A dealer-owned company that handles trade-ins online is continuing its national expansion and has a new marketing agreement with America Online that allows it to lower fees.
Don Tamburro, CEO of USA-Tradein.com of Round Rock, Texas, said his company will begin operating in Phoenix March 15. USA-Tradein.com began in Austin, Texas, and San Antonio last fall and expanded to Las Vegas in December. Seattle is the next target, but Tamburro declined to give a timetable.
USATradein.com, with 59 participating dealers, is one of the few dot-coms that have tackled the trade-in issue. Tamburro said USATradein.com draws consumers into dealerships, reduces conflicts over trade-in values and helps dealers improve grosses.
'The customer might think his vehicle is worth $12,000 but the dealership gives them a value of $10,500,' said Tamburro, who also is the CEO of Classic Automotive Group of Round Rock. 'This creates a confrontational environment. Then the dealer begins to discount the new car to give the customer more for their trade-in.
'With USATradein.com, the customer may still think their car is worth $12,000, but it has given them three to five bids, all between $10,500 and $11,000. Now, they say `five people bid on my car and the top price is $11,000. That must be what my car is worth.''
How it works
USATradein.com works like this: A consumer fills out an online appraisal form. A used-car manager evaluates the information and sends back an offer electronically. As many as five dealers can bid on a vehicle, and they have five days to submit bids.
Consumers can reject or accept a bid. Dealers can choose not to follow through after inspecting the vehicle if they believe the online appraisal to be inaccurate.
Eric Maund, sales manager at Maund Automotive Group (Cadillac-Oldsmobile-Jaguar-Volkswagen-Audi-Toyota-Honda) in Austin, Texas, said his company has been using USATradein.com since about October. Though he said it was difficult to pinpoint how many sales are the result of USATradein.com, grosses are averaging about 10 percent higher than on other vehicles sales for the sales he can identify.
'A lot of the time, we've talked to them via e-mail or phone before they get to the dealership,' Maund said. 'When we know what they want, we can be more prepared.'
USATradein.com began advertising on America Online in January, a move Tamburro said is more cost-effective than newspaper ads. As a result, the company has reduced its monthly rate from $995 to $595.
Mitch Scherr, USATradein.com's chief strategy officer, said the deal allows the company to target consumers better in areas where it has dealers. Since it began online advertising, USA-Tradein.com has been driving an average of 15 bid requests a day, per market, to participating dealerships.