DONNA HARRIS

Tweak in the sales process pays off for AutoNation

Donna Harris covers automotive retailing for Automotive News
We've recently written about dealers taking the no-haggle approach to new-vehicle sales. It's part of a general movement toward more market-based pricing.

AutoNation Inc., the nation's largest auto retailer, hasn't dropped haggling completely, but it's tweaked the process to reduce price negotiations. For example, when AutoNation dealerships appraise a trade-in, they don't just tell the customer what they think the vehicle's wholesale value is. They also provide a realistic estimate of its retail value.

Coaching the customer like this can help AutoNation preserve its profit on the new-car sale and on the trade-in later when it's retailed.

“It's really reduced the bandwidth of negotiation,” President Mike Maroone recently told analysts. “It's not a one-price strategy, but it's a market-price strategy. And it's certainly closer to a nonnegotiable strategy than what we've been in the past.”

AutoNation believes its transparency pays off.

25

Shares

ATTENTION COMMENTERS: Over the last few months, Automotive News has monitored a significant increase in the number of personal attacks and abusive comments on our site. We encourage our readers to voice their opinions and argue their points. We expect disagreement. We do not expect our readers to turn on each other. We will be aggressively deleting all comments that personally attack another poster, or an article author, even if the comment is otherwise a well-argued observation. If we see repeated behavior, we will ban the commenter. Please help us maintain a civil level of discourse.

Newsletters