Nissan dealers may soon begin advertising substantially lower prices.
Industry publication Automotive News (AN) reports, “With a nearly triple-digit days’ supply, Nissan is letting its retailers advertise vehicle prices below invoice — the first time the automaker has done so widely since before the pandemic.”
Automakers don’t own the dealerships selling their cars. Dealerships are separate companies, and agreements and contracts govern interactions between factories and dealers. In those agreements, most automakers restrict dealers from advertising prices below the manufacturer’s invoice price without permission.
AN obtained a memo from Nissan to its dealer network temporarily lifting the restriction. The memo lets dealers “market nearly the entire 2024 model year lineup at up to 10 percent below invoice,” AN says. They can mark down the aging Armada full-size SUV by as much as 15%.
Nissan Dealers Overstocked
Why the change? Because Nissan has too many cars in stock.
An old industry rule of thumb tells dealers to aim for a stockpile of about 60 selling days’ worth of cars. Fewer than that means a dealer might not have your preferred combination of features and colors in stock.
However, dealers don’t generally own the cars on their lots. They usually make monthly payments on them through a complex loan arrangement called “flooring.” Keeping a large stockpile eats into dealer profits.
Kelley Blue Book parent company Cox Automotive reports that Nissan dealers today have nearly 100 days’ worth of cars in stock.
Getting the Advertised Deal Will Require Some Restraint
Advertising lower prices might help get shoppers in the door, but dealers often try to steer shoppers toward more expensive models once they’re in the showroom.
Related: How to Avoid Dealer Markups in 2024 – Buyer Beware
“Some dealers said they hope to up-sell shoppers drawn by low advertised prices on base models that lack popular options such as power seats,” AN says.
They might also offer the low prices only to specific customers. “Dealers could also condition the below-invoice pricing to Nissan financing or limit the offer to students or military veterans.”
