3 Min Read • September 24, 2024
How Dealers Can Win With Trade-In Value
Nearly two-thirds (65%) of car shoppers surveyed in recent study* by CDK said that they ultimately decided to purchase from a specific dealership because it offered the highest value for their trade-in vehicle.
Given that about 40% of shoppers traded in a vehicle, this is one of the top reasons for dealership selection overall.
Trade-In Negotiations Can Take Time
Getting that trade-in value is often a sore spot with 32% saying it took over 20 minutes to negotiate final value. In terms of age groups, millennials were the most likely group to spend over 20 minutes in negotiations, while Generation Z was the least likely, and with nearly half the responses of millennials.
Over 50% of buyers said they spent up to 20 minutes negotiating on their trade-in. That’s close to the amount of time buyers spent negotiating on their new car. This indicates that buyers are equally passionate about the value of their old car and the deal they’ll get on their new model.
The youngest survey respondents — those aged 30 and younger — were both more likely to negotiate quickly or to spend a long time negotiating compared to other age groups. About 75% of that cohort handled trade-in negotiations in less than 20 minutes, while a hefty 10% spent as much as an hour on the process.
The less time spent negotiating, the happier the consumer. And the happier the consumer, the more likely they are to recommend a dealership to friends and family too.
Many Buyers Were Surprised at Just How Much They Got for Their Trade-In
Consumers have a variety of tools at their disposal to determine an approximate trade-in value range for their old vehicle. The days of an uninformed consumer are long in the past.
When it came to those in our survey, though, a quarter (25%) said they received a higher trade-in value than expected. This could be due to used car values being more in flux than in recent years but it’s still good news for consumers. This 25% in the positive column outweigh the 17% of those surveyed wo said they received less than they expected.
The pleasant surprise of a higher-than-anticipated trade-in value may very well have convinced a shopper to finish the deal or even be willing to spend more on a new vehicle.
Dealers Who Don’t Play Games With Trade-In Values May Win Over Consumers
Remember that two-thirds of consumers surveyed said they decided to purchase from the dealership that offered them the best trade-in value. Those who were given a low offer may not have decided to negotiate. They may have decided it was a better use of their time to shop elsewhere.
This may be because it’s more challenging for a consumer to negotiate on a trade-in than it is on a new car. Trade-in vehicles have a wide range of values based on condition, mileage and the local market, which can be difficult for the average shopper to understand. If a dealer offers a straightforward, top-dollar offer, they’re more likely to seal the deal.
*Data collected from a shopping habits study of 1,048 new car buyers CDK conducted in the spring of 2024.
Related
Car Shoppers Still Want a Needs Assessment
Car Buyers Will Hit the Top of Their Budget
Share This
