Car dealers don’t always have the exact cars customers want in stock. Even if they have, they may not have the exact trim level, color, or desired accessories. As a result, most dealers would want to pursue a dealer trade to keep a customer.
A dealer trade is basically an exchange or swap of vehicles among dealerships. Rather than losing the customer, dealers swap or trade similar vehicles among themselves to satisfy the needs of a particular buyer.
Dealer trades come with benefits for dealerships and customers alike, but they don’t always yield the expected results. So before pursuing a dealer trade, it is vital to consider what it entails.
Once a customer agrees to pursue a dealer trade, the dealership will either ask for a deposit or for the customer to complete a credit application form to ensure their commitment. The dealership will then use a search tool that’s exclusive to dealers to locate a vehicle that meets the specifications of the customer.
When they are able to locate one, they will request a trade. The exchange will take place if the other dealership agrees. But sometimes there is no exchange, and the dealership giving up their vehicle simply chooses to reserve the favor for an occasion where they may also be needing a specific vehicle to make a sale.
Here are the pros and cons involved in a dealer trade:
It can take a significant amount of time to find a vehicle that matches a customer's taste and preferences. The same applies when the customer chooses to make a custom order. But the process is faster when a dealer trade is used. Using the available search tool, dealers can search a wide range of vehicles across multiple dealerships to locate the preferred vehicle within a few hours.
The perfect vehicle may be several miles away or out of state. It will require some effort to locate, and there will be the need to make arrangements for transporting the vehicle. Dealer trades take this burden away by handling everything from searching for the vehicle to delivery. No need to do any additional work.
Conducting a search for a vehicle implies contact with multiple dealerships and sales staff who use various tactics to sell whatever car they have in stock. Dealer trades enable customers to avoid such pressure by working with one dealership and still getting the car they want.
It may be difficult to find the exact car for a customer. It may simply be unavailable, or the dealership with the required vehicle may not be willing to pursue the trade. Hence there is no guarantee that the dealer will be able to find the car required.
Dealer trades may not offer the lowest price because customers do not get to deal with the dealer that has the vehicle. Additionally, the dealership will factor the transportation cost incurred during the exchange into the price of the vehicle. This means that customers will end up paying a little extra for a dealer trade than when they conduct the search on their own.
Some dealerships may not be willing to trade certain vehicles depending on the situation or the vehicle involved. Examples include when a particular vehicle is limited in supply or when it is in high demand. In such situations, most dealerships may not be willing to give up their vehicles.
Considering the pros and cons of a dealer trade, it can be a bit confusing to determine when to and when not to settle for a dealer trade. Deciding if a dealer trade is right for you depends on the circumstances and personal preference.
If time and convenience are a concern, then pursuing a dealer trade will be appropriate. However, if the price is your concern, it’ll be best to conduct the search on your own. When pursuing a dealer trade, it is vital to negotiate and agree on the price before moving forward. It is also necessary to get everything in writing, including what will be done if the agreement cannot be fulfilled, such as refunding the initial deposit made.
Dealerships undertake dealer trades to keep customers, and it comes with some benefits to the customer, like convenience, promptness, and simplicity. But there are a few downsides, with price being the biggest concern. It is, therefore, essential to consider the details of a dealer trade before agreeing to go to it.
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