TIMCS2
June 2014
Case Study
Independent Dealer Uses Trade-In Tool
to Increase Dealership Profits
Case studies from AutoTrader.com are designed to illustrate how
various types of auto dealerships across the country are using tools
and technology to transform their businesses. This case study looks
at an Independent dealer’s experience with Trade-In Marketplace and
how it supports the Front-End Fundamentals: 8 Keys to Driving a
Sale. The Front-End Fundamentals is a roadmap that breaks down
what dealers can do to improve their operations in those critical steps
leading to a sale, including vehicle selection, acquisition, transportation,
reconditioning, pricing, photos and video, descriptions and customer
handling. Trade-In Marketplace specifically supports the areas of
vehicle selection, acquisition and customer handling, ultimately
helping dealers deliver the kind of end-to-end experience that today’s
consumers expect.
About Carson Cars
Carson Cars is a family-run, independent car dealership that has been
serving the greater Seattle area since 1968. They offer financing on
a wide selection of domestic and foreign Used vehicles, each of which
comes with a free, comprehensive
warranty. Carson Cars also has a
full-service auto repair shop that
provides routine maintenance, oil
changes and tune-ups. Service
customers are offered free loaner
cars during all repairs.
Offering perks like warranties
Mike Carson (right) owns Carson Cars, and loaner cars is part of Carson
Cars’ commitment to building
an independent dealership that was
relationships not only with their
founded by his father in 1968.
patrons (many of whom are
return customers), but also with their community. For example, the
dealership donates a portion of every purchase to charities such as
St. Jude’s Children’s Research Hospital, Easter Seals and Special
Carson Cars has been recognized as the Washington
State Independent Auto Dealers Association’s
“Quality Dealer of the Year” and Seattle’s King5 TV
Evening Magazine’s “Best Independent Dealership”
of 2011, 2012 and 2013.
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Snapshot
Dealership
Carson Cars
Type
Independent
Market
Lynnwood (suburban Seattle), WA
New Inventory
0
Used Inventory
175
Employees
25
CRM Tools
DealerSocket
Pricing Tools
Trade-In Marketplace, vAuto®
Average Monthly Sales
90–110
Olympics. And Carson Cars gives back to its customers, too, through
their Carson Cars Referral Reward Club: Customers are given $100 every
time they refer a friend who ends up buying a vehicle from the dealership.
The dealership has been recognized as the Washington State
Independent Auto Dealers Association’s (WS/ADA) “Quality Dealer of
the Year.” And Seattle’s King5 TV’s Evening Magazine “Best of
Western Washington” contest featured Carson Cars as the “Best
Independent Dealership” of 2011, 2012 and 2013.
Accolades aside, Carson Cars’ longevity is attributable to more than just
cultivating a culture of caring. Over the years, the dealership has kept up
with the times by adopting best marketing practices and technological
tools as they become available — such as CRM from DealerSocket and
vAuto for pricing.
When it comes to one of the most vital of the dealership’s processes­
— the trade-in — Carson Cars relies heavily on another Web-based
resource: Trade-In Marketplace, an AutoTrader.com vehicle valuation
tool accessible via links on AutoTrader.com, KBB.com and participating
dealer websites. Customers and/or dealership representatives populate
an online Trade-In Marketplace form with detailed vehicle information
and the tool generates a cash offer that is valid for 72 hours and is
redeemable at participating dealerships. Dealerships can also use
Trade-In Marketplace in the store to offer customers visibility into the
trade-in valuation process.
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Case Study
Integrating Trade-In Marketplace to Impact
the Bottom Line
Carson Cars began using Trade-In Marketplace in November of 2012.
According to owner Mike Carson, the results have been dramatic.
“Being a Trade-In Marketplace dealer has meant an average of $600
more on trades for my dealership,” he says. “After being on Trade-In
Marketplace for a couple of months, I didn’t think it was adding any
real value. I called my AutoTrader.com advertising consultant to
cancel the service. He encouraged me to analyze what was really
happening. So we looked at every deal that involved a trade for five
months. The difference blew us away.”
“Being a Trade-In Marketplace dealer has meant an
average of $600 more on trades for my dealership.”
In order to realize such encouraging results, the entire Carson Cars
team was involved in completely integrating Trade-In Marketplace
into the dealership’s trade-in process. “I went to my sales manager
and my finance manager, and they went to the salesmen and said
this is the new way we’re doing all trade-in deals,” Carson says. He
adds that making Trade-In Marketplace
part of the sales process has not only
positively impacted their overall profits,
but also has resulted in new administrative
efficiencies: “We were already integrated
with vAuto; if you first enter the VIN and
other information into Trade-In Marketplace,
that information automatically populates
into vAuto and eliminates one of the steps
for the desk.”
