More and more, dealers are admitting that whether they want to be a one-price dealer or not that they are sort of being forced into it because of the pressures from today’s market. That being said, there’s a very small percentage of dealers who have made a commitment to being a one-price dealer.
If you’re one of those dealers who still negotiate the price of your new and used cars let me suggest you go back to some old-school of under-allowing on trades. Not just some of them. All of them.
When I ask the question of managers if they under-allow, most will say yes, some of the time. Bad idea. If you’re going to do it, go all in and do it with all of your customers, not just those you think are stupid or drunk. That may be a little harsh, but I want you to get the point. Stop picking and choosing.
I’ve attached my world famous under-allowance grid. You may not like mine and that’s fine. Come up with your own. Then come up with the discipline to serve it up to everyone that has a trade.
If you do so, one of three things will happen:
1. The customer says “yes.” Bam, you made some gross you would have never made.
2. You have to peel the customer off the ceiling. No problem. That’s why you get paid the big bucks.
3. You have now checked the customer’s temperature and gotten their thinking in line.
Don’t act all righteous and say you don’t want to do this because you want to be transparent. If you wanted to be transparent you would stop negotiating and show everyone the invoice.
If you’re going to negotiate in today’s market you need every tool or advantage you can get.
Let the old-school gang smile again. That’s all I’m gonna say. Tommy Gibbs