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What is a Vehicle Exchange Program?
As a car owner, you may have received a notice saying that you qualify for one.
As a dealer you may have noticed a competitor marketing one.
So what is a Vehicle Exchange Program (VEP) after all? And save the marketing pitch, what is really going on here?
Who actually benefits from one of these programs and how do they work?
We've got the answers for you along with a transparent outline of why dealerships are offering these, who can qualify, and what should car owners consider when offered a chance to participate.
The Nitty-Gritty: An Overview of How a Vehicle Exchange Program Works
Often referred to as a Vehicle Exchange Program or a Vehicle Upgrade Program, dealerships offer these specialized trade-in programs to select car owners.
When a car owner has made enough payments on the car to fit a specific percentage range (this range varies depending on the manufacturer) they can qualify for the VEP.
This means that the dealer will actually buy the car back from the car owner, and put them into a brand new vehicle with similar upgrades. These deals are always negotiable, but generally, the idea is that the vehicle owner continues making the exact monthly payment they were before, while also upgrading into a brand new vehicle.
Dealerships and Vehicle Exchange Programs: Boost Sales and Hit Objectives
Most automotive retailers today have objective-based manufacturer incentive programs.
If the dealership does not hit their objective, the variable gross suffers, so it is mandatory to hit a certain amount of sales for the month.
A VEP allows dealerships to boost their total new vehicle sales in order to hit and surpass their objectives and allowing them to achieve larger incentive payouts from the manufacturer.
By offering these vehicle upgrade programs, many dealers see huge increases in new car sales, because they are marketing to current vehicle owners.
“It is not uncommon for some vehicle car owners to trade up to a new vehicle, with more upgraded options, as early as their first oil change. Giving the dealership a new car sale, and a used car to sell on their lot.”
Car Owners and Vehicle Exchange Program: Upgrade Vehicle without Paying More
As a car owner, the value is easy to see. They make the same payment they are currently making, but upgrade to a brand new vehicle without making a down payment. These programs are really a win-win for a car owner.
The biggest thing to consider is that the benefit is mutual as you have maintained and nourished an existing relationship.
It is not uncommon for some vehicle car owners to trade up to a vehicle with more upgrades as early as their first oil change.
Giving the dealership a new car sale, and a used car to sell on their lot.
Getting Started with a Vehicle Exchange Program
For dealerships looking to implement a Vehicle Exchange Program (VEP) to boost new car sales and surpass objectives, the first thing to do is to look at which elements need to be addressed.
Dealerships that offer winning Vehicle Exchange Programs know that they must be marketed and implemented correctly.
Contact me, Thomas Ieracitano, for a free consultation to get started.