Marc Steiner, founder and CEO of Turn Automotive, recently joined Daily Dealer Live to share his takes on why trade-in appraisals go wrong based on what he’s seen in his 30 years in the industry, but also what dealers can fix without buying new software.
Here are the five strongest takeaways from his segment:
1. Appraisals should involve the customer and their point of contact.
Steiner pointed out that, oftentimes, appraisals are done away from the customer.
But he believes the goal should be for the customer to understand and trust how the number was reached.
“A lot of dealers have a process, you know, they go through their typical process, but it's just not customer engaging enough. It's not transparent and factual enough,” Steiner told host Sam D’Arc. “So maybe the salesperson's not even involved in it. They throw the keys to the used car manager, and that appraisal's done elsewhere. The customer doesn't know. It's mysterious. And then when the salesperson gets to present that number, they know nothing about the car.”
His point: The person directly interacting with the customer (and the customer themself) should be part of the appraisal.
2. Ditch the Wizard of Oz appraisal system.
During the segment, D’Arc compared the traditional silent appraisal to The Wizard of Oz, with the used car manager hiding behind the wall while the customer waits for a number.
Steiner’s take: “The silent appraisal was great for years,” he said. “We grew up doing it. [But] with technology today, with the software we have, that silent appraisal now becomes non-confrontational, third-party neutral… With damage detection, true AI, taking pictures that show the salesperson [and] the customer, ‘Hey, we noticed a dent here, or a scratch, or some rust. Let's look at it together.’ Engage them. Now we're looking at things together, and we're not beating up the car. We're working on facts, and we did it together, right? It's not confrontational.”
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3. Explain to customers that their trade is being shopped to hundreds of dealers.
For context, Steiner’s company sends a prospective trade-in’s photos and condition reports to hundreds of dealers around the country, who bid on the car in real time. That means a trade might be worth more in another area, even states away, than at the store the customer visited. The bids let the sales desk find out while the customer is still there.
Best case scenario, Steiner said, is that the salesperson explains this up front.
How he explained it: “I'm the salesperson and Sam, you're my customer. I'd say, ‘Sam, I'm sure you've had a car appraised before. We do it a little different here at ABC Toyota. I'm gonna ask you to do the appraisal with me. We're gonna create what's called a condition report. I'm gonna take you outside. We're gonna take some pictures. I'm gonna ask you some questions. Sam, the reason we're gonna do this is that the vehicle might be worth X amount of dollars for our inventory right here at our dealership, but it might be worth more in Detroit, Florida, or Texas. We're gonna shop it around to hundreds of dealers right while you're here. And if we find more elsewhere, we're gonna pass it on to you. But you don't have to deal with the transportation or logistics.”
4. Give your best number first and stick to it.
Steiner told D'Arc that a strong first offer is the best way to keep the new car sale.
“Just come at them with your best number, because in today's market, you better give them a strong number or you're not selling that new car,” Steiner said.
Knowing this: After a full inspection with photos and data, Steiner said he cannot think of a reason the offer should change.
“What circumstances legitimately should change a trade value after the customer's been given an offer, like devaluing the trade? If you go through a proper process, I can't think of one. Because once that bullet's out of the gun, you gave the offer, you need to stick to it.”
5. Offer appraisals at the customer's home.
Carvana and CarMax compete well because customers can sell from their driveway. Steiner explained that dealers can (and should) explore fixes like a text message that lets the customer inspect the car with a one-time phone app.
That way, the dealer can quote an exact number before the customer arrives, an upgrade he said anyone can do.
“That's how you compete with Carvana and CarMax,” Steiner said. “You do the same thing they're doing instead of saying you have to come to the dealership.”
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