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Zag question

JesseJ

Refresher
Mar 22, 2011
113
5
18
First Name
Jesse
Our dealership is trying to figure out how to make the best use of Zag. We are not a volume dealership by any means. We sold 66 cars last month and that was a very big month by our count. That being said, we don't blow everything out at invoice.

Our sales manager has the zag pricing set to offset the zag fee. $300/new car sale. $400/used car sale. For those unfamiliar with zag, ever one who requests a quote is shown three quotes by dealers within 120 miles. Some dealerships have their pricing set below invoice before incentives. I'm trying to figure out how they can possibly honor this price.

Does anyone have feedback on the best strategy for ZAG pricing?
 

ECURB

Refresher
Feb 19, 2010
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Bruce
There is more to a deal than strictly profit made above invoice... selling a car at $500 below invoice does not mean the dealership has top lose money... but it certainly increases that risk...
 

JesseJ

Refresher
Mar 22, 2011
113
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18
First Name
Jesse
Right, obviously there is back end profit and that sort of thing but it is my understanding that dealerships must honor the pricing they post on ZAG. Of course, what that's kind of a hollow rule that's not very enforceable.

I guess that answered my question though. Seems like they are just trying to blow vehicles out and make up the profit on the back-end.
 

Marc McGurren

Getting Refreshed
Nov 30, 2009
96
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Marc
Jesse - we are CRAZY competitive with our pricing with Zag. You basically have to be to make it worth your time. We had a great month in April with Zag. We had 108 total leads and sold 8. Averaged over $900/front (with hold back) and $1150/back for a total gross of $2050/unit on average.

You don't have to the lowest, but you do have to be competitive. The gross will come - you just have to give yourself the opportunity for it to come your way...
 

JesseJ

Refresher
Mar 22, 2011
113
5
18
First Name
Jesse
Marc,

What's your pricing normally look like? How far above or perhaps below invoice? We also normally get in the area of 35 leads/month from Zag but that could be because of the way we set our pricing.

Jesse
 

Marc McGurren

Getting Refreshed
Nov 30, 2009
96
1
6
First Name
Marc
We are a full line GM dealership and pricing is all dependent on where the market is and the availability of that particular vehicle. Our bread and butter cars we get very aggressive for volume. But we are typically "green" in all vehicles. It does give us an idea on what else the market is doing as far as pricing and gives us a base line to work from. But to be more specific - 95% of the time I am pricing them below invoice.
 

JesseJ

Refresher
Mar 22, 2011
113
5
18
First Name
Jesse
That's very helpful to know. Thanks a lot. Do your vehicles ultimately sell at the original quoted price?
 

danoneil

Sr. Refresher
Apr 16, 2009
558
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Dan
We are a zag dealer. But due to Honda's strict policies, we started to not send a price at all and we still get the lead. So who says you have to quote an immediate price ? You do need to have a process in place that gives a quick quote. However you can review where the zag customer lives and that could help determine the price you send.

We get the lead, say thank you etc & we send our current internet price. I add the following to the quote. We know you will receive 3 quotes from other USAA dealers. We'll be happy to compare any line by line quote from other USAA dealers to earn your business.
Is there a 1st or 2nd color choice ?

Just a thought...
 

danoneil

Sr. Refresher
Apr 16, 2009
558
32
28
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Dan
Honda's consider's all ZAG quotes to be an advertised price. If you quote a advertised price under invoice, it is violation of Honda's dealer agreement. We don't agree with Honda's assessment, but we have decided to take a no risk approach. We have not been sending automated quotes for over 7 months.