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August Newsletter – Why Don’t We Price New Vehicles to Market?


This question is the biggest challenge that I see today facing a dealer’s digital marketing plan:

Why are we not pricing our NEW car inventory to market on our website like we price our USED cars to market?

Too many dealers are accepting just having MSRP shown for the price and not showing a discount or let alone an advertised price.

Before you start thinking of reasons why you cannot post a discounted price, let me give you the list that I hear from people most commonly:

  1. IT KILLS GROSS! No, the information age we live in where customers can research anything and companies like True Car killed your gross. Not to mention competing dealers who only want to gain market share. Your new car gross will continue to shrink. Pricing discounted cars on your website is not the cause but a way to get more traffic and leads.

2. COMPLIANCE DOESN’T LET ME! No, compliance will let you post a discounted price, but with luxury brands and manufacturers like Honda you just cannot go below invoice. I am not aware of any mainstream or volume brand that mandates you must post MSRP on your website.

3. PEOPLE WILL STOP SENDING LEADS! Several good arguments have been made by dealers concerned that showing a “special price” or advertised offer will hurt their lead count. Great point – but we see the opposite. Dealers who advertise discounted prices have an uptick in form submission traffic and higher up counts on the lot. Not everyone wants to email you these days and give you access to nonstop spam. They simply find the price and either call to check availability or just go to look. (Not a bad problem to have.)

4. IT’S TOO MUCH WORK! This gets brought up a lot but most websites have some sort of pricing tool you can employ. If it does require manual work, let your managers do it. The floor plan expense in most stores is high enough to warrant someone to make sure the units are all priced to sell.

5. SOMEBODY COULD BEAT MY PRICE! Yeah, they can, and will, if you are not paying attention. But remember, as people get into the depths of a vehicle search they can see options and trim levels, and as long as you have the right merchandise, all that an effective offer does is help get higher consideration for your dealership.

Pricing your new cars to market will create more leads. It will distinguish you from your competitors who do not price them and will generate more showroom ups. For all the money spent on lead providers, websites, pay-per-click campaigns and optimization, it is kind of silly not to be pricing your new cars aggressively to market.

Again, pricing to market means being the lowest and most effectively priced of your direct competitors. It doesn’t mean you have to be the lowest in the country.

If you are not pricing to market, then call a meeting with your new car sales managers and see if any of the five reasons above get mentioned.

If you are pricing your new cars to market, stay aggressive and don’t let up because too many dealers aren’t doing it and you’re gaining their business.

John Paul Strong

John Paul Strong combines his two decades of automotive marketing experience with a team of more than 150 professionals as owner and CEO of Strong Automotive.

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