Why a Subaru dealer says ‘no thanks’ to non-local buyers willing to pay more

Why a Subaru dealer says 'no thanks' to non-local buyers willing to pay more

Dealers doing what they’re supposed to do – selling and serving customers in a general geographic area, their “primary marketing area,” which in Capitol’s case is about 20 miles around Salem – is so fundamental to the franchise business model that it normally doesn’t would be best practice. But with inventories at or near historic lows and consumers searching online across the country for new vehicles, taking care of the home front is becoming increasingly important for dealers who must build and maintain relationships with repeat customers, said Casebeer, group president.

“We keep talking about the big picture — not today, but maybe three or four years from now — there’s literally no point in selling a car to someone from Idaho,” Casebeer argues. “Yeah, we might be making $5,000 now, but that customer’s life is over — no parts, no service, no trade, no referrals, nothing.”

Casebeer says the temptation to “get greedy” and sell stickers to whoever comes next is always there, and he says many dealers have fallen into that trap.

“We can sell in many different ways and charge a lot more money than we are, but we have to take care of our backyard. People will remember how they are treated now, and they will remember that when they buy their next car.”

Most automakers, of course, try to monitor their dealer networks through metrics such as sales efficiency, and selling new vehicles to consumers outside of a dealership’s primary marketing area “hurts your sales efficiency the way they do.” [automakers] look at things,” Casebeer said. “It’s macro, dealer-style stuff, but we have to worry about it. You can be sure [automakers] check every credit app, every driver’s license, to make sure.”

Capitol Subaru sold 1,300 new cars in 2020 and more than 1,700 new cars in 2021, Casebeer said. Through May, it was among the top 20 Subaru stores in the country by sales.

Part of that growth comes from protecting its own territory, Casebeer says, especially at a brand like Subaru, which has traditionally run very lean stocks.