Online Vehicle Pricing Myths Debunked by AutoTrader

PR Newswire

New data from AutoTrader.com debunks the per­va­sive myth that online vehi­cle pric­ing trans­paren­cy erodes val­ue and gross for deal­ers.

Do deal­ers who price their new vehi­cles below MSRP attract buy­ers?

New data from AutoTrader.com® debunks the per­va­sive myth that online vehi­cle pric­ing trans­paren­cy erodes val­ue and gross for deal­ers by show­ing that deal­ers who price their new vehi­cles below MSRP attract buyers—and more of them. An AutoTrader.com dig­i­tal audi­ence analy­sis of over 6,605 new vehi­cle sales across 1,000 deal­er­ships showed that when deal­ers list their new vehi­cles below MSRP, they receive more traf­fic to their inven­to­ry online, attract buy­ers from greater dis­tances and sell more vehi­cles than deal­ers who list their new vehi­cles at MSRP. Addi­tion­al­ly, the data shows that buy­ers tend to trans­act at a high­er price than the range they were search­ing with­in online, indi­cat­ing that there is sig­nif­i­cant oppor­tu­ni­ty for addi­tion­al incre­men­tal deal­er prof­it.

“The belief that adver­tis­ing com­pet­i­tive prices for new vehi­cles online is fuel­ing a race to the bot­tom sim­ply isn’t hold­ing up under ana­lyt­ic scruti­ny,” said Scott Her­nal­steen, senior direc­tor of enter­prise ana­lyt­ics at AutoTrader.com. “Instead, we’re see­ing that when deal­ers put an actu­al price—not MSRP—on their new vehi­cles, they are able to more effec­tive­ly com­pete to cap­ture and influ­ence con­sumers’ atten­tion. Con­sumers know that most peo­ple don’t pay MSRP, so when deal­ers list a price at which they are more like­ly to trans­act, con­sumers take notice.” Her­nal­steen also not­ed that laws in cer­tain states pro­hib­it adver­tis­ing prices below MSRP and cau­tioned deal­ers to con­sult with their legal advi­sors.

Accord­ing to the analy­sis, new cars priced below MSRP get 34 per­cent more page views than new cars priced at MSRP. Pric­ing-savvy deal­ers not only received more eye­balls on their inven­to­ry online—they actu­al­ly sold more vehi­cles, too. The analy­sis showed that deal­ers who priced their new vehi­cles below MSRP sold 20 per­cent more new cars than their coun­ter­parts who used MSRP instead. And, buy­ers trav­eled an aver­age of 10 more miles to deal­ers who list­ed their news cars below, rather than at, MSRP.

Tags:


0 Comments

    Leave a Reply

    Your email address will not be published. Required field are marked *.