Why You Should Let Your Customers Calculate Their Trade Value and Monthly Payments Digitally

In years past, it was common (and expected) to have car shoppers come into the dealership in order to calculate their trade value or give them monthly payment figures. With technological advances and evolved customer expectations, that is no longer the case at many dealerships, though too many dealers are still asking customers to come in to complete those steps. In today’s highly competitive market, telling the customer that they have to come to the dealership, giving them excuses like “I have to check your credit...,” “I have to see if your trade is upside down,” etc., the consumer can easily opt to work with another dealership who makes that part of the process easier. Dealers need a better, more transparent strategy to win over customers who expect an easier process. 

When Customers Ask About Monthly Payment Amounts Digitally 

When a customer asks about their monthly payment amount, whether it's on the phone or via email, we should be able to give them an estimated range. We should also be able to explain why it’s an estimate and why it’s a range. For example, “That’s a great question about your monthly payment. I can give you a range for your payment and let me explain what will factor into that range...the equity you want to put in, how many months you want to finance it for, etc. and from there we can give you some estimates for your monthly payment.”  

What we can’t do is make that range padded or packed. We have to be able to say, “This is the range, here’s why it’s a range, and if you want to fill out a complete credit application, we can go ahead and get the loan pre-approved so we can get the range narrowed down.”  

We must stop saying that the customer needs to see the finance manager first and that we can’t give monthly payments over the phone, etc. You also can’t give a range that includes unrealistic numbers. The customer can easily go online to their local credit union and by putting in a little bit of information, they can calculate their own monthly payments themselves.  

When Customers Ask About Their Trade Value Digitally 

As with calculating monthly payments digitally, the same is true for trade value in that more and more customers expect to be able to do it from afar. For example, a customer should be able to describe their vehicle over the phone to your team and provided that the information is truthful (41K miles, 5 years old, new tires, no accidents, some bumper scuffs, scratch on hood, etc.), you should be able to give them a fairly exact number. However, many dealers still want to get you into the dealership for various reasons. Some try to undervalue the trade intentionally and factor the difference into the profits they make. Some customers might not realize this, but others will. Customers can easily go on to Accu-Trade, CarMax, Carvana, or AutoNation (either in advance or afterwards) and can get a trade value and an offer to buy their vehicle instantly. With the click of a few webpages, customers can find out and compare their trade value without going to the dealership in person. If a dealer tries to undervalue or pencil their trade, the customer can mention it and/or go with the better offer, causing the dealer to potentially adjust their offer (and even erode the customers trust in the process). 

Of course, it's essential to explain that the trade in value given over the phone/via email is an estimate and a range. You can explain that “mileage and condition are the main things that are going to affect the price of your trade in. If the tires are worse than you mentioned, you won’t get as much,” etc. Sites like Carvana make you do a very detailed inspection online and make it very clear that they inspect the vehicle against what you told them so this shouldn’t be a surprise to the customers who have done their research. 

How to Make Calculating Trade Value and Monthly Payments Easier Digitally 

Some progressive dealerships offer trade value and payment calculators on their websites, but not many. Some dealerships may offer a trade value or credit form on their website so you can fill it out online, and they’ll follow up with a phone call afterwards. The best approach is the one that reduces the greatest amount of friction for your customers. Forcing customers to come in to complete these steps is going to drive people to your competition down the road who are making it easier for these shoppers.