Quoting Online w/o Destination Fee

[Alex Magnan]

I work for a small Honda dealer in the northeast and we have been running into issues with other local Honda dealers not including the destination fee in their price quotes. Obviously by doing so makes their pricing look more attractive to the customer, because we all know in today's economy their looking for the best price. I have talked to several ISM's nearby and they have told me they tried doing this in the past, but experienced issues with CSI and their referral business. Has anyone else had to deal with this at your stores? If so what did you do to overcome this issue with your customers? I look forward to any input you guys have.


Sincerely,


Alex

 

[Billfred]

I'd say it's grounds to position yourself as The Good Guy -- be open that you've included the destination fee, that it's a charge from Honda on the Monroney label, and that you want to ensure there are no surprises when they come in to test-drive. Boom.

 

[ddavis]

Has anyone else had to deal with this at your stores? If so what did you do to overcome this issue with your customers? I look forward to any input you guys have.

I had a competitor that put used cars up at ACV and then hit the customer with $4500 in ads. They showed hundreds of cars on their lot that had long been sold. They had more cars, on the web, than you could park on their lot. As soon as it sold, they would reduce the price. On new cars, not only was destination separate but also nearly $2000 in dealer installed options. They routinely quoted and listed cars that they didn't have and tell the customer that it was just sold. It wasn't isolated to one store. It was nearly epidemic.

The sad fact is that jick works, in the short run. Eventually, the dealership will suffer low CSI, bad reviews, and low repeat and referral business. By that time, most of those managers will be off to greener pastures.

We lost some customers to these tactics. On Saturdays, we always had pissed off customers, from these places, come in and lay down when they were treated fairly.

 

[DanMorgan]

Welcome to the madness of internet sales.....As Billfred said above, just position yourself as the good guy and hope for the best. It sucks all you can do is hope for the best because so many consumers may not even believe you when you tell them "the reality" and then say they're going there to buy and eventhough they probably didn't get the price they thought they were going to get most folks still buy at some type of number just to get it over with rather than come back and say You were right and buy from you. Sucks but again, if you can continually position yourself as the good guy you'll get some customers in.

The more I type this though it still comes down to getting the customer in. Perception of the deal is the key. "We'll beat any deal" etc etc do whatever to get the customer in, by staying as vague as possible but giving the customer small hints that you'll take care of them no matter what, which is of course the truth When you get the customer in front of you, that's the best way to at least have a captive audience to tell the customer what will happen if they go to the other dealership.

 

[ddavis]

Nobody appreciates having to compete against these tactics but at some point those dealerships will have to pay the fiddler. It is a monumental task for them to maintain a good reputation and treat customers this way. If you don't believe that reviews are important, this graph might change your mind. You can read the rest of the article here.

 

[john.quinn]

I never quoted taxes and tags -- but I never claimed to, either. Like with any negotiation, the real satisfaction level comes from HOW terms are communicated -- not WHAT terms are communicated.

You can certainly "do it right" without having to get into the weeds with every little tax and fee.

 

[VVAuto1]

Our market is filled with this and it's the most frustrating thing ever... To be frank it reminds me of the up to $5000 over KBB on your trade, it may start the conversation and get people in the door but your going to piss off a lot of people.... All you can do in my eyes is do the right thing and build your reputation 1 customer at a time. Hopefully when that burned customer looks for another dealer you pop up on google ....

 

[tomwhitejr]

Here are my two cents:

The OEM's price their vehicles online without destination charges. If you include your destination charges in your pricing online, you can in some instances show a higher price than what your manufacturer is offering on their website which can and will cause confusion with your prospects.

I've priced both ways and ended up going the price without destination charge. I rarely, if ever, encountered resistance using this method. It made our pricing consistent with our Manufacturer, and we clearly disclaimed our pricing on each and every vehicle we offered online. When I was at Suzuki of Wichita, we were the highest volume dealer in the USA with the 4th highest SSI/CSI scores. Not bragging, but you can clearly price this way without hurting SSI/CSI scores.

Your CSI/SSI is MORE affected by how you treat your prospects. Are you transparent? Are you genuine? Do you provide excellent service? Are your people nice? These are the items you should be concentrating on and NOT focusing on how you price your new cars.

Just sayin'

 

[ddavis]

Tom, I don't know the laws in Kansas but in the two States where I spent most of my career, it is against the Motor Vehicle Regulations for a dealership to price a vehicle less destination. It is my understanding that manufacturers are allowed to price their vehicles, less destination, if it varies from State to State.

It is hard to be genuine or transparent if you are breaking the law.

 

[tomwhitejr]

Yeah, I probably should have added the "it might depend on your State" caveat. Good call... What I was trying to convey that I think it's more important to worry about the experience you provide your prospects (whether they are online or on-the-lot) than just price alone. There certainly isn't anything wrong or black hat with pricing your vehicles less the destination charge as long as you are up-front with what you are doing. Obviously, dealers need to pay attention to their own state's regulations.