Know what the market has to offer
- It may seem obvious, but the best line of defense for holding gross on a used car is a competitive price. Set the sticker too low and people will think something is wrong with the car; place it too high and shoppers perceive your store as unwilling to negotiate. Look for direction from what the marketplace says the car is worth.
- Unlike new cars, used cars are unique; condition, mileage and equipment packages vary. If customers aren’t aware of these distinctions, they may try to get you to lower your price based on a similar vehicle they saw at another store. Itemizing the differences — and explaining the value of each — should allow you to retain your original price.
Give the “best price” at the best time
- Consumers will frequently ask you for the car’s “best price” before stopping by your store to look at the vehicle and take a test drive. While it’s OK to discuss price over the phone, avoid the temptation — unless the customer insists — to disclose this information in an email. The last thing you want to do at this point is give the customer a license to shop at another dealership. Instead, provide the MSRP and tell the shopper you’ll call soon to discuss details of the deal. Remember: While the customer’s objective is to lock in the best deal possible, your goal is to schedule the appointment. Once you get the person to the store, the odds shift in your favor. Even in the internet age, the appointment remains paramount to closing the sale. One final note: Before providing customers with a best price, lock them down on the car that they truly intend to buy. Otherwise, you might find yourself providing this information on several vehicles, a process that will waste your time and aggravate your sales manager.
Maintain control of the sale
- When negotiating with a customer in your store or over the phone, avoid the trap of what you think — or what the shopper wants you to think — other dealers are doing. Whether it’s a lower selling price, lower interest rate or upgraded service package, unless the customer has the offer in writing, it’s probably not happening. Don’t let the customer sell you.
Take a drive in the customer’s wheels
- Another ingredient that will factor into the negotiation process is the car buyer’s trade. Rather than directly asking if the customer has a trade-in, you might say: “Will you be replacing your current vehicle?” Not only are you likely to get a more honest answer, but you also frame a conversation around what the buyer considers important. Follow-up questions such as “What do you like about this vehicle?” allow you to uncover the customer’s “hot buttons” and sell the value of the car at a price that is fair and maintains your gross.
While the internet brings greater transparency to pricing and the car-buying process than ever before, it’s important to remember that you’re in control of the negotiation process. You’ve researched the marketplace and counseled the customer in identifying an appropriate car. Armed with this confidence and knowledge, you’ve positioned yourself to sell the value and features of the vehicle and the credibility of your dealership. Employ these tried-and-true negotiation strategies in closing the deal, and the odds are in your favor that you’ll maintain the profitability you deserve while giving the customer a fair deal.