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The Art of the Trade-in Walkaround – Setting Realistic Expectations

The Art of the Trade-in Walkaround – Setting Realistic Expectations with Customers
By Chris Saraceno


Most customers looking to trade in a car bring to the dealership unrealistic expectations about the value of their trade-in.

Experts believe the Automotive Sales Consultant is the best person at the dealership to manage the customers’ expectations of the value of their trade. And, sales consultants can best help customers arrive at a more realistic number – one fair and acceptable to both customer and dealer -- by conducting a Trade-In Walkaround.

A former colleague of mine and a nationally recognized automotive consultant, John Beagan, taught me early in my career that most customers come in for a trade-in with three numbers in mind:

  •   What they’re hoping to get.
  •   A figure they are willing to do business at.
  •   A number they won’t take any less than.
  •   Customers arrive at these numbers in a couple of ways:

           - From the amount they still owe on the vehicle.
           - From Internet websites such as the National Automobile Dealer
             Association; Kelley Blue Book, and

  •   From dealership eCommerce web sites.
  •   From walking around dealership lots.


However, none of these sources provides all the information customers should take into account when estimating the value of their trade-in.


  1. First, the amount they still owe the financing institution on the car is not a reliable gauge. Very often the market value of a vehicle depreciates faster than the decline in the remaining principal due on the car.

  2. Second, when a customer gets their trade-in numbers from Internet websites such as the National Automobile Dealers Association, Kelley Blue Book, and, from dealer eCommerce sites, or from walking around dealer lots, they see a range of numbers and always pick the highest value. Depending on the condition and mileage of their own car, that number may not reflect the car’s actual value.

  3. Third, customers often overlook the added cost of the work required by the dealership to make the car ready for the re-sale market.


They are unaware of reconditioning costs which may include: Fixing mechanical problems, or fixing body damage -- to name a few examples: bumper repair, windshield repair, paint touch up, paintless dent removal, headlight restoration, interior repair, wheel rim repair and much more.


Customers may also not take into account the expense incurred by the dealership in assuming the risk of guaranteeing the vehicle for a 30-or 90-day or one-year warranty period, once it is re-sold.


Also to be factored in is a small percentage of the overhead expense of running the dealership.


Yet it is critical to the customer and the sales consultant that they arrive at a price that is satisfactory and fair to both, so a deal on a new car can be made. Too many new car sales fall apart late in the sales process due to the fact that customers aren’t willing to accept the amount the dealership puts on their trade.


The Trade-in Walkaround is an effective way to bring customer expectation more in line with true market values and it should be introduced early on in the Sales Process.


Even before the customer enters the dealership, sales managers should make sure that their sales consultant team is well-versed in how to conduct an effective Walkaround.


In many respects, a Walkaround is similar to a real estate agent showing a prospective home buyer new property – pointing out the good points, as well as the things that need repair and leading the customer to an appreciation of the true market value.


Sales managers should model how to complete a Trade-in Walkaround with their sales consultants -- including tips on what to do and say through a wide range of potential customer reactions. Handling the customers’ trade is actually similar to the new vehicle sales process, because what sales consultants essentially need to do is sell the customers’ trade-in number back to them.


Role-playing with the sales manager or other sales consultants is the single best way for sales consultants to learn how to present the customer with trade-in information and deal with customer concerns and questions.


Sales managers should also make sure their sales consultants know how to properly fill out a Trade-in Appraisal Form.


The Trade-in Walkaround’s should always be conducted before the dealership’s Used Car Manger does a formal appraisal and after the sales consultant knows the customer wants the new vehicle he/she has been shown. (Since accurate appraisals take time, an appraisal of the customer’s trade-in should not be used as a tool to see whether the customer is a serious buyer or not.)

First, Give the Customer an Overview


Before beginning the Walkaround with the customer, the sales consultant should always present an overview of the Walkaround, explain its benefit to the customer, and then ask the customer’s permission to begin.


It’s important to limit the Walkaround to 10 minutes. Taking too long or being overly critical of the trade-in car will offend most customers.


Right away, the sales consultant should introduce the dealership’s Appraisal Form as a tool to guide documentation of the car’s condition and repairs needed that the Sales Consultant and customer will notice during the Trade-in Walkaround.


The sales consultant should start with looking under the hood area. Comparing the customer’s vehicle to the new vehicle they’ve been shown increases the customer’s chance of buying.


If they find a defect while examining the car, sales consultants often don’t have to say anything to help set expectations for the customer. Sometimes a questioning look, a nod of the head, or doing something twice like starting and restarting the vehicle will be enough to help bring the customers’ expectations of what their vehicle is worth in line with its true market value. This is often more courteous than making a negative comment.


However, sales consultants should show the customer the items being noted on the Appraisal Form without being overly critical of the vehicle. Getting the customer’s agreement on these items that need to be corrected is important. Doing this will make the customers aware that the vehicle may not be in as great a condition or worth quite as much as they originally thought.


At most dealerships, after the sales consultant has conducted the Trade-In Walkaround, the Used Car Manager looks at the customer’s vehicle, road tests it and comes up with a formal appraisal. If the sales consultant has conducted an effective Walkaround, the Used Car Manager’s formal appraisal will not be a surprise to the customer.


Conducting a fair and efficient Trade-in Walkaround is the best way to keep more deals on track, increase sales and profitability for dealerships, and satisfy customers that they are getting the fair market value for their trade-in.


Chris Saraceno is Vice President/Partner of Kelly Auto Group and Founder of dealerElite. , headquartered in Emmaus PA. He began his 28-year career in the automotive industry as a sales person for Ruhe Oldsmobile in Allentown, PA. He was the founder and president of Teambuilders, Inc. an automotive consulting company, serving many corporate clients, including Saturn and Chrysler. He resides with his wife and family in Allentown, PA, and is a graduate of Kutztown University.

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Tags: Art of the, Chris Saraceno, Setting Realistic Expectations, Trade-in, Trade-in Walkaround, walkaround


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Comment by Mohammad Siddiqui on November 23, 2011 at 11:04pm

An article worth reading and implimenting to better the trade ins

Comment by Tom Gorham on November 12, 2011 at 7:11pm

Chris, I love it.  The trade-in is one of our last out-posts of creative negotiations.  The art of the trade-in walkaround should be standard practice for all sales-people. 

Comment by Chris Saraceno on November 11, 2011 at 11:12am

Thank you for all your kind comments

Comment by Chris Justice on November 10, 2011 at 9:09am

The trade-in walk around should never be skipped. I have seen many deals blow up because the salesperson thinks they have a lay-down and skip this step. Only to lose the deal because the customer has unreasonable expectations for their trade. Great blog!

Comment by Jim Kristoff on November 10, 2011 at 7:15am

Good post Chris!

This is what successful dealerships do on a daily basis!!

Comment by Ralph Paglia on November 10, 2011 at 5:31am

It is amazing to me that so many dealerships have salespeople working for them who have NOT been trained in this process... Chris, you should offer your services for hire!

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