10 Tips on How to Handle Trade-Ins

Perhaps one of the hardest skills to learn in the car business is how to handle a customer's trade in. It is one thing that can make or break a sale so here are some thoughts and ideas I have on the subject.

1) Don't ever ask someone what they want for their trade. If you do, you'll back yourself into a corner 95% of the time when they hit you with what they owe one it, what their credit union told them to get for it or what they saw similar ones selling-for in the paper.

2) Do a walk around the trade with your customer. Ask them questions like how long they have been driving it, if it has ever been in an accident, etc. Also do what is called a "silent appraisal." Touch rust spots and dings and say, "hmmm" when you do so. Run your finger along scratches and scratch them with your finger nail. Look at the tire tread and measure it with a business card or pencil and say, "Hmmm." Put your finger in holes in the cloth. In other words, you are telling their customer subconsciously that their vehicle might not be as nice as they think it is--you are not really taking value away from it--it is really worth what it is worth. You are just lowering your customer's perception as to what they think it is worth.

3) Give your customer room to negotiate.

4) If they flip out after you tell them what their car is worth--don't jump right to If I could, would you! I saw a guy at our dealership lose a sale the other day by jumping too fast. He hit his customer at a certain price and the customer said he thought the car was worth more. The salesperson went right to, "Make me an offer." The customer responded with a low-ball offer, got mad, left, and bought at the competition.

5) Take a deep breath and justify how the figures were obtained...here are some good examples.

a) I know your credit union said it was worth $10,000 but they base their figures off of their loan value guides. Our figures are obtained from what similar vehicles have sold for--in this area--in the last 30 days. Our figures are more accurate.

b) Our used car appraiser has been doing this for 15 years and you know what I've found out? He's usually pretty exact in his figures.

c) This is called the "Feel, Felt, Found" Close: You know what? I was in the same situation a few years ago so I know how you feel. I wanted $7000 for my car and it was only worth $5000. It almost kept me from trading I felt like my car should be worth more. You know what I found out? I found out that it was really only worth $7000 because they sold it a few weeks later and only made a few hundred dollars on it.

6) If they say they'll try to sell it themselves before they can trade, offer this: Mr. Customer, it takes us an average of 60 days to sell any used car. We spend tens-of-thousands of dollars in advertising each month, have 10 banks waiting to finance our customers and make sure every car is mechanically sound before we can sell it. No offense, but what chance do you have selling your car within 60 days on your own?

7) If they have a beater--tell them to sell it themselves if you feel that you can still get them to buy today. I have never seen that work for a car that they are buried-in.

8) Try to get your customer off of their trade and onto payments. Mr. Customer--quite frankly it really doesn't matter what yours is worth as long as your new car is affordable, right?

9) If they want the dreaded payoff, tell them this: Mr. Customer, your payoff will never have a bearing on what your car is worth. You owe $10,000 and your car is worth $8000 but let me ask you this--would you want $100 if your payoff was only $100? Of course not!

10) And finally--if the trade was a bad experience for a customer (and it usually is) try to talk them into leasing so they won't have to go through it again.