Tag: trade-ins

What To Do About Trade-In “Freeloaders” On Your Lot

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When you take a vehicle in on trade, it starts out at the dealership as an honored guest. After all, it’s there to be re-sold at a profit.

But when it takes a long time to get a clear title, soon that same vehicle reveals its secret identity as a freeloader: a trade-in without a clear title that takes up space on your lot, costs you interest, and racks up other holding costs that eat into your profitability day by day.

According to Dealertrack data, the average industry timeframe for vehicle title release and payoff is 18 days or more. And data from a 2019 NCM Associates Group Study puts average holding costs at $37 per day, per vehicle. So that means the average freeloader chews up nearly $700 in profit potential while sitting idle on the lot waiting for the lender to receive the payoff and ship the title back.

Turning Freeloaders into Profit Earners by Shortening Their Stay

Dealertrack manages paper and electronic titles for numerous lenders, which makes them uniquely positioned to speed trade-in title release for dealers. Dealertrack Accelerated Title® helps a dealership complete payoff and title release for trade-ins up to 70 percent faster, so the clear title arrives in as fast as 4-6 days.

That means you can hustle those freeloaders off the lot more quickly, help maximize your profit potential, and see the cash flow from re-sale or auction with less delay.

There’s an old saying, “Every guest brings you happiness. Some when they arrive, and some when they leave.” Accelerated Title can help ensure that your trades don’t overstay their welcome so they can bring your dealership happiness – and profitability – coming and going.

Sign up for a brief, live demo to find out how Accelerated Title can help your dealership avoid freeloaders.

Avoiding Title and Payoff Surprises With Trade-Ins

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Under the current market conditions, with new car inventory at historic lows, dealerships’ used car programs are more important than ever as a revenue and cash flow source. That puts increased focus on your dealership’s trade-in process, both for replenishing used car inventory and enticing car buyers to upgrade.

Now the challenge is to ensure that you have all the information you need to keep the deal moving smoothly.

The more you know…

Let’s say someone brings in a trade-in vehicle with great resale potential and they’re eager to purchase another vehicle from you. The customer tells you that nothing has changed with their name or address since they bought the car and they’re the only person listed on the title.

What you don’t know is that the title actually lists an old address – and the customer’s former spouse as the co-lienholder.

With manual processes and paperwork, that kind of revelation could take a while to surface and when it does, there’s a chance that your dealership could be stuck with a vehicle it can’t legally sell. At the very least, it will create extra work and hassle for you and your customer. At worst, it can cause the deal to unravel and leave you with the fallout if you’ve sold the trade to someone else or sold a new car to the customer who brought in the trade, valued with the vehicle they brought in.

When your dealership has access to a digital trade-in title solution, you can view all the title details immediately. That way, if there’s a potential problem you can begin to work it out with the customer then and there, before you even accept the trade. Having the information you need up front helps ensure smoother transactions and preserve your CSI scores.

Payoff perspective

Another manual trade-in process that can bring its own surprises is loan payoff. Having complete and reliable payoff information is important for desking clean deals. It also cuts down on time-consuming back-and-forth with the lender if you need to make adjustments.

A digital trade-in titling solution provides direct lender connections for real-time payoff quotes based on the payoff date and allows for immediate title release as soon as the lender receives payment.

Keeping cash flow moving

Why is all this important? Because delays in payoff and title release equal delays in cash flow. While the dealership waits for the title on a trade-in, holding costs accumulate and the potential for retailing or auctioning the vehicle is held back. The sooner you can have the title in hand, the quicker that cash flows into your bank account.

Find out how Dealertrack Accelerated Title helps keeps your trade-in process moving without any surprises.

Add Confidence to Every Trade-In Deal

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When your dealership uses a traditional payoff and title release process for trade-ins, there can be a lot of built-in uncertainty. Between the amount of time it takes to receive the clean title (18+ days on average) and the payoff surprises that can result from being unable to see the title details in advance, you can find yourself taking several calculated risks from the time you accept the trade-in until you’ve sold it or put it up for auction.

Fortunately, there are technology solutions that can address those risks and increase your confidence whenever a customer brings a car to trade in. Let’s look at some of these risks and how technology solutions for expedited titling can help you eliminate them:

The Man (or Woman) of Mystery

A customer comes in with a trade-in, but without their title in hand. He says he’s the only person on the title and so you went ahead with the deal. Later you discover that there was a co-owner on the title, but you can’t reach the buyer and you have no idea how to get in touch with the other person. Without the co-owner’s permission, you have a vehicle you can’t sell – and maybe a pending lawsuit as well.

Now let’s look at that same scenario for a dealership with the right technology on hand. As soon as the customer presents their trade-in, you can use the system to see a copy of the title. You discover the co-owner right away and ask the customer about it. That gives them the opportunity to get the necessary permission to sell the vehicle or proceed without the trade-in. Either way, you’ve eliminated uncertainty and risk.

Payoff Back-and-Forth

When you don’t have access to an accurate payoff amount up front, your back office must deal with the back-and-forth of cutting checks and overnighting them to make it right – which adds time and expense to the deal.

Improved technology can provide the accurate payoff amount from the start, and ACH payment capability will save you from having to produce paper checks and pay to have them delivered.

Is It Time Yet?

Even using low-tech payoff and title release processes that take weeks, most dealerships will proceed with reconditioning, then retailing or auctioning a vehicle with their fingers crossed that the timing works out and there are no titling or payoff surprises looming.

When you have a solution set that includes expedited payoff and title release that takes days instead of weeks, access to online status updates on demand, and visibility into title details, you’ll no longer have to hold your breath and hope your inventory turn timelines work out.

How Confidence Pays Off

When you know you’ll have payoff and title release completed quickly and predictably, it can pay off directly by keeping a lid on the holding costs that affect your profitability. A 2016 Manheim Online Dealer Community survey found that having a vehicle sit on the lot costs dealerships an average of $32 per day. When you know you’ll be ready with a title in hand, you can take steps to merchandise each vehicle online or get it to auction more quickly to help ensure that it stays on your lot for as little time as possible.

Ready to gain more confidence in your trade-in deals? Learn how Dealertrack Accelerated Title can streamline your payoff and title release processes.