Blake Arbogast, general manager of Dave Arbogast Buick-GMC, knew from customer surveys that vehicle trade-ins were a contentious part of an otherwise smooth buying experience at his store.
Too often, shoppers said the trade-in offer was low or that they didn't understand how the dealership arrived at the price, Arbogast said.
"Even my friends would sometimes complain," said Arbogast, whose father, Dave Arbogast, owns the store near Dayton, Ohio.
So Arbogast said he decided a year ago to take the mystery out of how his dealership prices trade-ins and make the process transparent to shoppers.
His solution was to use a third-party vendor -- in this case, AutoTrader.com's Trade-In Marketplace -- to walk customers through the numbers with a salesperson. AutoTrader.com is an Internet shopping site.
Trade-In Marketplace enables users to fill out a comprehensive online checklist on the condition of their vehicles and generate a wholesale trade-in price that AutoTrader.com will honor and purchase the vehicle for even if the dealership won't.
Arbogast said the store's sales process requires salespeople to go through Trade-In Marketplace with the customer to ensure they get a trade-in price from a third party.
Often, the store can offer a few hundred dollars more for the trade-in than the online price, making the dealership look good in the process, he said.
The switch to transparency has improved the dealership's Customer Satisfaction Index scores, Arbogast said. The dealership sells from 40 to 80 new vehicles and 175 to 215 used vehicles a month, he said.
Customers can more accurately assess the condition of their vehicles when a salesperson walks them around the vehicle and guides them through the trade-in evaluation, Arbogast says.
And, he says, it beats the old way of doing business, in which a used-car manager offers a price without telling the customer how it was determined.
Says Arbogast: "I call that the Wizard of Oz effect."