Tuesday, August 26, 2014

My trade in is worth HOW much!? Part two.

Last time, we talked about some factors that do and do not affect the actual value of a trade in vehicle to a dealer, such as mechanical condition or aftermarket accessories. Another factor that may cause a shopper to ascribe more value to their trade in vehicle than it is actually worth is what is known as the "endowment effect."

Think about a garage sale. Buyers love them, because they can get an item for much lower than retail price. On the other hand, the seller usually has to deal with some discomfort because they don't feel that they are getting as much money for their belongings as they should. But this same seller will go to a different garage sale and expect to pay less than the asking price for someone else's belongings.

Turning this example toward vehicles, Steve shares a scenario that has played out many, many times:
I can't tell you how many times someone has come in with a truck that has 220,000 or more miles on it, and they tell me, "this is a good truck." I say, "well, it's got over 200,000 miles," and they come back with, "yeah, I know it. But this is a good truck." Then they go to look at a truck that has 80,000 miles and come out with, "Hoo boy! That's a lot of miles!" And I have to tell them, "Well, it's not 220,000."
 Steve's anecdote is a prime example of the endowment effect. People tend to ascribe more value to something merely because it belongs to them. In other words, they expect to get more for something that's theirs, than they would pay for the same thing that was new or belonged to someone else.

This is where Steve and Breck's experience and simplicity in dealing with shoppers comes into play. They are very good at talking through the factors that affect vehicle values in a way that is informative without being disrespectful. This way of relating to shoppers is what has earned our reputation as a "no pressure" dealer with so many buyers.

Keep in mind that the used vehicle market is always changing. Steve and Breck are more than happy to guide you through your search.

For more information on the Daniell Motors family, and to find your own vehicle, visit DaniellMotors.com.

Questions? Comments? Concerns? We'd love to hear them. Tell us what's on your mind in the comments!

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