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Forum: Idea Exchange
Topic: Dealing With Prospect's Negative Trade Equity
Topic Posted by: R.K. Brown (kingcigar@aol.com )Organization: BROWN'S AUTO GROUP
Date Posted: Sat Apr 24 13:25:20 EDT 1999
Topic Description: In our market area, most cars presented for trade have balances that exceed their ACV by a WIDE margin.
Does anyone have any ideas, techniques, concepts to share in overcoming impediments such as this to the sale of the next vehicle.
R.K Brown, Vice-President
Posted by: Michael Hargrove (mhargrove@bluinc.com )
Organization:My Success Company
Date posted: Thu Jul 13 9:56:16 2000
Subject: 10 reasons negative trade equity shouldn't matter
Message:
The Top 10 Reasons Negative Trade Equity Shouldn't Matter
10. Your passenger seat is on the National
Register of Historic Places.
9. Instead of an airbag, there's a whoopie cushion taped to your steering wheel.
8. You lose the stop-light challenge to a 14-year old on a moped.
7. 15-Minute Jiffy Lube needs to keep your car 3 days.
6. Thieves repeatedly break into your car just to take "The Club."
5. When you gas up, the attendant asks "Can I re-duct-tape that windshield for you?"
4. While waiting at a stop light, people run up asking if anyone was hurt.
3. Keep losing dates on left turns.
2. Your gas gauge measures in cubits.
1. Traffic reporters starting to refer to
you by name when discussing morning tie-ups.
| Chris Parra | Tue Nov 19 8:20:05 2002 |
Posted by: Todd A. Fee (toddfee@aol.com )
Organization:Mallon Ford
Date posted: Tue Jul 27 1:53:25 EDT 1999
Subject: How to overcome trade (negative equity) objections
Message:
Okay, here's an idea that works 99.9% of the time for me; of course, there's no sure-fire close for every objection, but i LOVE this one, so here goes! after you get the first pencil, and let's say that the desk is offering $4,000 for the trade, but the customers' payoff is $5,500....The customer states "Well, youre going to have to give me more for my trade! I know It's worth at least $6,000!" (First, let's all agree that the reason why the customer is saying that is because he or she wants the trade paid off, with maybe a little left over for the downstroke.) So then i say, I understand, Mr. Customer, I've bought cars myself before I got into this buisness, so I've been in your shoes before..Now, in a perfect world, trade in value would always be the same as the payoff, but since I have no control of what the market value is on your trade, look at it this way; it really doesn't matter if you get $4,000 or $40,000 for your trade, if the new car you want, the car you deserve, doesn't fit your monthly budget, it's all pretty much irrelevant, isn't it? (wait for the customer to nod or say yes), then say something like "so did you want your payments to start on the first or the fifteenth?" or, "Were you going to put that initial investment on a credit card, or were you thinkin' cash?".....Obviously, this doesn't work on cash buyers, etc., but I kind of come from the school of "It's all about payment"
Posted by: Michael Hargrove (mhargrove@bluinc.com )
Organization:Bottom Line Underwriters, Inc.
Date posted: Sat Apr 24 14:59:05 EDT 1999
Subject: "Upside Down" Customers (part 2)
Message:
We can also ask for more initial investment (down payment) incrementally and present it in the manner that's most palatable to our customer (either down, term, or payment). Our customer says he can't come up with the additional $2000 difference. We can respond like this, "Okay Mr. Jones, if you cover only 75% of the difference, your payment simply goes up $15 a month." If he says, "75% of $2000? That's $1500. I can't do that!" We respond, "Well, fine, you know what you can or can't do. If you just cover 50% of your difference, your payment only goes up 30 bucks. Now, that's do-able, isn't it?" We continue this way (30%, 20%, 10%) until they find a point they're comfortable or until we've rolled the entire difference into the amount financed. We can also ask them what's easier, X amount down or X amount per month.
Other strategies come to mind too but I'm getting pulled away by my kids, some rare weekend Portland sun, and a bout of laziness right now. Besides, others will have just as many good ideas and probably even better, so check back here again.
Also please keep in mind and understand that NOTHING works all the time and none of this stuff will either. Sometimes negative equity is simply a condition of sale that we just aren't able to meet. Oh well! Treat this customer with respect, keep in touch with them periodically, and continue to let them know how important their business is to us and we'll stand out from all the rest of the sales people who couldn't do it for them either. When the conditions are more favorable, who do you think they'll be more willing to do business with? Not the salesrep who simply wrote them off, I bet.
Good luck and good selling!
Posted by: Michael Hargrove (mhargrove@bluinc.com )
Organization:Bottom Line Underwriters, Inc.
Date posted: Sat Apr 24 15:11:21 EDT 1999
Subject: "Upside Down" Customers (part 1)
Message:
Thanks for the new topic, R.K.
First, let me point out the obvious. Our customer's payoff is not OUR responsibility. Unless we sold them their last vehicle, we don't control their unpaid balance. (And if we did sell them their last vehicle, perhaps now would be a good time to revisit out extended term financing strategy!) Unfortunately, most salesreps act as if they ARE responsible for the payoff and their customer is usually more than willing to relinquish the burden of it onto them.
Here are some subtle ways to remind our clients who's burden it really is. First, we can stop referring to their present vehicle as the "trade-in". If we call it a trade, then we imply that we're responsible for the dollar amount offered. Instead we can ask, "Are you going to keep your present vehicle or are we going to try and sell it to the dealership?" Now the customer is reminded that, just like we are the seller of the new one, they are the seller of the old one. It's a minor point at best, I know, but any advantage can help.
Next, stop asking for the payoff amount up-front. Again, this implies responsibility. We'll have plenty of time to find this out later in the transaction. My friend, Grant Cardone, says that whenever his friends ask him how to get a "good deal", he simply tells them to double their payoff amount when the salesrep asks what it is. Then you can just watch them chase their tails getting you "unburied".
Now when we present "hit figures", "ACV" or whatever the initial amount is for the customer's present vehicle (let's say...$4000), and the customer screams, "That's it! I knew it! I can't do business with you guys. Hell, my PAYOFF is $7000!" DO NOT respond, "Okay Mr. Jones, if I could get $7000 for your trade, would you buy today?" Because if we do, we are now taking responsibility for the $3000 difference. When we come back with $5000, who dropped the ball to the tune of $2K? We did!
Instead, we can respond this way, "Mr. Jones, what you owe on your car has no bearing whatsoever on what your car is actually worth. I mean, if you only owed $600 you wouldn't sell it for $600, would you? Of course not, you'd want $4000...because that's what your car is worth." Not only did we NOT take responsibility for their payoff amount but we also got a chance to restate the first offer of $4000. When our customer then says, "Well if I don't get $7000, then I can't buy the car." We can respond, "Okay, let me go see if my manager can be a little flexible to try and help us out." Now when we come back with $5000, we are being flexible to the tune of $1K to help out our customer with THEIR payoff.
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| Art Spath | Mon Oct 4 20:45:52 EDT 1999 | ||
| Joe Boyer | Mon Oct 18 22:31:31 EDT 1999 |
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