Hi, I am interested in your _____, What's your best price?

If you are a car dealer or have ever just sold a car privately you likely have run across this phrase.  It's not often associated with the thought, "Ohh man, this person is going to buy my car".  But have you ever considered that what may be one of your most popular strategies in responding to this question is actually furthering the concept behind it?

The question (Best Price) is clearly contradictory to what we are told these days which is that the modern car shopper is more informed and educated than ever.  If they truly were, why do so many (Not all) contact you asking about price rather than informing you of what it is they are going to pay?  It seems to suggest that the car remains one item where people realize (Possibly only subliminally) that value must be determined by both parties equally, not by any calculator, algorithm, or book.  They still rely on you to gauge that value, and that can't be a bad thing!

This is important to consider when responding to someone who asks for your best price because it means they may be open to suggestion, and not just yours, but to a good strategy in general because let's face it, "What's your best price" is a weak strategy and they probably know it.  So, what do you tell them?  If you are like many dealers you respond by saying that you prefer to discuss special pricing in person because you care about providing a personal experience and that if they are worried about your flexibility in price, you will guarantee to beat any written offer.  WHOOAA, WHAT?  

Correct me if I'm wrong, but it looks as if you just informed this person how to force your price down without ever negotiating with you?  You also appear to have encouraged them to do this by wasting the time of another dealership, a dealership they have no intention of buying from, a practice that I thought we were trying to limit?  If this person is smart (Always debatable) they will ask themselves, "Well, what if I visited two other dealerships?  Then I could I could really drive the price down."  This is exactly what many dealers said they didn't like about a company called CarWoo a few years back, and the internet in general.  CarWoo was a platform where a customer could post the car they wanted (New only) and the dealerships within their desired radius had the opportunity to win their business.  It was perceived as a bidding war but with factors like distance, availability/stock, and responsiveness to the buyer it proved to have many more factors that played out than just price.  Despite this, many dealers claimed that it was only a race to the bottom of a price war.  No.  Written offer guarantees are a race to the bottom of a price war.  Putting yourself in a position where your competitors are writing your deals for you that you now have to beat, is a race to the bottom of a price war.  In fact, it's not much better than what Truecar does and seems to be the only "Guaranteed" way to finish at the bottom of any price war.  Let me stress, I don't think there is anything wrong with deciding to be cheaper than your competition to make a sale because I did it myself, but the key there is "deciding".  If dealers are ok with guaranteeing to be cheaper, what's wrong with competing to be cheaper?      

Sell your prices, don't guarantee them.  As I usually do, I suggest you turn your attention to an online strategy to play off the consumers' desire to save time and be efficient.  Create value there and in places other than price, and do it upfront.  Starting a down trend in "What's your best price" may be that simple and far more realistic than hoping it ever ends.  Consumers no longer want to drive around getting those written offers to push in dealers faces that guaranteed them the cheapest price, but if you continue to tell them they have to, I am going to bet that they will.  Yes, it may mean openly and directly competing with another dealership, but competition is where the car dealer is and will always be the most comfortable.  

The car searching, shopping, and buying experience is about to change.