How Do You Handle Pricing Online?

[Ryan Hartigan]

I've been really interested in this over the last few months...

Everybody in the industry knows that online pricing is misleading, to say the least...

That's not the real price of the car. You're going structure the deal however you want to structure the deal, and you know the customers going to focus on their monthly payments and you're going to add all the warranties, carbon/tire tax, interest, dealer reserve, admin fee, whatever else you want to add.

So I always thought it was interesting - thinking about the best way to do this online.

No judgement here, either. I know some dealerships will find the lowest price of a vehicle online and then lower their inventory price by $2000 just so they can get the lead.

Sure it's misleading, but it's smart. Especially in an industry where most of the prices are false.

A lot of dealerships use a monthly payment strategy - and of course, we all know that's never true either.

Some dealerships don't put pricing, but that means that you're non-competitive now, and you're probably losing leads to the dealerships that put in the lower pricing.

What does your dealership do? How do you think about this?

Is it an issue in the space? How do we solve it?

Is there anything that I'm missing here and I'm viewing the whole thing wrong?

Let me know your thoughts!

 

[jbarron]

It's 2017. A customer wants the information that they request, or they will go somewhere else. If my team sends out a price, that's the price we honor. We are a Toyota store, so we are bound by marketing covenant on mass marketing scale. All the stores near us in our Metro price at invoice plus doc fee (Tennessee law), minus rebates. Once the customer submits a lead though, we are extremely aggressive in our PMA and out of it. No games or gimmicks, that's the price ill pencil them at when they arrive. The only thing that would change is rebate to special interest rate.

 

[AdamMurray]

Yeah, I'm not sure I wholeheartedly agree with your assessment as indicative of the whole industry. Are there stores that do that? Sure, I imagine they exist. However, I can't imagine these tactics can work for very long. First, most of the factories are policing our online pricing and, second, the states AG offices have been doing the same. Some states are worse than others, for sure.

Working payments is nothing new, though, and has been a driving force for many years. IMO, we need to work them harder and figure out how to do it better. Packing payments and wrapping up deals with 75 month terms is awesome but, long term, we're just screwing ourselves...and it will be reflected in our #'s these next few years.