tool’s accuracy.
“The value of a vehicle is based on really subjective information,” he says. “This isn’t basic information like make, model, or mileage. The trade-in value is also influenced by things like driving history, how often the driver had routine maintenance done, or the general state of the car’s interior.” Thomas says that when a trade-in tool tries to pinpoint an exact figure for the trade-in value, its requirement for such a huge amount of information can actually push away potential clients.
“I think that most trade-in tools do a poor job of establishing a balance of giving a customer a high-level idea of where they are in the market and too much detail,” he said. “This is making the process harder than it needs to be, and makes the process a difficult and negative experience.”
Options to Make Auto Dealership Websites More Engaging
So, what are car dealers and internet managers to do? Clearly, customers still want to judge trade-in value before coming to a dealership, but what if that tool is pushing customers away by asking for too much information, or giving them a false sense of what to expect?
The answer, Thomas says, is partially to find a better trade-in tool. Customers should be given an appropriate expectation for their estimates, as the tool can only come so close to an accurate prediction without someone actually inspecting the vehicle.
“We have found a good tool through PERQ that asks high-level questions to create a fairly accurate estimate,” Thomas says. “We need to know the make, model, year, and mileage, plus ask a couple questions about what their vehicle looks like. The tool is often being refined, but with those five or six questions, I’m going to be within $1,000, plus or minus $500.”
However, in addition to the trade tool, Hazel pointed out that dealers can benefit from web tools like quizzes or search filters to help guide customers in their auto shopping experience through more personalized channels. In fact, these interactive tools can capture shoppers in all stages of the buying funnel.
If they’re in the Discovery portion, they may respond well to a pre-qualification tool or the ability to unlock a special offer. The Research level of the funnel includes trade-in tools, as well as a market price comparison application. In the Buy portion of the funnel, tools like chat functionality and the ability to apply for financing help convert remote shoppers into future buyers.
This is all to say that trade-in tools can be a valuable asset for your dealership’s online presence, but in today’s market they are expected, and when left to stand alone, can give an incomplete or inaccurate picture of an auto dealership’s approach to sales.
It makes sense that customers would want to use their current vehicle as a full or partial payment for a new car, and leveraging their curiosity to inspire an in-store visit is a no-brainer. But your trade-in tool needs to be part of an overall digital strategy that’s transparent and honest.
Instead of over-promising or trying to deliver too much information, trade-in value checkers are best used as estimation tools to move customers down the funnel and in the caring hands of your talented sales staff. Trade-in tools should work as part of a larger set of interactive features to engage with your clientele. By asking a few high-level questions and letting the customer’s imagination do the rest, you can set your auto dealership up for web marketing success.