Online car-pricing service TrueCar has launched a trade-in valuation tool meant to drive consumers to its dealer partners and, subsequently, boost origination volume for lenders. Consumers plug information about their vehicles into the tool, which then generates a guaranteed trade-in value powered by Galves Accu-Trade.
“We’re able to take that information, which is inclusive of the mileage and current conditions in need of repair, and we’re able to give a live offer for a vehicle that is redeemable at any dealer within our network,” TrueCar Executive Vice President Brian Skutta told Auto Finance News.
“If we put a valuation of $10,000 on a car and once the consumer has sold the car to the dealer, if for whatever reason the dealer didn’t want that car, they could sell it to us for the same $10,000 paid to the consumer,” Skutta said.
The feature, called TrueCar Trade, piloted in April at 100 dealerships throughout New York, New Jersey, and Pennsylvania. Earlier this month, it was rolled out nationwide. Currently, 600 dealers are using TrueCar Trade; the company expects that number to climb to 1,000 by yearend, Skutta said.
For lenders, look-to-book ratios should be 1.5 times higher among dealers who use the trade-in tool compared with those who don’t, Skutta said.
“This means more efficient and increased transactions for the dealer, which is volume for the lender and the captive,” he added. More than half of the consumers who use the trade-in product will sell or trade in their vehicle, the company noted. “According to J.D. Power we touch just under 50% of all new car shoppers in America, for our dealers that audience is significant,” Skutta said.