How to Deal with a Lowball Offer

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Imagine this: a new customer walks into the dealership, shopping for a new vehicle. 

You’ve done the needs assessment, the product demonstration, and there haven’t been any issues so far. It’s lining up to be a slam dunk. Back at your desk, you begin drawing up the sales agreement with the customer when, out of left field, the customer hits you with an offer thousands below cost. It leaves you slack-jawed. Where did you go wrong? 

If it hits close to home, it’s because it has happened to every salesperson more often than they care to admit. The scenario happens in the service drive also, albeit on a different scale. And what’s probably the most frustrating part of it all is this: it’s probably not the customer’s fault – it’s yours! 

Reasons for Low Offers

There are three main reasons that customers will hit you with that ridiculously low, unreasonable offer. 

1 – They can’t afford it. When a customer doesn’t think they can afford the vehicle, they’ll try to bring the price down to one they can manage. But if a customer doesn’t think they can afford it, the salesperson – YOU – haven’t correctly performed a needs assessment and customer profile.

2 – It’s the wrong car. It still happens more than you’d think. A customer likes a car but doesn’t LOVE it. They’ll settle for it…for the right price. But it’s not their fault – you haven’t shown them the vehicle they truly need. 

3 – They don’t think it’s worth the money. More often than not, the customer hasn’t seen the full value in the car. With a proper product demonstration that hits on the points discovered in a needs assessment, the demo should be spot-on. Unfortunately, the salesperson has missed something along the way, and the customer doesn’t see the full value, so they won’t pay the full amount. 

Here's what Ted Ings recommends

When you’re presented with a lowball offer, Ted Ings has a suggestion: don’t deal with the price, but rather, the reason for the low offer. “Ask the customer to level with you. Ask them directly if it’s the right vehicle for their needs. If it isn’t perfect, start from square one with a vehicle search. If it’s an affordability concern, defer to a pre-approval with an F&I manager.

“In most cases, it’s a problem with value perception. They haven’t seen enough reasons to pay you full retail for the car. Your best bet? Apologize for not doing the product demo justice and ask if you can take them through the vehicle’s features again.”

The best way to avoid the lowball offer in the first place? Follow the sales process exactly. Conduct a thorough needs assessment and build excitement in the product demonstration.