Everyone has their price but is it the right one?

I don’t think anyone will argue that the internet is now firmly established as the number one way in which to find a used car. As we have widely reported dealers are constantly striving to keep pace with technology and the competition by having clear, multiple images of the interior as well as the exterior of all their stock to enable customers to virtually decide on the car before even setting foot in the showroom.

However in conversation with a general manager from a large dealer group recently, he told me that although he understands that a large majority of all used car enquiries are generated via the internet there are still, for the time being at least, the very traditional car buyers who are loyal to a specific brand or dealer and who would not even consider going on line to buy a car or perhaps don’t even possess a computer let alone an internet connection.

Even more interesting is the fact that because used car prices in the last eighteen months have not followed traditional trends and last year actually rose steadily, searching on line can become quite confusing.

There are some cars which are advertised up and down the country, particularly higher end models or 4wd cars, which can vary wildly in price for similar age, mileage and specification models. This can and does create doubt in the mind of a buyer who will not understand the fact that virtually the same car can be advertised for as much as £3,000 or more difference, depending on the dealer or the location.

Of course there has long been competition amongst car dealers to ensure their cars come out first when searched for on stock listing websites and this is mainly achieved through being the cheapest. Although you will hear tales of dealers playing with numbers i.e. £7,995 becoming £7,992 or £7,892 just to get in the top listings, this practice does cause its own problems.

A car dealers quest for being the cheapest and attracting customers on that basis, means that unless they employ very skilled salespeople who do not further discount the cars once a customer becomes live, the price just to be in the top of the rankings for their advertised stock can certainly negatively affect profitability.

My colleague actually said that walk-in or “non internet business” is far more profitable for the dealership. He based his belief on the fact that the buyer and seller can concentrate more on ensuring the correct car is being bought and the value of the all round package becomes more important than concentrating solely on getting the cheapest price.

As we know getting the most discount does not always lead to the best long term solution for all parties because if a dealer accepts business which is not profitable his motivation for continuing to support that customer will hardly be as strong than if he has made a healthy profit and wants a long term customer relationship. It is not necessarily right but it certainly does happen.

I guess what the sales manager means is that although clearly the internet is an absolutely vital marketing tool there is still room for pricing cars more individually and understanding that customers can and still do arrive at the dealership from a variety of different sources.

Accepting this may just lead to a more profitable business and a more open minded approach to selling cars.

Subscribe to Motor Trade Insider by Email