This story was written for WRAL TechWire Advisor partner Johnson Automotive.
How much do you want to pay for a new car? As little as possible, right?
Because of this, most people go into the dealership prepared to haggle. They’ve done the research online and know what specific makes and models go for in their market, memorized the Kelley Blue Book value of their current vehicle, and are ready to deal.
The best dealers, however, are as ready as you are and have been looking at the same websites. By the time you walk in the door, they’re ready to show you why a car costs what it does using the same tools you’ve been using online and aren’t afraid to share it.
“We would rather them be prepared than unprepared,” said Kevin Hand, general manager of Johnson Automotive. “We don’t put any defense up to the fact that they’ve done their homework. At Johnson Automotive, we’re very transparent.”
That’s not the impression that all car dealerships give off, though, and many folks remember the days when a slick salesman would push specific makes or models. Today, that type of sales mindset just doesn’t make sense for dealerships.
The margin for car sales has shrunk, so there isn’t as much markup in price as there used to be, and haggling over price isn’t as common anymore. That doesn’t mean there’s no negotiation involved at all, it’s just shifted to other areas of car buying.
“There are definitely some variables there,” said Erick Kirks, marketing director with Johnson Automotive. “Although many people have a perception that dealers are making thousands of dollars on each sale, that’s not the case. With detailed pricing information available online and increased competition between dealerships, consumers can be confident they’re getting the best price possible. Dealers are trying to find other ways to be profitable; for most dealers it’s more related to service than to sales.”
The old-school style of haggling might emerge when trading in a vehicle and determining how much it’s worth, or for additional services beyond just the car. For instance, Johnson Automotive offers service packages to accompany the vehicle purchase. These packages are for things that are recommended for all cars, like major mileage tune-ups.
If you’re taking care of your car, such packages offer savings over paying for scheduled service or incidental repairs as they arise. Extended warranties and maintenance packages can also be bundled for additional savings.
More ways to negotiate present themselves when buying used cars.
Is the car certified? If not, why not? Certified used vehicles go through a rigorous inspection to ensure they meet manufacturer standards. As a result, they are often more expensive than a comparable non-certified vehicle, but may offer a greater value.
If you question why a car isn’t certified, the dealer should be able to provide an answer, and if that answer isn’t satisfactory, you’re entitled to learn more from a third party.
“You always have the right to take one of our vehicles to an independent mechanic,” Kirks said. “Any time a dealer doesn’t let you do that, that’s not the dealer to buy from. Even on our website, you can view the Carfax history since the car was purchased new, it goes back to the transparency.”
That transparency is key for dealers and customers alike. There just isn’t value in trying to mislead a customer. Instead, good dealerships are trying to retain customers so they’ll come in and use the dealer’s mechanics for tune-ups, or will buy another car in the future, or recommend them to a friend.
There’s so much more value in creating a positive experience that it’s become one of the key ways to differentiate dealerships.
Review sites help customers find those that deliver on positive experiences, like explaining the ins and outs of financing and encouraging buyers to look at all the options available, from the dealership’s own financing to the local credit union. The relationship continues to exist after the car has driven off the lot, and the best dealers are looking to reinforce that relationship.
“Pricing variation between dealerships is increasingly limited by the accessibility of pricing information available to consumers and competition between dealers,” Hand explained. “Instead of focusing on price, we encourage our sales staff to be up to date on the product to make the overall experience better.”
This story was written for WRAL TechWire Advisor partner Johnson Automotive.
