In a recent survey, Black Book, a used vehicle valuation guide, found that there is a disconnect between dealership trade-in appraisals and what consumers find their car to be worth online.
Survey Findings from Black Book
Black Book surveyed approximately 2,100 U.S. consumers in March of 2017. The goal was to see how they felt about trade-in appraisals they receive at dealerships when purchasing a vehicle.
They found that consumers and dealers often don't see eye-to-eye.
- 36% of respondents said their online quote was $1,001 to $1,500 less than a dealer's offer.
- 27% told Black Book there was over a $1,500 difference.
The survey found that getting a trade-in estimate from a dealer that is far from their expectations to be the second most likely scenario that kills a car deal. 46% of survey participants called receiving an accurate trade-in appraisal "very" or "extremely" important to their car-buying decision. The most likely deal-killing scenario was receiving a sales price that drastically differs from what was originally offered.
Speaking of pricing, 47% of those polled said they would label a dealer's offer to be satisfactory if it is within $501 to $1,000 of the quote they receive when doing their own research online.
Advice for Consumers with a Trade-In
Black Book's survey's findings show that the trade-in is a very important aspect of the car-buying process. Due to the disconnect between how much dealers appraise cars for and the quotes consumers find online, we thought we would provide some tips.
- Be Realistic When You Research Values
We think it's safe to assume that several people who expressed frustration in the survey were simply overestimating their car's worth. So, when you are researching your car's value online, make sure to take the sentiment out of it. Accurately identify all of your car's options and be honest about its condition. If you don't, you may have an inflated idea of your vehicle's value. Also, keep in mind that the quotes you receive are estimates and approximations.
- Get Multiple Offers for Your Trade-In
Not getting more than one offer can be a big mistake. Most experts recommend that you get your car appraised at three or four dealerships. Try to make sure at least one of those sells the same brand as your car. Even if you don't end up selling it to one of these places, it still gives you a price range where you can begin negotiations.
- Understand Where the Dealer is Coming From
You need to understand where the dealer is coming from with their trade-in offer. They are either going to keep the car and resell it or send it to auction. There are overhead costs associated with both of those options. This is one reason why what a dealer is willing to pay is typically less than what you might find in your own research.
The Bottom Line
Black Book's survey showed that there's a lot of valuation difference between dealership appraisals and what consumers get quoted online. Hopefully, the tips we provided are able to help bridge that divide so you have a better feel for the trade-in process.
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We can connect you with a local dealership that specializes in helping people with unique credit situations. Our service is free, fast, and doesn't put you under any obligation. Get started by filling out our secure car loan request form today.