Solving the Used Car Shortage: Proven Ways Dealers Can Source More Trade-Ins

Walk into most dealerships today and you’ll see the same problem. Empty lots. Thin inventory. Customers asking for vehicles you don’t have.

The used car shortage isn’t just a headache anymore. It’s a full-blown crisis. According to Edmunds, prices for 3-year-old used vehicles jumped 3.3% year over year in Q4 2024, hitting $29,710 on average. Cars are sitting on lots longer too. The average days to turn reached 40 days, three days more than the previous year.

While you can’t control what happened during the pandemic, you can control how you respond now. And the best response? Focus on trade-ins.

TradePending’s tools help dealers source more trade-ins by using real-time market data, transparent valuations, and an easy customer experience. Let’s look at how you can solve your inventory problems starting today.

Understanding the Used Car Shortage

Why are we dealing with this shortage anyway?

It all goes back to the pandemic. From 2016 to 2019, annual new vehicle sales averaged between 17 and 17.5 million units. But in 2020 and 2021, sales plummeted to approximately 13.7 million. Those missing cars from three years ago? They’re the missing used inventory today.

The problem gets worse when you look at lease returns. Lease maturities are at their lowest levels in over a decade, down to about 2 million units. That’s another major source of quality used inventory that’s dried up.

Right now, the average transaction price for a 3-year-old used vehicle rose to $30,522 in Q1 2025, exceeding $30,000 for the first time since Q2 2023. And used vehicles are spending an average of 38 days on dealer lots, up from 34 days in Q1 2024.

What do customers want? The most sought-after used vehicles are late-model options priced between $20,000 and $29,000. Good luck finding those at auction without paying a premium.

Here’s your dilemma. You can’t sell what you don’t have. Auction competition is brutal. And customers want affordable options you can’t provide.

The answer? Trade-ins.

Why Trade-Ins Are Your Best Inventory Source

Trade-in customers are already motivated buyers. They’re in your showroom or on your website looking at new vehicles. They need to move their current car. That’s a warm lead, not a cold auction purchase.

You also get higher quality vehicles with trade-ins. You see the condition firsthand. You can inspect it. You meet the owner and hear the history. Compare that to buying sight-unseen at auction or fighting 20 other dealers for the same vehicle.

Better margins too. When you acquire trade-ins, you’re not paying auction fees or dealer premiums. You’re making a direct deal with a customer who values convenience and a fair offer.

Plus, you’re building relationships. A customer who trades in their vehicle and buys from you is more likely to come back. They trust you. They had a good experience.

But here’s the challenge. Traditional valuation methods turn customers off. Book values don’t match reality. Customers show up expecting one number and hear another. Trust breaks down before you even start negotiating.

You need better tools to capture trade-ins. Let’s talk about what actually works.

Proven Strategy #1: Use Real-Time, Local Market Data

The old way doesn’t work anymore. Book values are outdated the moment they’re published. National averages don’t reflect what’s happening in your specific market. A truck might be worth $35,000 in Texas and $28,000 in California. Book value doesn’t care.

Customers come in with wrong expectations because they’re using these outdated tools. They think their car is worth more than you can pay. You look like the bad guy. The deal dies before it starts.

TradePending is the only vehicle valuation methodology that starts by looking at comparable vehicles for sale as close to the dealer’s location as possible, starting with a radius of 25 miles. We’re not using hidden calculations or national data. We measure retail “ask” prices, not wholesale values or book values.

Why does this matter? Because it aligns expectations. The customer sees what similar vehicles are actually selling for in their area. You’re both looking at the same transparent data. The conversation starts on honest footing.

TradePending updates these values daily to stay in tune with the market. That’s critical right now when prices are shifting. If your trade-in tool isn’t keeping pace with local market changes, you’ll disappoint customers who expected more.

Real results? Over 5,000 dealerships across the United States and Canada use TradePending’s platform. And according to a case study, dealers using TradePending get three times the number of quality leads while maintaining their closing ratios.

TradePending’s Trade tool gives you that real-time, local data advantage.

Proven Strategy #2: Make It Fast and Easy for Customers

Your customers are on their phones. They want answers now, not after filling out a 15-minute questionnaire. Every extra field you make them complete is another chance they’ll bounce to a competitor’s site.

TradePending’s real-time trade-in valuation eliminates lengthy questionnaires, resulting in more leads, higher conversions, increased sales, and enhanced inventory sourcing. How fast are we talking? In just a few thumb taps on mobile or through auto-completion on desktop, starting the trade-in process has never been faster.

Customers get their value immediately. Shoppers receive their trade-in’s value and related local market data immediately after providing their vehicle and contact information. No waiting. No back and forth. Just answers.

But here’s what makes it even better. In January 2025, TradePending launched a new video feature in its trade-in valuation tool, allowing car owners to record and share a short video walk-around of their vehicles.

Why does this help you source more trade-ins? Dealerships gain valuable insights through these customer-submitted videos, helping them prioritize their outreach efforts and connect with motivated sellers. You can see the actual condition before you even call. You know which leads are worth pursuing first.

Javier Puerto, Certified Sales Specialist at Covert Bee Cave Automotive Group, said: “TradePending makes it easier for them to just put a few pieces of information and get a number, I think that’s why we have a lot of conversion with those leads”.

Speed and simplicity convert. TradePending’s Trade tool delivers both.

Proven Strategy #3: Build Trust Through Transparency

Let’s be honest. Customers expect you to lowball them. They’ve heard the stories. They’re coming in on the defensive.

