Restoring trust

Основные RGBConsumers think they know how much their used vehicles are worth. They’ve spent hours researching their make and model online to come up with what they think is a fair appraisal.

What’s not always factored into the appraisal is mileage, any damage, or prior accidents.

“They are walking into the dealership with the false expectation that their vehicle is worth very close to what they’re seeing them listed online for,” said Shawn Vording, Director of Product Management at CARPROOF.

The result can be a long and painful negotiation with the dealer — something CARPROOF wants to help dealers avoid.

The vehicle history report providers have launched a new tool based on actual retail and wholesale transaction data to help dealers come up with a more accurate trade-in value.

Dealers have said they’re having an “education moment” with the consumer by being open and transparent

It’s aimed at eliminating negotiation from the vehicle appraisal process, and improving transparency between dealers and consumers.

The new product was developed out of a theory that the auto industry operates much like housing, said Chris Afonso, Vice-President of Dealer Sales at CARPROOF.

“It doesn’t matter what a house is listed for. If you buy a house, your realtor is always just focused on what your house is selling for,” said Afonso.

To support that hypothesis, it took CARPROOF three years to secure good quality data to help dealers come up with an accurate appraisal. Now, dealers have enough data to know what similar and comparable cars are selling for, said Afonso.

Dealers who subscribe to CARPROOF’s Vehicle Valuation Report can access data on every car within a hundred kilometre radius, such as what a vehicle sold for, its odometer reading and any damage.

The report also includes an offer sheet which dealers can use to explain any costs for reconditioning or other deductions on the vehicle, said Vording.

Looking at the math outlined in the offer sheet, it’s tough for consumers to dispute the numbers, he added.

The dealers who took part in the soft launch of the product have said they’re having an “education moment” with the consumer by being open and transparent, said Afonso.

This also helps dealers be more transparent when they are listing a vehicle online by pricing it closer to what it will sell for, taking negotiation out of the equation, said Vording.

“It’s what we’re calling the “negotiation curve” at the office; it ultimately eliminates the need to inflate a price for the unknown of negotiation,” he said. “The new way of conducting business is to appraise vehicles based on retail sold values, not what they’re listed for.”

Now that the company has tested its product in about 400 dealerships, the plan is to roll it out nationally in April 2016, which coincides with the Auto Remarketing Canada conference in Toronto.

The company said its vehicle valuation tool is part of its larger commitment to drive transparency within the auto industry.

In 2015, CARPROOF announced it had invested $1-million into the Transparency Advantage, an industry-led think tank comprised of representatives from dealer groups and OEMs across the country.

Vording believes some dealers will be on board with the new tool right away, just as they were with the company’s vehicle history reports. Other dealers may take more time to come around, said Vording.

“If we can get a critical mass, and critical mass might mean one or two dealers on a street, one or two dealers in an auto mall, it quickly spreads because customers are looking for it,” said Vording. “The consumer will ultimately dictate.”

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