New Car Inventory Pricing Strategy ?

[subi101]

In a conversation with a colleague, I found that they use AT for their new car pricing to "stay competitive"... ... I mean, we keep hearing they are getting better, but let's be honest... they don't even include trim levels on their backend "price comparison" tool. Love it for other reasons, but pricing strategy? I'm not so sure about that one!

I personally think the old looksie at competitors is the best way... but is anyone using any great tools that would help people price competitively? Just figured we could start a conversation about it!

 

[emilymoore]

I agree. Without mystery shopping, its tough to know what our competitors are selling their new cars for. Most manufacturers ban dealers from advertising prices lower than the MAP on their websites, so the numbers advertised do not reflect their true pricing strategy anyway.

 

[ddavis]

I agree. Without mystery shopping, its tough to know what our competitors are selling their new cars for. Most manufacturers ban dealers from advertising prices lower than the MAP on their websites, so the numbers advertised do not reflect their true pricing strategy anyway.

It is difficult, even by mystery shopping, to determine what price dealers will sell a new vehicle in this market. Most of the dealers send out prices that don't include dealer installed options which could raise the quoted price over $2000. Many dealers advertise their used vehicles at $1000 below what they own them for. The reviews reflect this.

The sad part is that dealers that will actually sell a car at their advertised price don't seem to do very well. One Nissan dealer makes a point of saying that there are no dealer installed options. "The Price You See is the Price You Pay" and they even give away the tint. They are last in the market.

 

[Rdpatrick]

We have had great luck by doing $500 over invoice minus rebates on most new units. Obviously, some will sell for MSRP or over MSRP but 95% of our vehicles are priced at $500 over. It's a bit of extra work for us to include the rebates in our price (usually takes about one full day per month to make sure they're accurate) but it's the extra work that most of our competitors aren't willing to do. We only include the rebates that everyone can qualify for, not the crazy specific stuff.

 

[Rick Buffkin]

I got tired of looking for a pricing tool and decided to built my own new car pricing strategy tool. The market in my area is very competitive with pricing their New vehicles at discounts online. Quite frankly, I got tired of having to go and look through websites and inventory online numerous times a month to make sure my pricing was in line. Now with the program I built, it does this for me on a daily basis. It visits each website address that I tell it to and grabs all the vehicle data off of the website ( Year, make, model, trim, vin, stock #'s, MRSP's, Discount's and Sale prices and brings it all back and writes everything out into an excel book with sheets for each model. I do the same for my websites and I compare excel books( the view horizontal feature with synced scrolling works really well) . It time stamps each vehicle so I can see how long they will let a vehicle stay in stock before they add / increase the discount and I can see the amount they increased the discounts all the way to the point of when the vehicle dropped off the website( basically sold or got dealer traded). I've had it running for about 50-55 days now and I have a really good amount of data and I can already see things that I couldn't before. I think your new car strategy approach really depends on your market. You may have to mystery shop more than visiting the other dealers websites. In my situation, that wasn't the case. We still do mystery shop, just not as much.

 

[Jeff Kershner]

Thats awesome Rick!

Sounds like you're still using the trusty little program I used back when to scrape websites and such. I'm pulling a blank on the name at the moment.

I would always recommend mystery shopping the competition too - plus you get even more information (like how bad or good they are on the phone)

 

[Rick Buffkin]

Update Patrol. I used it for a while for tracking but the one I have now is completely custom. Update Patrol is a great tool and I still do use it to monitor a few sites like Google's review ratings for my stores. It's really powerful if you are familiar with RegEx and implement that into your alerts instead of looking at the entire page, look for detailed specific content like pricing or vins. Only downside to it is looking back at the data (only holds previously read page). What I wanted to do was kinda like vAuto does for used cars(45 day market snap shot) but at a very scaled down version. I wanted to have the data in excel and a time frame for my competitors new cars that I could look at and measure.

My next step is incorporating some charts.

 

[Jeff Kershner]

YES UpdatePatrol!! I know we've talked about this software years ago over on the blog. I used it all the time for reputation management.

Sounds like you have one heck of a home brewed system and process set up. I like it.

I'm curious to how you're applying the data and what advantage you believe it's giving you?

 

[subi101]

Yeah... I'm thinking shopping is really the only way. Rick, how would I go about setting something like that up? It sounds really interesting!

I'm in a really competitive market and need any help I can get!

 

[Rick Buffkin]

Jeff

This data is now included in all of our pricing strategy meetings. The managers can see the competitions pricing structure on the new inventory instantly. There's no more guessing and trying to calculate discounts or jumping from website to website. We were wondering for a long time if certain dealers strategies was based on a "Days in stock" qualifier. From what the data tells us the answer is "No". Before we could not really see a method to the their pricing. Now, I can tell you that they pick 2-4 vehicles in each model line and increase the discounts an extra 2 - 2.5%(loss leaders so to speak) and the rest is all discounted at a lower amount. Other dealers have pretty much a standard amount that they are discounting( a set it and forget it approach). There are a couple of dealers though that are changing their pricing based on a "Days in Stock" qualifier.

As dealers continue to realize that online pricing does have an affect on customers contacting their dealership or not, I want to make sure that I have a competitive edge on my competition. If I know that dealer A is going to increase his discounts 2% at day 45 on his new Camrys, I can set my discounts to take affect at day 35 or 40 and have a better chance for the customer to contact me first during that 5 - 10 day interval. While he is unknowingly waiting for his discounts to take affect, I've been answering leads, phones, setting appointments and selling cars. When my vehicle hits the 45 day mark, I'll increase my discount a fraction over his and my vehicle will still be priced at an advantage. If I didn't know when his pricing discounts take affect, I probably would discount my vehicles from the day it came in stock or a few days afterwords and try to compete my fresh unit pricing with a unit that's 45 days or older on another dealers lot. Now we have ability to pick up some more gross and stay competitively priced in the market. Basicly the same strategy that Vauto offers with Vmax button!

Subi

My program is completely custom. I worked really hard with a bunch of trial and errors to get it to the point its at. I still have things that I want to implement with it as well. A good starting point would be using Update patrol or a similar tool like Alert Box for firefox. Alert Box is a free tool and you can set it up to email you the changes it finds. If you close FF, the tools stops working until you reopen FF. Also, get familiar with RegEX. They're a pain in the butt to work with but once you learn how to use them, they're really powerful

Regular Expression Tutorial - Learn How to Use Regular Expressions