5 Car Dealership Pricing Strategies to Stay Competitive in the Market

Five Approaches for Evaluating The Best Pricing Strategies Your Car Dealership Can Leverage

Typically, thanks to car dealership regulation, vehicle manufacturers cannot just sell units directly to consumers. These restrictions imply that your car dealership has the upper hand in setting prices, although they’ll change based on fluctuating supply and demand. Still, you can easily employ different dealership pricing tactics to get the most out of your niche.

What types of vehicles do you sell? What’s the level of competition like in your market? Your audience, profit goals, and many more factors come into play with common pricing strategies for dealerships, so take a look at the five ideas below:

#1 The One-Price Model

The “one-price strategy” involves just what it implies—setting a singular figure on any given vehicle that is set in stone. No customers can haggle this price. You advertise a confirmed sales price, and any potential buyer will either accept or deny it.

In today’s digitalized selling platforms, younger shoppers enjoy this one-price approach because they do not like the confrontation and stress of price negotiations. With a straightforward price, you may attract clients looking for a hassle-free and simpler car-buying experience. It also frees up your team’s time as it streamlines the sales process quite a bit.

What’s the downside of having just one price? Opportunity cost—your dealership could lose out if any buyers would have been willing to pay a slightly higher price tag.

#2 Psychological Pricing

If you’re looking for more traditional car sales pricing strategies, choosing your numbers wisely can take a little savvy. With the psychological pricing model, you would price cars just below critical levels to make them seem more appealing to buyers. 

For example, you could price a $30,000 car at $29,999 so that buyers don’t see the scary threshold of $30k as they walk into the lot. In this example, your dealership will likely be more visible in search engine results as shoppers filter out all cars that are $30,000 or more.

#3 Bundle Models

Vehicle sales pricing techniques don’t always have to be about the actual price. Potential buyers love it when dealerships bundle in extra items, such as: 

• Free floor mats
• Oil changes
• Window tints

The shopper may not have wanted any of these items, but the bundle could make the total price tag seem far more appealing. Bundles boost car dealership advertising strategies, as well. For example, campaigns could revolve around all new car purchases including free oil changes for five years.

#4 Competitive Pricing

Cut-throat competitive pricing strategies in car dealership businesses involve undercutting competition so that shoppers choose to buy vehicles from you instead. You simply list your vehicles for slightly less than other dealerships in your area. 

Unsurprisingly, this is one of the most common car dealership pricing strategies. Still, it takes some careful calculations to keep your prices in a profitable zone. 

#5 Loss-Leader Pricing

The final consideration is loss-leader pricing, a great strategy in a service center. You advertise something for free and then attempt to upsell additional products or services. 

For example, you may offer free oil changes. Then, during the oil change, you’ll try to sell each customer other necessary services. Sometimes, they agree.

Expand Your Car Dealership’s Financing Offers and Win

Once you begin testing different car dealership pricing strategies, you’ll quickly see what works for you. Partnering with professionals like Edge Financial Services LLC could also maximize your dealership’s customers’ chances of auto loan approval, so contact us online or call (866) 890-2415 today to learn more.