Carson stresses that totally integrating
Trade-In Marketplace into the dealership’s
processes is essential for success. “We had
Owner and secondsort of a ‘no-tolerance, here’s the program’
generation “car guy”
Mike Carson has 26
approach to getting everyone onboard,”
years of experience.
he says. “If you don’t integrate Trade-In
Marketplace from the top down, it’s not
going to work. I was surprised that when we started crunching numbers
we saw some cars weren’t going through Trade-In Marketplace, and I
got some excuses for a little while. But I put the hammer down and
they’re all going through Trade-In Marketplace now, except for the $200
to $500 trade-in that’s an agreed-upon junkyard car.”
“We use Trade-In Marketplace on every trade, every time.”
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Vehicle information from Trade-In Marketplace
automatically populates into vAuto, streamlining
the dealership’s administrative process.
The integration of Trade-In Marketplace into the dealership’s process
is so complete that a trade-in cannot be completed without it. “We
use Trade-In Marketplace on every trade, every time,” Carson says.
Once everyone was dedicated to using Trade-In Marketplace, “it took
a little bit of number crunching to see the difference,” he continues,
“but once we started looking at the numbers in an honest way over
the course of 90 days, it became pretty obvious that if we stick to the
process we realize better profits. That’s pretty huge.”
According to Carson, taking full advantage of Trade-In Marketplace
requires the dealership’s sales professionals to use some finesse: “About
90% of the time the customer says that they think the trade-in value on
their vehicle is too low,” Carson says. “But it’s always been that way. We
do what we can to give them more for their trade when possible.”
Carson adds that occasionally they offer the customer a substantial
amount over the Trade-In Marketplace valuation “to make a deal
work.” However, he stresses that the difference between the Trade-In
Marketplace value and the final trade-in offer — combined with the
overall positive impact of Trade-In Marketplace on the ability to help
close a deal — has resulted in increased overall profit, enhanced
customer satisfaction and a happier sales staff. “We’re making more
money and that’s the bottom line,” he says, “but my sales manager
is happier too. He benefits from including the customer when
determining the [valuation] and using Trade-In Marketplace to help
acquire the trade-in at a cost that allows us to recondition and market
it, and then successfully retail it. And since vehicle information from
Trade-In Marketplace automatically populates into vAuto, he enjoys a
streamlined process.”
Knowing Your Demographic
According to Carson, the dealership’s success with Trade-In
Marketplace is intertwined with its focus on targeting its demographic
with the right mix of location, inventory, pricing and advertising.
“Being in touch with your demographic is key,” he says, noting that
nearly all of the dealership’s sales are to local customers in their mid30s to early 40s with lower-than-average FICO scores. Carson Cars’
inventory is geared to appeal to this customer base. “We have an ‘02
GMC Denali and a 2005 Pontiac Grand Prix and a 2000 Ford F-150
and other vehicles priced around $15,000 and under,” he says,
noting that the dealership’s proximity to a nearby Boeing plant helps
attract their typical customers.
However, location and competitively priced inventory are only part of
Carson Cars’ carefully executed marketing mix. The dealership
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Case Study
Carson Cars’ extensive website features an informational video,
testimonials, online payment functionality and prominent links
to Trade-In Marketplace.
The Carson Cars website vehicle description page features multiple
Trade-In Marketplace links.
maintains classified ads on AutoTrader.com, Cars.com and Craigslist,
invests in search engine marketing and manages its reputation on
sites such as Yelp, in addition to maintaining a robust website at
Carsoncars.net. “The only traditional offline media that we do is in
“We’ve moved away from [offline media] because
the cost-to-benefit ratio didn’t justify it.”
on our advertising. I don’t think we have any ad out there that doesn’t
have a link to Trade-In Marketplace saying ‘click here to value your tradein.’ For example, our Craigslist ads link directly to our website’s vehicle
description page, which features prominent links to Trade-In Marketplace,”
says Carson, who adds that they feature the AutoTrader.com-branded
TIM logo throughout their advertising and website as part of a concerted
co-branding effort that “starts the whole process by helping set the
customer’s expectations regarding the trade-value of their vehicle.”
some of the ‘rag magazine’-style local papers just because we need
to be included there along with everyone else,” Carson says, noting
that at one time the dealership invested more in print, TV and radio:
“We’ve moved away from [offline media] because the cost-to-benefit
ratio didn’t justify it.”
Despite the prominence of Trade-In Marketplace branding throughout
their online advertising, Carson says that the majority of Trade-In
Marketplace quotes are done at the dealership “where our sales rep
sits down with the customer and generates the Trade-In Marketplace
value as part of the process.” He says that even though most of their
customers do not use Trade-In Marketplace online before visiting the
dealership, co-branding Carson Cars with AutoTrader.com through
online Trade-In Marketplace advertising helps establish expectations
before the prospect walks on the lot.
