Why dealers are split on the best pricing model—but aligned on one harsh reality

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Welcome to The Breakdown, an analysis of auto retail’s top trends, moves, and insights—in under 5 minutes.

Margins are thinning, car shoppers are behaving differently, and for the first time ever, average new vehicle transactions crossed $50,000.

Which means that vehicle pricing will likely be the single most important lens for estimating dealer profitability in 2026 and beyond.

So, I invited a panel of dealers on the Car Dealership Guy Daily Dealer Live Show, to finally settle the dealership pricing debate: one-price, negotiation-based, or something in-between?

But instead of crowing a winner, these dealers did something way more useful. They exposed the wins and trade-offs of each approach.

And here are the sacrifices they're willing to live with...

Mark Miller Subaru started the one-price model over a decade ago. No negotiations, no rate markups, no dealer reserves, and no manager exceptions (F&I too). At 60 days old, used inventory gets liquidated with zero flexibility.

The results: Close rates jumped from 25-28%, to 42%, transaction times dropped to 30 minutes, and employee turnover is virtually non-existent, according to CEO Jeff Miller.

However, Jeff's Subaru store averages $1,600 in F&I PVR, which is under the industry average. See, usually F&I managers have significant flexibility to adjust financing terms, package products, and negotiate add-ons to maximize profits. They can "work the deal" by tailoring offers to the customer's needs and specific demands. But Jeff's store doesn't do that. He's locked into his pricing structure.

And he doesn't budge from it.

Instead, Jeff is riding a never-ending wave of repeat customers that allow his store to maintain front-end gross margins that are competitive with his 20 Group.

Sir Walter Chevrolet operates like most dealerships in America. Sales are negotiable and finance managers sit in the sales tower so they can get involved early, keeping F&I penetration on the higher side around 50%.

Which matters in Raleigh, North Carolina, where there are 21 other Chevy dealers, each with 40 black Silverados. The product is identical. Making human connection the primary differentiator.

The catch: Dealership personnel and car buyers often spend hours grinding on price and payments which can weigh down the overall experience.

So Dealer Principal Matt Birckhead prioritizes twice-weekly training sessions, daily meetings, trade-walks, and immediate video responses to customers.

"When you do those things daily, and you build the culture the appropriate way, you can have all the attributes of a one-price store, yet still give room to negotiate and not feel like you have to play the game just because you're holding the line," he explained.

Roper Kia honors website pricing with zero extra fees. But managers have some discretion in other areas (i.e., General Manager Tustin Ulrich won't let an $85 floor mat derail a deal).

See, Tustin serves Southwest Missouri farmers who expect more "old-school" negotiation, as well as VIP buyers who want speed, and a top-tier customer experience. And it makes sense. Serving everyone captures more market share than picking a single lane.

Tustin also uses dedicated F&I managers instead of having salespeople handle cradle-to-grave.

And it's paying off. Sales volume is up 28% and VSC penetration is averaging 62%.

But here’s the catch: The store's high‑touch, hybrid process defies easy definition, and advertising algorithms don’t often reward nuance.

AI doesn't care which pricing model dealers chose. Those platforms surface whatever shows up in Google reviews, on websites, and social media profiles.

And for the first time, stores can execute perfectly, run disciplined pricing, and build killer guest experiences, but still get bypassed by shoppers who never see their offer.

So, the real strategic question isn’t which pricing model performs the “best” in theory—it’s which one holds up when an AI, acting as the new gatekeeper, decides what customers find. 

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Shout out to CDK Global, fullthrottle.ai, and Nomad Content Studio for making this episode possible!

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Shout out to OPENLANE, Amazon Autos, and Lotlinx for making this episode possible!

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