Flat Pricing Strategy for Used Car Dealers

Flat Pricing Strategy for Used Car Dealers
What is Flat Pricing?
Flat pricing is a revolutionary vehicle pricing strategy introduced to the automotive industry in 2011 by Jasen Rice, CEO and Founder of Lotpop. Instead of pricing vehicles at traditional amounts like $19,995, flat pricing uses round numbers like $20,000.

Why Flat Pricing Works
When shoppers search for vehicles online, they typically search using round number price points. By pricing your vehicles at these exact amounts, you dramatically increase your inventory's visibility in search results. The Search Behavior Reality Research from major automotive marketplaces reveals that shoppers overwhelmingly search using specific price
points:
$10,000 (searched over 3 million times in a single month)
$15,000
$20,000
$25,000
$30,000
By pricing at $19,995 instead of $20,000, your vehicle misses shoppers searching at both the $19,000 and $20,000 price points, significantly reducing your exposure.

The Top 20 Price Point Strategy
Lotpop has identified the top 20 price points that generate the most online searches. These include obvious round numbers as well as strategic amounts like:
$22,000 - Aligns with shoppers searching for $400/month payments
$13,000 - A popular mid-range search point

The goal is simple: maximize how many of your vehicles hit these high-traffic price points to capture as many eyeballs as possible.

Key Metrics to Track
Monitor three critical percentages of your inventory:
1. Top 20 Hit Rate - Percentage of vehicles priced at the top 20 most-searched price points
2. Top 10 Hit Rate - Percentage hitting the most popular 10 price points
3. Non-Hitting Rate - Percentage priced at less popular amounts (e.g., $10,500, $25,500, $32,000)

Implementing Flat Pricing
Best Practices
1. Price to round thousands when possible - If market positioning allows, use $20,000 instead of $19,995 or $20,500
2. Balance with market competitiveness - Always consider your percentage to market and competitive positioning
3. Use spotlight ads strategically - For vehicles at less popular price points (like $31,000 or $32,000), invest in spotlight advertising until the price drops to a high-traffic bucket like $30,000

When to Deviate
Sometimes market conditions require pricing at non-flat amounts. In these cases:
Accept the reduced organic exposure, Compensate with paid advertising and spotlights,
Monitor the vehicle closely and adjust to flat pricing when market allows

Impact on Marketing Performance
Flat pricing directly affects: Search Result Pages (SRPs) - How often your vehicles appear in search results, Vehicle Detail Page (VDP) views - Overall traffic to your vehicle listings,
Overall marketing ROI - Better organic exposure means lower cost per lead.

A dealership tracking this metric saw their Top 20 hit rate drop from 47% to 26% over several weeks, which correlated with decreased overall marketing performance and visibility.

The Bottom Line
Flat pricing is about working smarter with your inventory exposure. Just as you stock popular makes and models because that's what shoppers search for, you should price at popular price points for the same reason.
Core Principle: The more vehicles hitting the top 10 and top 20 price points, the more free exposure your inventory receives, helping you sell cars faster.

For the complete list of top 20 price points and implementation support, contact Lotpop.