Whitepapers

Retail vs. Wholesale: 4 Tips for Dealers to Consider When Evaluating Trade-Ins 1. Vehicle History Conditions The most obvious item on any dealership's checklist when evaluating trade-ins is a vehicle's service history. This is important because as dealers are considering holding on to older models to supplement their available inventory, such as 2015 models and beyond with low mileage, and these factors are key for predicting recondition costs. Set clearly defined standards regarding how to analyze a vehicle's history, including the data sources and tools your team uses, with considerations such as: Did the owner keep up with regular maintenance? Does the accident history report detail any collisions or crashes? Are there any signs of vehicle damage? Does your entire service team abide by a single standard for determining when damage exceeds your limits for reconditioning? Does the vehicle show any signs of home repairs? Was the vehicle subject to any unaddressed manufacturer recalls? 2. Local Customer Demand Following industry and sales trends as well as staying in-the-know on changing customer demands should already be part of your used car manager's daily routine. Ensure your team is also identifying more localized demands to better keep track of the specific way your customers are shopping the vehicles on your lot. Your checklist items should include: How many similar vehicles have you sold in the last 30, 60, 90 days? It might be the most common question asked within your dealership's walls: "Are we keeping this one or wholesaling it?" With how frequently the question is asked, it's common for dealerships to have some type of process for deciding which vehicles are worth reconditioning and retailing. But without well-defined criteria for deciding which vehicles to keep and which to auction, your team is much more likely to act according to what they think will sell, making quick, gut-instinct decisions before moving on. This process may save your staff time, but it is likely missing at least some important considerations to account for when evaluating trade-ins to truly maximize your dealership's profitability. To standardize this process and ensure every critical factor is considered when evaluating trade-ins, we've put together four key areas where dealers should focus their thoughts.

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