Internet Price vs Dealer Floor Price

by Andy H.
(Fort Mill, SC)

Question: Why is the internet price vs a car dealers floor price so much different?

It seems like the dealers have lower prices for vehicles on the internet than they do if someone walks into the dealer and asks what a specific vehicle is selling for.

My question is what does the dealer accomplish by doing this? And secondly, should there still be enough room to negotiate and get a good deal?

Thanks in advance for your help.
Andy


Answer: Hi Andy,

Most dealerships will treat Internet car sales and their Retail floor sales as two completely separate departments. Each department sells cars the best way they know how.

For Internet sales, they know that price will be key to getting someone to the dealership to buy a car.

The retail sales side will find customers out of the service department, referrals, with print ads and radio. They will try to sell the value of the vehicle more than just sell the lowest price.

The dealers love the volume created with Internet car sales and love the gross profit generated by the retail sales side, so they let each department do what they do best.

The retail sales side relies on catching people a little off guard and hopes that the customers emotions will guide their decisions (big mistake for customers).

I always suggest my visitors shop cars online as this will get them the biggest savings the fastest. I promote Yahoo! Autos, because they allow people to get up to four competing quotes from local dealers.

The competition is key here and the dealers know that the lowest price will win!

From there you can still negotiate to see if you can get an even better deal, but whether you will be able to will really depend on the price quotes you get upfront.

Usually there is not much room left, because there are usually some pretty sharp discounts right out the gate, but that doesn't mean you can't/shouldn't try.

Ultimately, online quotes save a bunch of time, because you could negotiate the same pricing in person, but it's more work to get to the same place. You'll also have to negotiate with a salesman in their "house" that does this for a living.

Shopping cars online is certainly your best bet!

Hope this helps,
Justin