To stay on top, you need to shop.
Dealerships that continually update their pricing as inventory ages are likely to be the most successful on the Internet. But you need to do your homework and stay on top of the marketplace. Savvy dealers consistently shop their competitors’ online listings to ensure that they update their pricing to remain consistent with market conditions.
It’s vital to surf your competitors’ listings for information on how to price vehicles prior to listing them. After all, competing dealerships are no longer 10 miles, 5 miles or even 100 yards away in today’s online market. Your competition and their pricing is only 1/4 inch away.
Dealers have also come to understand that a simple formula over/under invoice will not drive the volume of traffic that they desire. This type of formula doesn’t take into consideration competitors’ pricing, and as a result, can be out of line with the market.
How low should you go?
Some dealerships believe that they must promote the lowest price with their online listings, but the reality is actually quite different.
Many shoppers believe lowest price indicates that there is something wrong with the vehicle, especially if the price is substantially lower than that of similar vehicles. If the price is the highest, shoppers assume they won’t be able to get a fair deal from the dealer. If no price is listed, they assume the worst.
Finally, it’s important to remember that every used car is distinctly different and pricing should take into account the vehicle’s distinguishing features and condition. Instead of offering the lowest price, take into account the vehicle’s options, condition, and mileage to arrive at a competitive price.