Is There a Tariff Tornado?

Here’s the headline and first sentence from Automotive News published on July 2, 2018:

“Tariff tornado: Prepare for impact”

“A 25 percent tariff on imported vehicles could chill new-car sales, devastate dealership profits and trigger job losses at stores, dealers and their advocates say.”

Let’s assume that this is true. Let’s assume that tariffs of any type have the potential to hurt the automobile business.

Isn’t a pack a self-imposed tax? Aren’t you adding a cost to your unit that does nothing for the unit?

It doesn’t make it prettier.
It does make it run better.
It doesn’t add one lick of value.
It doesn’t help you sell the unit.

I fully understand all the “whys” of adding packs. They have served us well over the years prior to the advent of the Internet, and prior to dealers using pricing tools to market their inventories online.

Every day that goes by, you’re moving more and more toward becoming a one-price dealer whether you want to or not. And, whether you like it or not, you’re moving closer and closer to not paying sales people on gross profit.

Paying sales people on gross profit doesn’t make a lot of sense when management has already set the price online and there’s less and less negotiation going on.

If either or all of those statements are true for you, then please tell me how taxing yourself makes good business sense?

If you find a shred of truth in what the media has been reporting, then you must agree to the following: tariffs have the potential to hurt sales because of the added cost to items.

That being true, then how can you deny that your “Pack Tariff” isn’t hurting you when it comes to buying and selling used cars?

Let’s assume that you’re in a state that has a sales or titling tax. And, let’s assume the state drops the sales tax for all dealers except you. Would you be at a disadvantage? Of course you would.

So why do you want to keep putting yourself at a disadvantage by having a “Pack Tariff?”

Think how much you can help morale and help your sales if you could do away with taxes. Stop taxing yourself. That’s all I’m gonna say, Tommy Gibbs