Pre-qualifying shoppers with questions about their budget is the best way to insure that you will get an untruthful answer in response. The only thing you really need to know at this point is whether they are looking for a new or used car, a sedan or a coupe, and what brand they prefer of the makes that you sell.
When the budget question is brought up the salesperson organizes their inventory walk in the direction of what he or she believes will fit the Customers payment level. This then leads to showing them the wrong vehicles that are less than what they want and what they really are able to afford. Avoiding budget questions altogether is the best way to keep this from happening.
Put yourself in the customer’s shoes for a moment and imagine how you might answer a salesperson asking you what your budget is. If you had a budget of $400 for a monthly payment would you tell them that it is only $300 per month? I don’t know about you, but I would not tell them how much I was really willing to pay if they asked that question because I know what they would do: They would start tailoring the cars they show me that would allow them to make the most money possible on the deal. If I started to balk on their offer they would show me lesser vehicles or start dropping the payment on the car I really wanted in order to keep me from walking.
The psychology behind this is simple: customers believe that the average car salesperson has one goal in mind and that is to sell them a car today whatever it takes. That usually means they will either apply pressure during their presentation to get them to buy something they want to sell, or drop their prices until they get to something the customer will accept for a payment of $300.
Whenever you have a budget in mind that is what you think the customer can pay you will start looking for cars in that price range and waste a lot of time showing them vehicles less than what they want or can really afford.
So why even go there? Your job is to find out what they are looking for in the way of a vehicle and to help them find it. They will decide whether they are willing to pay what it cost to get the vehicle they want to own. And if in the end you have to negotiate a little to make the deal, you are in a better position than if you had started with a lower payment budget in mind. The right way is to start your Inventory Walk is with the lowest priced vehicles in the category of what the customer wants. If they are looking for a sedan, start with the lowest priced ones you have, show them that model and then wait for their response. They will respond. Some will do it verbally and some physically, but you will know if the car they are looking at is in their price range.
In almost every case customers will first look at the window sticker. How they react will tell you more about the budget they have in mind. You will get better information from this than you would ever get on your own asking them what it is. When people find what they really like, don’t worry, they will find a way to get the money they need to make it happen.
Here’s the bottom line: Purchasing a car is an emotion based experience for most people. If you have a false budget in mind and then show them cars within that false budget you will lose. By focusing on finding the right car during the selection process, without asking or answering questions about budget or price, you let the car sell itself to the customer.
Also keep this in mind, when a car salesperson asks a customer how much they want to pay, or how much they can afford for a monthly payment, they are almost always setting themselves up for a negotiating process that leaves money on the table costing them profit they did not need to give up.
Again, If you ask for their budget you end up with a price in your mind you think they can afford and will guide them around the lot stopping at vehicles that fall into that price range and avoid showing them those that don’t.
When you don’t have a budget amount set in your mind you can show them everything you have to offer and they will gravitate toward the vehicles that catch their interest.
Remember, people buy what makes them feel good. If you have it in your mind that you know their spending limits you will either get there by showing them less vehicle then they want or by cutting your price so much that the profits are gone from the deal.
Why even go there? Once you start the inventory walk your job is to find out what they are looking for and to help them find it. They will decide whether they are willing to pay what it cost to get what they want in a vehicle.
As I already mentioned, the only things you need to know in the beginning of the sales presentation are whether they are looking for a new or used car, a coupe or sedan, a Ford or a Honda. When you know the answer to these questions you can guide your customer to the right area and start the vehicle selection process. By avoiding questions about budget, price or payment you will save yourself a lot of problems in your attempt to earn their business.
Your business is to find the car the customer wants and get them to agree to purchase it at a reasonable price. Leave the questions about budget or payment until absolutely necessary and let the finance managers do their magic to get the customer to the payment amount they desire. If they find they cannot make the payment amount on that vehicle they may be pliable and willing to consider a lesser priced one they can afford.
Today’s buyers have lots of options that can help them get the vehicle they want in a payment they can afford. There are longer finance terms and leases and, if necessary, some can find additional down payment money to help them lessen the monthly payment amount. There are also newer pre-owned vehicles that can give them everything they want without having to step up to a brand-new car.
Avoid asking questions about their budget and save yourself a lot of trouble and the loss of sales that could have been made had you avoided bringing up the question in the first place.