Consistent and Connected Appraisals: A Pathway to Profitability and Trust

In the ever-evolving automotive market, dealers are constantly seeking ways to improve their profits and processes while building stronger relationships with customers. It’s important for every dealer to balance these objectives: When you lean too hard on your profitability, you run the risk of disrupting a customer’s desire for confidence and trust; when you over-index on serving customers, your profitability can suffer.

A dealer’s need to balance the objectives of improving profits and process while building strong relationships with customers is especially critical during vehicle appraisals with customers. The appraisal process, and the difference between the value a dealer offers and the customer expects, have long been a source of contention. Dealers can reduce, if not eliminate, this friction by Implementing a more customer-connected and performance-consistent appraisal process that leverages the latest technology and integrations to help dealers maximize every trade while also building customer trust and confidence.

Dealers can achieve these outcomes by combining the strengths of Kelley Blue Book® Instant Cash Offer (ICO) and vAuto. This blog post explores the factors driving the need for this approach and how it can improve a dealership’s bottom line.

The Need for a Consistent and Connected Appraisal Process

For many dealers, their appraisal suffers from process inconsistencies. Through vAuto data, we can see 28% of reconditioning estimates miss actual reconditioning costs by $750¹. This disparity, which has significant impact on the profit potential of a vehicle owes to appraisal process inconsistencies. That is, from one appraiser to the next, there are differences in how they assess and capture a vehicle’s condition.

Such valuation inconsistencies are likely to rub consumers the wrong way, causing their confidence and trust in your dealership to suffer. Why? Because today’s consumers are doing more research before disposing of their vehicle. In fact, the average consumer has 2.6 cash offers at the time of sale², which means they have a number in mind. Consumer research also tells us that dealers’ current appraisal processes leave many customers with unmet needs, such as understanding what is important on the vehicle, potential undervaluation, and market demand for that make and model.

Some dealers resolve the friction through a consistent and transparent appraisal process that includes a) requiring appraisers to itemize reconditioning costs and b) sharing their findings with customers, so they’re aware of how and why you arrived at your appraisal offer. vAuto data shows that 61% of appraisers who use real recon estimates acquire two times more vehicles³.

Here are a few more ways a consistent, connected appraisal process can benefit your dealership:

Building Trust Through A Trusted, Third-Party Appraisal Brand

Kelley Blue Book is widely recognized as The Trusted Resource® by consumers and dealers. In fact, it’s the #1 most trusted site among ready-to-purchase consumers ⁴. Through the combination of Kelley Blue Book® Instant Cash Offer and vAuto, dealers can tap into this trust. When consumers initiate a Kelley Blue Book® Instant Cash Offer at home, it builds trust and confidence in the appraised value of their vehicle. Their trust in the Offer carries over to the dealership that they choose to engage. With the Kelley Blue Book® Instant Cash Offer and vAuto integration, dealerships can use the offer as a starting point for appraisals, creating a consistent, familiar and more transparent path for consumers and appraisers to arrive at a vehicle value.

Gain Efficiency With a Streamlined Appraisal Workflow

Efficiency is crucial across dealership operations, and a connected appraisal process aims to streamline appraisal workflows. By pairing Kelley Blue Book® Instant Cash Offer with vAuto’s advanced tools, dealerships can reduce the time and effort required to complete appraisals. This streamlined process allows dealerships to focus on meeting customer needs more efficiently, which builds their confidence in your offers and yields a more satisfying experience.

Acquire Vehicles with Greater Profit Potential

One of the significant advantages of the connected appraisal process is its positive impact on your Cost to Market averages for appraised vehicles you acquire. Dealerships that use Kelley Blue Book® Instant Cash Offer and vAuto can achieve a 3.7% lower cost-to-market compared to those that do not⁵ use the tools together. This reduction in cost is achieved through the confidence and trust the connected appraisal process empowers with consumers and the more accurate assessments of vehicle condition, which helps dealers maximize their margins and remain competitive.

Conclusion

A consistent and connected appraisal process offers numerous benefits that can transform the way dealerships operate. By leveraging the power of Kelley Blue Book® Instant Cash Offer and vAuto, dealerships can enhance efficiency, build customer trust, and reduce costs—all while acquiring more vehicles with greater profit potential. Understanding and implementing this process can help dealerships stay ahead in the competitive automotive market. Speak to a team member today to learn more.

1. vAuto + Dealertrack data, 2022–2023
2. Cox Automotive, vAuto’s Provision data from March–June 2022*
3. Cox Automotive Research & Intelligence Data
4. Cox Automotive Q3 2024 Consumer Brand Tracker Research. Based on consumers intending to purchase a vehicle within six (6) months of being surveyed.
5. Average ICO Margin % vs. non-ICO Margin % across all dealers with vAuto inventory from October 2023 to September 2024