TROY, MI – To a few people, that emerald-green Chevrolet Cruze sure looked nice and shiny on the new-car lot. But owners of such vehicles may become red-faced at trade-in time.
That’s because vehicles sporting non-standard hues fetch lower prices on the used-car market than the same models in more-popular car colors. Black and gray may not light up the sky, but they help vehicle values. It’s a reason those colors stay high on automotive preference lists.
In the case of the emerald-green Cruze, “its trade-in value, depending on the market, is $500 to $1,000 less than a comparable Cruze in a more desirable color,” says Juan Flores, an operations director at AutoTrader.com, an online marketplace.
“It goes back to demand,” he tells WardsAuto.
Nothing against green. It looks fine on football fields and in forests. But it’s not a big draw in the U.S. vehicle market.
Instead, most American car buyers opt for white, black, gray and silver. Those four favorites adorned 70% of vehicles built last year, according to paint supplier PPG’s annual survey.
Car color is one of 16 questions AutoTrader asks of online shoppers using its Trade-In Marketplace tool, a valuation calculator. It drills down to details.
- Is a full set of keys and key fobs available? “Not having both key fobs is a $350 deduction,” Flores says.
- Have occupants smoked in the vehicle? A higher trade-in value is another reason to quit.
- What’s the vehicle identification number? The VIN precisely identifies a vehicle, its trim level, options and more.
- Do maintenance records exist? Documentation trumps mere owner claims of regularly performed service work.
The valuation tool’s calculations rely on various algorithms and real-time data, such as auction prices. “We also take into account no-sale auction data, because there’s a reason a car doesn’t sell,” AutoTrader consultant William Pearson says.
The company is pitching the calculator to dealers as a way to ease customer anxiety and frustration. The trade-in process ranks as a common cause of customer discontent.
“Customer satisfaction is high when people are online, but drops when they go to the dealership,” Flores says, indicating only 37% of surveyed customers thought the trade-in went well.
Part of the problem is that consumers feel in full control while shopping for cars online, but not when they’re at the dealership transacting business, he says. The trade-in part places last in satisfaction scoring, with many customers skeptically wondering how dealers determine vehicle values.
“There’s often a disconnect between what customers think their trade-in is worth and what it’s actually worth,” Flores says, touting Trade-In Marketplace as offering transparency. “It provides relevant information to the consumer while still being sensitive to the dealership.”
To enhance the trade-in process at the dealership, he recommends inviting customers to join the walk-around inspection for validating a vehicle’s condition, discussing both positive and negative factors affecting values.
Encouraging consumer involvement “has proven to be a winning strategy that helps dealers increase customer satisfaction and stand out from the crowd,” Flores says.
He pitches AutoTrader’s online evaluator to a gathering of dealers and used-car managers in metro Detroit. Some of them had questions of their own.
“So customers are evaluating their cars?” a dealer asks. He says many car owners misunderstand differences in condition levels, potentially leading them to overvalue their prospective trade-ins.
Another dealer thinks the tool asks too many questions. “It’s kind of a tedious process,” he says. “I wonder how many people start and quit halfway through.”
Pearson responds: “It may seem tedious to us, but it’s not to a customer if it means not having to drive across town to get a trade-in valuation. And if someone spends 11 hours online researching cars, five more minutes isn’t a lot of time.”