I want to talk to you about pricing and how dealers post prices on their used cars.
Some dealers do not post any prices on the cars sitting on their lot. A few don’t even post a price on the Internet. Some have an Internet price, but they don’t have an actual price on the cars. A few have the price coded on the car for the sales person. Some dealers require the sales person to get a price from the sales manager or they may have a price sheet in their pocket from which they will quote. About 1/3 of all dealers have a price on the vehicles on the lot that is different than the price on the Internet.
Dealers who follow any part of these procedures have an array of excuses for doing so. Some dealers will say they don’t want to post prices on their cars because they don’t want customers coming on the lot when they are closed, getting a price and being able to shop them. Really? Look Einstein, they’re gonna get a price one way or the other. Can you say Internet? (If you’re big in the Subprime business that’s a whole other subject.)
They will also say it’s because they want to give the sales person a chance to hit a homerun on the drunk that staggers into the dealership who doesn’t own a computer. Ok, they don’t actually say it that way, but that’s my real world way of putting it into language we all understand.
Let’s all raise our hands and agree that more than 80% of the people shopping a used car shop on the Internet. Now that I’ve gotten you to agree to that then let me give you another number that you might not want to agree with but it’s absolutely true. Here you go: 65% of the people who show up on your lot to look at a used car have been online, looked at your prices and don’t tell you so.
No doubt, a skilled sales person will attempt to find out such a critical piece of information, but you need to know going in that when you play the pricing game with your customers you are going to lose the game more times than you win.
Your credibility goes down the tubes as oftentimes the customer won’t say anything to you and just leaves because you quoted them something different than the internet price.
I’m going to share with you what I believe is the best way to achieve the maximum gross and sell the most cars with the minimum loss of deals.
Without a doubt your Internet price and the price of the cars on your lot need to match. You should consider a window sticker on the side of the car with all the equipment and a "Retail Price." Use whatever source you want to determine the retail price. Just make it a real big price.
Use an attractive hang tag (CLICK HERE FOR HANGTAG) to show the Internet price. The hangtag makes it very easy for you to make price adjustments whenever you make an Internet pricing change.
In today’s market there is no logical reason to approach the pricing of your used cars in any other manner. You must continue to do a better job of training your sales staff so they can justify that the Internet price you have posted is fair market value and your dealership is the place the customer needs to do business.
When the sales staff stops selling the price and starts selling the value you will sell more cars, make more money and have happier customers.
So, have I changed your mind about your pricing? Just remember "only canned sardines can’t change their minds." That’s all I’m gonna say, Tommy Gibbs