October 10, 2022
What’s Better? Trade-In Ranges Vs. Single-Price Offers?
Get a handful of dealers and vendors together and ask them what kind of price a consumer should get when valuing their trade-in, and you’ll get two primary responses.
Dealers will approach this question philosophically and strategically, as they should. Many prefer the simplicity of a single-price offer so that consumers know what to expect. Others prefer a trade-in range, for the many reasons spelled out below.
The vendors are much easier to predict. If all you sell is a single-price solution, well, that’s the best approach. If you sell a range-based solution, that’s seemingly all that the world needs.
There are pros and cons to each approach, but the simple answer is that you need both.
The Pros of a Single-Price Offer
- A person gets one number, so they feel like they have some degree of certainty.
- They typically have to answer a ton of questions, which means the person is more engaged and likely a more interested prospect.
The Cons of a Single-Price Offer
- Most vendors don’t allow you to control the offer, so you’re stuck with whatever they say the number is.
- If that single number is too low compared to Carvana, CarMax, or your competitor down the street, your prospect will 100% ghost you.
- If you can’t honor that offer because it’s too high, now the person doesn’t trust you and your dealership, instead of the company that gave the bad value to begin with.
- Those 75 questions to answer and 10 pictures a person has to take absolutely kills website conversion. You’ll convert significantly less website traffic into new car leads.
The Pros of the Trade-In Range
- You get a ton more leads and inventory sourcing opportunities. Because you only need the year, make, model, trim and mileage, and don’t have to ask 100 questions about the car, consumers get their value in a few seconds versus minutes.
- Your team can better control the conversation, having the flexibility to discuss the price range, instead of being locked into a single number.
- Your used car manager and your sales team are both happy. You won’t overpay, and you’ll still get people in the door.
The Cons of the Trade-In Range
- Because the process is simpler and faster, you’ll have more leads but they’ll require additional effort and a streamlined process to engage with.
- The consumer expecting a single-price offer will have to look elsewhere.
What are Your Goals?
If your goal is fewer but more engaged leads, a single-price solution will accomplish that.
If your goal is to convert more website traffic into leads, while still providing customers with realistic expectations, the trade-in range tool will do this.
Great news! You can achieve both goals!
Your website needs both solutions, because the customers coming to your website have different needs. Some want the quick hit, while others want the more in-depth process because they’re further along in their car-buying journey.
When you smash those two together into a single solution, everyone gets the best of both worlds, and the cons fade away.
Offer, by TradePending, combines the agility of the trade-in range with the certainty of the single-price offer. When a person enters the “Value Your Trade” process, they get that trade-in range within seconds. Upon completion, they’ve got the option to “Get a Firm Offer”, funneling them into the questions that will deliver them a single-price offer.
The game-changer in TradePending’s approach is that you, the dealer, can configure the questions that you ask and deductions you take in order to arrive at the offer. Here are four dealerships explaining why this configurability is so important.
If your strategy is to get more people in the door, ask fewer questions and be more aggressive on the price. If your strategy is to deliver as realistic a number as possible to capture more qualified prospects, then ask additional questions to refine the price.
The configurability of Offer lets dealers control those single-price offers to match their used car inventory acquisition strategy and the competitive environment in their local market.
Hear directly from Port City Nissan how well this approach works for them.