Trade-ins: appraisal and manager approval
How the Automotive pack records a trade-in inspection, uses the appraiser's figure as the allowance and has the used-vehicle manager approve it.
By Achekam · · 4 min read · For Automotive businesses in South Africa, Nigeria, Kenya
Launching soon. The Industry CRM add-on described in this article is launching soon. This article describes it as it will work at launch.
Ask a dealer principal where the margin on a vehicle sale really goes, and the trade-in will come up quickly. A salesperson keen to close tells the customer their old car is worth a generous figure. The deal is signed, the trade-in arrives in the yard, and the used-vehicle manager discovers it needs tyres, a windscreen and a gearbox repair. The profit on the new sale has been spent on the old one, and nobody can say who agreed the number.
A disciplined trade-in process does not make customers' cars worth less. It makes sure the figure on the deal comes from someone who looked at the vehicle, and is approved by someone accountable for the used-vehicle stock. The Automotive pack in Achekam's Industry CRM builds that process into the vehicle sale.
Trade-ins travel with the vehicle sale
In the Automotive pack, a Vehicle sale can include a trade-in. The trade-in is not a separate deal agreed in the corridor; it sits on the sale it belongs to, so whoever reviews the sale sees the new vehicle, the price and the trade-in allowance together.
The sale moves from Enquiry to Test drive and needs, Deal on the table, Finance applied for, Offer signed and Delivered, or is Lost with a reason. In practice, the trade-in needs to be settled by the time the deal is put on the table, because the customer's decision usually depends on it.
Inspecting the trade-in
In the pack, the trade-in is inspected first. What a good inspection covers is your dealership's call, but most used-vehicle managers want answers to the same questions:
- Identity and papers. Do the registration papers match the vehicle? Is there outstanding finance on it, and how much will it take to settle?
- History. Is there a service book or service records? Does the mileage make sense with them?
- Condition. Bodywork, glass, tyres, interior, and any signs of accident repair.
- Mechanical. A short drive and a look underneath: engine, gearbox, brakes, suspension, warning lights.
- Completeness. Spare keys, the manuals, the spare wheel and tools.
Write the findings down at the time, with photographs. A trade-in figure without an inspection record is just an opinion.
The allowance is the appraiser's figure
After the inspection, the trade-in allowance is the appraiser's figure. The pack has no valuation engine: it does not look up a guide price, scan auction results or suggest a number.
That is a deliberate choice, and it keeps responsibility clear. The appraiser uses whatever sources your dealership trusts, such as trade guides, recent auction prices and your own sales history, together with the inspection, and puts their name to a figure. If the trade-in later turns out to have been over-valued, the dealership can go back to the appraisal and the evidence behind it, and learn from it.
A useful habit: the appraiser records not just the figure but the main reasons for it, such as "needs two tyres and a service" or "low mileage, full history". Those notes make the approval step quicker and the eventual resale easier.
Approval by the used-vehicle manager
The appraiser's figure is then approved by the used-vehicle manager, the person who will have to sell the vehicle on. That is the right person to approve: if the allowance is too high, it is their stock that carries the loss.
Keep three roles apart wherever the size of the dealership allows:
| Role | Responsibility |
|---|---|
| Salesperson | Introduces the trade-in and passes on the customer's expectations, but does not set the figure |
| Appraiser | Inspects the vehicle and proposes the allowance with reasons |
| Used-vehicle manager | Approves, adjusts or declines the allowance |
In a small dealership one person may wear two hats. Even then, the salesperson closing the deal should not be the one approving the trade-in. This is segregation of duties, which AccountingTools explains as assigning the steps in a process to different people so that no one can both commit and conceal theft or error.
A trade-in in words
A customer arrives to look at a new bakkie and wants to trade in their sedan. The salesperson books the test drive and asks the appraiser to look at the sedan while the customer is out. The appraiser drives it, notes worn tyres and a missing spare key, checks the service book, photographs the scratches on the rear bumper and proposes an allowance with those reasons. The used-vehicle manager reads the notes, agrees the figure and approves it. When the customer returns, the salesperson can put a complete deal on the table, with a trade-in figure the dealership will stand behind.
The trade-in on the deal
Once approved, the allowance is part of the deal put to the customer. In the Industry CRM, some pipeline stages can only be entered once set conditions are met, such as a customer being named or an amount being set, which helps keep a deal from moving on with blanks in it.
A common temptation deserves a firm rule. When a deal is close and the customer wants more for their trade-in, the sales manager may be willing to give a better overall price. Record that as a discount on the new vehicle, not as a higher trade-in allowance. The used-vehicle stock then carries its true value, the new-vehicle margin shows the real discount, and the next appraisal is not distorted by a figure that was never about the car.
Getting it right from the first trade-in
Agree what the inspection covers, name your appraisers and your used-vehicle manager, and make the discount rule explicit to the sales team. The rest of the sale then follows the pipeline described in vehicle sales from enquiry to delivery. Once the customer is driving their new vehicle, the workshop relationship begins; workshop job cards signed electronically covers that side.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
