Wednesday, September 5, 2012

Dealership Debates: Trade-in Values

There are things about buying a car that no one likes but are necessary evils. I would like to address some common dislikes about dealerships and get some opinions on what we can do to change.

The Trade-in process is a tricky thing for most consumers and dealers to agree on. NADA, Kelly Blue Book and a handful of other smaller websites attempt to give a little guidance on what vehicles are worth. I have been helping people trade their vehicles for different transportation for over 7 years now and I just have not found their guides to be reliable. It is a daily occurrence that a customer tells me they have looked at the value of their car on one of those websites. The problem with these sites is there is no guarantee of value. They don't buy and sell the cars themselves. Their websites all say, guides, estimates, etc. There is a new website called Autotrader Marketplace however, that will buy cars - they have more accurate values too.
I am not saying that we should consider them as credible or valuable. I am saying we should think of them as guides to get a feel for what our cars might be worth. Clicking a few general options and putting every vehicle into 3 categories of condition like fair, good, and excellent to get a value is a mistake many people make. Everyone has a different perception of what these categories mean. Think about this...does your car which you would say is in good shape, fit into the same class of condition as the guy with the "custom" spray-painted racing stripes?
I do think it is great that these trade-in value websites exist. They DO help customers get fair deals and prevent them from getting hosed at the dealer. However, it is important to remember these are guides and not straight forward values. They only way to get an actual value is to have an appraisal done. Doesn't that just make sense? Your door dinged and mail box scraped mini-van would have a different value than the rear-ended and bald tired mini van of your neighbor.

The last thing to remember is you can always sell your vehicle on your own. Sometimes this is worth it and sometimes it is not. If you have a one-of-a-kind 1992 Mitsubishi 3000GT VR-4 with only 30,000 miles and you garaged it every day and is in "mint" condition you should probably sell that car on your own. The dealer is going to look at that car as it does every other car - what can I sell this thing for and how long will I have to sit on it before it sells. Dealers can't attach value to those summer night cruises, road trips, or Saturdays spent washing and waxing ol' faithful. I personally enjoy hearing cool stories but unfortunately the dealership can't spend more money on the mini-van because of it. The competition may have one just like it and they are selling it for $1000 less.

I am not heartless though when it comes to vehicles. I appreciate a sweet ride just like the next guy. I am just suggesting when you have a specialty vehicle take the extra effort and sell it on your own so the next guy can hear the stories and know that he is getting a vehicle that has been well-maintained. I will say you always get more selling a vehicle on your own.
When selling a car on your own however, there are some disadvantages. The average vehicle takes about 6 weeks to sell from a private buyer so if you need to switch out of something fast this might not be the best route to take. There is always a chance that the vehicle you sold someone could have a problem and then they expect you to take care of it - which you should always let everyone know when selling something privately you are selling a car not a warranty. There is also the part where you have to do my job. Answering the many calls and texts, making appointments for people who don't show up, letting someone take your car around, and low ball offers can get old after 6 weeks. 

As for me, I always let people know up front I will be doing a full appraisal and offering them market value for their vehicle. The vehicle, in the condition that it is in, in the live market that it is in. Some dealers try and screw with people's perceptions by "over-valuing" the vehicle so that everyone who quotes market value will look stupid. This is a poor practice and really isn't good business either. When a customer is quoted $5,000 for their 1996 Dodge Stratus and you quote them $1000 it makes you look dumb. They go back to the dealer who charges $5000 more than he should and you walk away thinking you "sure showed them". In reality you got $4000 more for your car but you paid $5000 more than you should have.

Seriously messed up industry right? I know how you feel! I have been trying to offer good customer service, quality products, with integrity for the past 7 years and I have really enjoyed it. Sometimes nice guys finish last, but I always sleep well at night :) I have made a lot friends and helped many with vehicles. If you have any questions feel free to ask. I wouldn't say I'm an expert - just someone who has some experience.

- Joe Macedone

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