I recently had the pleasure to work with a very innovative dealer who implemented the concept of “dealer currency” in his dealership with great success. Dealer currency allows you to eliminate cash discounts on sales (in both Variable & Fixed Ops) by instead issuing a form of “dealer dollars,” redeemable anywhere in the dealership for the future purchase of parts, service, accessories, or towards a future vehicle purchase. This creates a true “win-win.” It satisfies the customer — as they feel they have received the value of the discount. And the dealer — because it ties the customer to the dealership for future purchases, without having to give away any profit up front in the deal.
For example, instead of discounting a vehicle sale as follows:
| Selling Price | $20,000 | $40,000 | $60,000 |
| Purchase Discount | $750 | $1,500 | $3,000 |
| Adjusted Selling Price | $19,250 | $38,500 | $57,000 |
Dealer currency replaces those cash discounts with a dealer’s own currency instead:
| Selling Price | $20,000 | $40,000 | $60,000 |
| Dealer Currency Issued | $750 | $1,500 | $3,000 |
| Selling Price Remains at | $20,000 | $40,000 | $60,000 |
| Dealer Currency Cost of Sale | $750 | $1,500 | $3,000 |
| Commissionable Gross Based On | $19,250 | $38,500 | $57,000 |
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