Hidden calculations breed suspicion. When you can’t explain how you arrived at a number, customers assume you’re trying to rip them off. One bad experience and they’re gone.

TradePending is the only valuation solution that shows other cars in a local market and how a potential trade compares within that market. Customers don’t just see a number. They see why. They understand the context.

Buyers don’t just want a number, they want to understand “the why” behind the number. Shoppers see supply and demand for similar vehicles in their local market, delivered in real-time.

This transparency builds trust fast. You’re not hiding anything. You’re showing them the same data you’re using to make decisions. That changes the entire tone of the conversation.

Here’s the best part for you. The Trade tool is fully configurable, allowing dealerships to set value ranges based on local market trends, inventory needs, and dealership goals. You’re not locked into rigid numbers. Dealers can control the width or narrowness of the trade-in range and adjust reconditioning fees based upon the type of vehicle.

Everything happens on your website too. Customers remain on your dealership’s website throughout the valuation process, maintaining your brand’s presence and reducing potential lead loss. They’re not bouncing to third-party sites. They’re staying in your ecosystem.

Proven Strategy #4: Convert Website Traffic Into Trade-In Leads

Your website already gets traffic. People are browsing your inventory. They’re researching. Most of them have a vehicle they’ll need to trade in.

The question is: are you capturing those potential trade-ins?

TradePending’s Trade tool utilizes real-time local market data to provide accurate trade-in values, building trust with customers by reflecting current market conditions, and it embeds directly into your site. TradePending’s solutions seamlessly embed into your dealership’s website, creating a user-friendly experience for visitors.

The trade-in valuation tool builds trust by offering a transparent valuation process and makes it easy to compare trade-in offers between dealerships. You’re giving customers exactly what they want, right when they want it.

Here’s what happens behind the scenes. Sales teams can easily track customers who submit videos, helping them tailor follow-up communications. Used car managers gain greater visibility into vehicles they are most interested in acquiring, and receive notifications about new video submissions.

That’s powerful. You’re not just collecting leads. You’re collecting qualified trade-in inventory leads with photos, videos, and contact information. Your used car manager can see everything in one place.

Trade-in leads represent some of the most motivated buyers. These customers are often well-researched and ready to act, making them prime prospects for your dealership.

Don’t let that website traffic go to waste. TradePending’s Trade tool turns browsers into trade-in leads.

Proven Strategy #5: Act on Trade-In Leads Quickly

Speed matters. A lot.

Trade-in customers are ready to buy now. They’re comparing multiple dealers. They’re getting offers from everyone. The first dealer to respond with a competitive offer often wins.

Don’t let leads go cold. According to industry research, response time directly impacts conversion rates. Wait too long and they’ve already made a decision.

TradePending helps you move fast. You get instant notifications when someone submits a valuation. You can track leads easily. The video feature gives you condition information upfront, so you’re not going in blind.

Your sales team can personalize follow-up too. They’re not sending generic “thanks for your interest” emails. They’re referencing the customer’s specific vehicle, acknowledging what they saw in the video, and making a compelling case.

Best practices? Respond within one hour if possible. Reference their specific vehicle by make, model, and year. Invite them in for a final inspection. Make a competitive offer based on the data you already have.

Remember, dealerships are offering higher prices for trade-ins to replenish inventory. In April, trade-in values rose $820 year over year, the first April increase since 2022. The market is competitive. You need to be aggressive and fast.

Real Results: What Dealers Are Saying

Don’t just take my word for it. Here’s what dealers using TradePending are saying.

Lou DiMattia, Chief Operating Officer at Cherry Hill Imports Auto Group, said: “I’ve seen and used many different trade tools in my career. Trade is extremely easy to use, giving our online shoppers a quick and easy way to get trade valuations in seconds!”

Jonathan “JT” Thompson, CEO of Automotive Marketing Gurus, said: “Today, TradePending is a top recommendation for our clientele. They deliver results at a very fair price. Our customers get three times the number of quality leads while maintaining their closing ratios, and they get it for substantially less than full-blown online car buying platforms. Why would you use anything else?”

The numbers back it up. Over 5,000 dealerships across the United States and Canada utilize TradePending’s platform. Major dealer groups like Hendrick, Lithia, Morgan, and West Herr trust TradePending.

These aren’t small operations testing new tech. These are some of the biggest, most successful dealer groups in North America. They’re using TradePending because it works.

Taking Action: Your Next Steps

Let’s recap the five proven strategies to source more trade-ins:

1. Use real-time, local market data instead of outdated book values
2. Make the process fast and easy for customers
3. Build trust through transparency
4. Convert your website traffic into trade-in leads
5. Act quickly on leads when they come in

Here’s the competitive advantage. While other dealers struggle with inventory shortages and fight over auction cars, you’re capturing trade-ins they’re missing. Your lot stays stocked. Your customers trust the process. You’re building relationships that lead to repeat business.

The used car shortage isn’t going away soon. The used car market will reach a critical point in 2025, with low supply due to the significant drop in new vehicle sales during the pandemic years. This is the new reality.

Trade-ins are your most reliable source of quality inventory. But you need the right tools to capture them. Traditional methods aren’t cutting it anymore. Customers expect better. They deserve better.

The difference between struggling and thriving right now? It’s the tools you use.

Ready to Solve Your Inventory Shortage?

TradePending’s Trade tool helps you source more trade-ins with real-time valuations, transparent market data, and an easy customer experience. See why over 5,000 dealerships trust TradePending to convert more leads and stock their lots.Get started with TradePending’s Trade tool today and turn your inventory shortage into an opportunity.