If you run a dealership and are looking for ways to boost your trade-in sales, you may want to consider adding a trade-in valuation tool to your website. Why does this matter and will it really work? In this article, we outline the importance of online shopping for car customers today, as well as how a valuation tool can boost that digital experience for your prospects and result in better sales and an improved customer experience.
Why Dealerships Should Focus on the Digital Experience
It’s no secret that today’s customers are increasingly found online. This can be seen across industries— ecommerce has continued to grow and is projected to reach $1.7 trillion by 2027.1 For the auto industry, this trend is catching on and is reflected in the types of online searches customers are making. For example, Google reported that the phrase “car trade in value” has roughly 148k monthly searches, the phrase “car value” has 80k monthly searches, and the phrase “used car value” has 60k monthly searches.
This extends to customer behavior as well: 48% of car customers are now beginning their buying process online, whether that means conducting research, previewing dealership inventory, assessing the value of their trade-in, or even completing the full purchase in an online-only experience.2 Almost half of customers prefer to conduct their research phase online, and 38% typically browse dealership inventory online before going in person.2
What Is a Trade-In Valuation Tool?
One key feature that all dealerships should consider adding to their website is a trade-in valuation tool. This widget or integration is an interactive box that allows potential customers to input information about their existing vehicle to estimate its trade-in value at your dealership. These tools can help capture leads, facilitate the used vehicle buying process, and encourage customers to shop at your dealership for a simple and transparent experience.3 According to Lawson Aschenbach of Biz Car, “From the consumer side, we've got nothing but positive reviews so far. It's simple, it's easy, it's very efficient…”
How Do Trade-In Valuation Tools Work?
Trade-in valuation tools sit on a dealership’s website and feature fields that customers fill in, like make, model, year, VIN, mileage, and condition. This tool then provides an estimated value for the customer. Depending on the valuation widget, customers can submit images of their vehicle for a more accurate estimation, or other features that can be tailored to the business.
Benefits for the Customers and the Dealers
1. Transparency
When a customer is able to get an estimated car value directly from your dealership before they start the buying process, it will help them feel that they are getting honest pricing with no sales tricks. These tools allow customers to see the reasoning behind their valuation without any other factors that may make an in-person buying experience more complicated or stressful.
2. Shared expectations
One of the major trade-in hurdles for customers and dealers is having mismatched expectations for pricing. Customers sometimes come in with a higher value in mind and meet a salesperson who doesn’t fulfill their expectations, causing a loss in sales for the dealership, and a generally unpleasant buyer experience.
When customers are able to get a valuation online in advance, they can arrive at the negotiation with a shared vision that matches the salesperson’s pricing, allowing transactions to move smoother for both parties.
3. Generate accurate leads
By gathering information about the customer’s current vehicle, dealerships can get a more accurate idea of what vehicles, sales, or deals to market to various customers to ensure a better fit and therefore a higher likelihood of landing a sale.
4. Increased conversion rates and satisfaction
This overall improved customer journey can result in more sales, as well as happier customers who may be inclined to refer other customers or become repeat customers themselves.3
According to Firas Makhlouf of Driver’s Village, “Since we implemented ClearCar, 75% of the vehicles that we're taking off ClearCar, we're putting 'em on the lot and we're selling 'em to other consumers. Using ClearCar, we see that the leads have a higher quality score. We have 80% show ratio in the leads, and we have about 45% buy ratio from those qualified leads.”
Customers Can Value Their Vehicles Using ClearCar
At ClearCar, our vehicle appraisal tool enables dealers to conveniently add it to their website so customers can seamlessly get an estimated value of their vehicle. This can help build transparency and trustworthiness, so you become the go-to dealership in your area. Schedule a demo to learn more today.
Sources
- Yuen, M. 2023. “US retail ecommerce sales will see increasing growth through 2027.” Emarketer. Retrieved May 23, 2024. https://www.emarketer.com/content/us-retail-ecommerce-sales-growth-2027
- Covington, T. 2024. “Window Shopping: Are Americans Ready to Buy Cars Online?” The Zebra. Retrieved May 23, 2024. https://www.thezebra.com/resources/driving/online-car-buying-survey/
- TradePending. “Dealer Trade-In Valuation Tools: how it Works & How You Can Benefit.” TradePending. Retrieved May 23, 2024. https://tradepending.com/blog/dealer-trade-in-valuation-tools-how-it-works-how-you-can-benefit/
