Black Book, a division of Hearst Business Media unveiled April 27, 2017 results from its latest survey which took the pulse of how consumers and car shoppers view the importance of the trade appraisal during the overall car buying process. The survey also gauged just how far apart many consumers feel they believe their trade is worth compared with how dealers value their vehicle. Black Book presented the online survey to roughly 2,100 consumers across the U.S. during the month of March.
Personal finance experts have spent millions of hours of airtime and articles offering advice on how to negotiate a person’s next vehicle. And while the trade-in process is a critical component, dealers may under-appreciate just how critical it is to the transaction. In fact, next to receiving a sale price drastically different than originally offered (27.8%), consumers said a vehicle trade-in quote that’s far from expectations (21.5%) was the second-most likely scenario to kill a deal.
Many consumers cited specific frustrations with the valuations they often receive from a dealer. 36% of those polled said their researched quote was $1001 – $1500 apart from the dealer’s offer; and another 27% said their quote was more than $1500 apart. Nearly half (47%) said they need the dealer’s offer to be between $501 – $1000 of their research quote for it to be acceptable.
“Clearly, the trade valuation process remains under-appreciated by dealers, and consumers still feel the process of trade valuation remains too adversarial to the transaction,” said Jared Kalfus, Senior Vice President of Sales at Black Book. “This actually validates much of what we hear from our dealer and online trade appraisal partners who realize that having more accuracy in their trade valuation process can significantly increase their closing rates on transactions. Additionally, a lost transaction eliminates additional used inventory from the trade that translates to an additional profit opportunity.”
Lastly, 46% said getting the right trade appraisal was either “very important” or “extremely important” to their decision on their next vehicle purchase.