Carson stresses that Trade-In Marketplace is a critical component of the
dealership’s marketing strategy: “Trade-In Marketplace is everywhere
Carson goes on to say that using Trade-In Marketplace as part of an
in-store process enables the sales representative to establish a rapport
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Case Study
with the customer and move them through the sales process while
helping to avoid possible pitfalls. “It’s always a good idea to let the
sales rep walk the customer through the process,” he says. “I wouldn’t
necessarily want the customer to just do it on their own without some
explanation. Plus, I want to get the information keyed in correctly
because it’s going into vAuto and it’s also going on the four square.”
Costs vs. Benefits
Carson says getting caught up in analyzing the costs of doing business
can lead to underestimating the benefits of new tools and processes
— particularly when it comes to implementing new technology. “We
had been paying for Trade-In Marketplace on AutoTrader.com for
about 90 days and it didn’t seem like it was generating the traffic we
were hoping for,” he says. “But then we started using it on our website,
on our Craigslist ads and everywhere else, and solidified it as part of
our in-store process. I actually went to my sales manager and said,
‘Hey, how do you like this?’ And he said, ‘It makes my job easier, but
if it’s costing money, I’m not sure that it’s making that much difference.’
But when we crunched the numbers, we saw the benefit.”
In addition to objectively assessing pre- and post-Trade-In Marketplace
data to arrive at an accurate cost-to-benefit analysis, Carson stresses
the importance of ensuring that Trade-In Marketplace is completely
integrated into the sales process and is being used correctly. “You
may think you’re doing the process right all the time even though
you’re not,” he says. “You may be skipping Trade-In Marketplace a
couple of times here and there, and that can make all the difference.
Doing it right all the time, every time is the key.”
“You may be skipping Trade-In Marketplace a
About Cox Automotive
Cox Automotive is the world’s leader in vehicle remarketing services,
and digital and software solutions for automotive dealers and consumers.
Cox Automotive, a subsidiary of Cox Enterprises, includes Manheim,
AutoTrader.com, Kelly Blue Book, and a host of global automotive
businesses and brands serve more than 90,000 customers, including
auto dealers, manufacturers and financial institutions. Headquartered in
Atlanta, GA, Cox Automotive employs more than 24,000 employees,
and generates annual revenues of more than $4.3 billion.
About Trade-In Marketplace
AutoTrader.com’s Trade-In Marketplace is the only tool available in
the market today that gives consumers an instant offer on their Used
cars while setting expectations on the trade-in value of their vehicle.
For consumers, Trade-In Marketplace is a free resource that offers a
no-haggle way to get an instant offer on their car, sight unseen, which
they can take to a participating dealership to turn the offer into cash
or use toward the down payment on another car. To be a participating
dealer in the Trade-In Marketplace program, dealers pay a monthly
subscription that gives them access to consumers who generate a
trade-in valuation through the tool. Instant Cash Offers provided
through Trade-In Marketplace are calculated and generated by an
AutoTrader.com third-party vendor using an algorithm that takes into
account local market data, including what other dealers in the market
would be willing to pay for the vehicle on trade. Participating Trade-In
Marketplace dealers do not have any input or influence on the tradein value generated by the tool. The third-party vendor assumes the
risk on behalf of participating dealers that the vehicle will be worth at
least the amount of the Instant Cash Offer, and in return, receives a
share of the overall subscription revenues generated by the program.
couple of times here and there, and that can
make all the difference. Doing it right all the
time, every time is the key.”
And Carson says that once the dealership staff is fully trained on how
to use it, Trade-In Marketplace makes everyone’s lives easier. “I can
understand how a Used car manager might be reluctant to try it, but
the bottom line is that it has increased our profits while making
everything easier. It’s easier for the customer because they know that
they’re getting an acceptable trade-in offer since they are included in
the process and have a better understanding of the factors driving the
valuation. It’s easier for the salesman because he can be the good guy
and give a little bit more for the trade when possible. It’s easier for the
sales manager because all the information is already in Trade-In
Marketplace, so there’s no redundancy. And it’s better for the store: an
average of $600 more on trades. I was surprised. I would encourage any
dealer to use this great tool to improve your store’s profits,” he says.
Initially launched in a few select markets in June 2009, Trade-In
Marketplace became available nationwide in October 2010. One
year later, AutoTrader.com partnered with Kelley Blue Book, a
subsidiary of Cox Automotive, to bring Trade-In Marketplace to the
KBB.com website. For more information on the Trade-In Marketplace
program, dealers can visit TIMfordealers.autotrader.com or speak
with their AutoTrader.com representative.
© 2014 AutoTrader.com, Inc., All Rights Reserved. “AutoTrader,” “AutoTrader Classics,” “AutoTraderClassics.com,” and the AutoTrader Classics logo are trademarks or registered trademarks of TPI Holdings, Inc., all used under exclusive license.
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