· DealerInt Team
How do you stop dealership discounting?
Stop dealership discounting by requiring structured reason capture at the point of every override. When sales managers must select a reason—competitive match, aging inventory, loyalty, or manager approval—before approving a discount, three things happen: visibility increases, accountability improves, and policy drift slows. DealerInt captures reasons in real time via a Chrome extension, giving GMs dashboards that show exactly where margin is being given away so they can tighten policy where it matters most.
Root cause analysis
Dealership discounting spirals when there is no structured capture of why discounts are given. The root cause is not malicious intent—it's information asymmetry. Sales managers approve discounts every day to close deals, match competitors, or retain loyal customers. The DMS records that an override occurred, but not the reason. Without the "why," GMs cannot distinguish legitimate competitive matches from discretionary giveaways. Policy exists on paper but drifts in practice because there is no audit trail. Managers who discount appropriately have no way to prove it; those who over-discount face no consequence. The system rewards volume over margin because margin leakage is invisible.
Dealership example
A 3-store franchise group in the Midwest runs $75M in annual revenue. The GM noticed gross per unit had dropped 4% year-over-year but couldn't pinpoint the cause. Spot-checks of deal jackets showed discounts ranging from $500 to $4,500 with no consistent documentation.
- Annual revenue: $75M
- Gross margin before: 14.2%
- Gross margin after 18 months: 12.1%
- Estimated margin lost: ~$1.6M annually
- Average discount per unit (before fix): $2,847
- Average discount per unit (90 days after DealerInt): $2,112
- Override rate decline: 34%
After implementing mandatory reason capture, the GM discovered 62% of overrides were coded 'competitive match' but fewer than 20% had documented proof. Policy was tightened: competitive matches required a screenshot or printout of the competitor offer. Within 90 days, override volume dropped 34% and gross per unit recovered $735. The group estimated $550K in annual margin recovery.
DealerInt solution mapping
DealerInt maps directly to the discount-stopping workflow. When a sales manager approves a discount in CDK, Tekion, DealerTrack, or any web-based DMS, the DealerInt Chrome extension detects the override event and prompts for a reason code before the deal can proceed. No API integration is required—DealerInt runs in the browser where the DMS is accessed. Reason codes are configurable: competitive match, aging inventory, loyalty, manager approval, manufacturer program, or other (with note). Dashboards aggregate override volume by reason, by manager, by location, and by time period. GMs see which categories drive the most margin loss and can tighten policy accordingly. Executive reports summarize override trends for board and ownership review.
Step-by-step fix
- 1
Define your override policy
Document which override reasons are allowed, what proof is required (e.g., competitor quote for competitive match), and any limits (e.g., loyalty discount cap of $500). Get buy-in from sales and F&I directors before implementation.
- 2
Install DealerInt and configure reason codes
Install the DealerInt Chrome extension on all machines where managers access the DMS. In the DealerInt dashboard, configure reason codes to match your policy. Typical setup takes under an hour.
- 3
Train managers on the new workflow
Managers must select a reason code when approving a discount. Explain that this protects them (creates an audit trail) and helps the store (visibility drives better policy). Role-play a few scenarios so the prompt feels natural.
- 4
Review the first week's data
Check the DealerInt dashboard after one week. Look for patterns: Which reasons dominate? Which managers have the highest override rates? Which locations? Use this as a baseline for policy refinement.
- 5
Tighten policy where needed
If competitive match is overused without proof, require documentation. If loyalty discounts exceed policy, enforce limits. Use DealerInt data to identify the highest-impact categories and address them first.
- 6
Schedule ongoing reviews
Review override dashboards weekly (department managers) and monthly (GM). Track override rate trends. Celebrate improvement. DealerInt users typically see override rates decline within 90 days.
Data
| Override reason | % of overrides | Avg. discount | With proof (%) |
|---|---|---|---|
| Competitive match | 42% | $2,340 | 18% |
| Aging inventory | 24% | $1,890 | N/A |
| Loyalty | 18% | $1,120 | N/A |
| Manager approval | 12% | $2,670 | N/A |
| Other | 4% | $1,540 | varies |
In summary
In summary: Stop dealership discounting by capturing the reason at the point of every override. DealerInt prompts for a reason code when a manager approves a discount, creating visibility and accountability. GMs see override volume by reason, manager, and location. Policy drift slows because every override is documented. Typical results: 30–40% override rate decline within 90 days, margin recovery of $500K+ on a $75M operation. Install the Chrome extension, configure reason codes, and start capturing—no DMS integration required.
References
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DealerInt Team. Dealership decision intelligence. Meet our experts.
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