Automotive News - September 21, 2020 - Best Practices Supplement - S41

SEPTEMBER 21, 2020 | 41
KO O N S O F S I LV E R S P R I N G , S I LV E R S P R I N G , M D.

Group wants to pay your rent
Retailer offers bonus
to help new-vehicle
buyers during crisis
Published in Automotive News April 27, 2020

Laurence Iliff
liliff@crain.com

ere's something you don't often hear
as part of the dealership sales pitch:
"Koons Ford of Silver Spring, let us
pay your rent or mortgage!"
But these are not normal times.
Koons of Silver Spring Inc., a Maryland dealership group in the Washington, D.C., suburbs, has been covering up to two months of
rent or mortgage payments for customers
who buy a new car or truck - up to $3,000.
The Ford, Lincoln and Mazda stores also offer
0 percent financing, deferred payments and
home delivery with an online sales process.
Plus, customers can still haggle.
Owner Alex Perdikis has stressed on social
media that the housing
bonus is not a gimmick to
raise prices, but rather a
"relief act" made possible
by cutting back sharply on
the group's advertising.
The April promotion has
boosted new-vehicle sales
back to 2019 levels and
may be providing some
Perdikis: Giving
customers with a bridge
peace of mind
back to better times.
Perdikis got the idea while scanning the
news during his morning treadmill workouts
in March, when he realized a lot people were
worried about making their April rent, lease
and mortgage payments. With the group's
normal TV advertising generating little sales
activity because of the economic downturn,
he decided to shift the money to consumers.
"We just saw a dramatic, huge decrease in
traffic in the second half of March," Perdikis
told Automotive News. "From digital, we saw a
lot of people on our website - but not a lot of
people submitting leads."
With a yearly advertising budget of more
than $2 million, Perdikis' team had plenty to
work with. "I just said: We're canceling all advertising. We're out. And let's see if we can
give it back to our clients," he said. "Let's just
get back to basics and do this as a good neighbor. Motivate them to buy a car. And in turn,

A Koons of Silver Spring product specialist discusses Ford F-150 availability with a customer.

The Koons of Silver Spring dealership
group in Maryland has shifted its ad
dollars to a program that helps
customers cover their monthly rent or
mortgage payment.

we're going to give them a little confidence
and peace of mind to get through the next
couple months."
The group is relying almost exclusively on
social media at the moment.

Factory incentives, too
An important part of the pitch, promoted
using Facebook and YouTube, came from Perdikis. He promised potential buyers that
Koons is not going to eliminate any factory incentives or dealership promotions, or alter its
regular pricing, to make up the difference.
"This is in addition to our normally advertised Internet prices, in addition to all the factory incentives, and you're not paying anything more because you're getting a relief program," he said. The housing bonus comes after the deal is "neat and complete" in a separate process that requires documentation.
Buyers can get up to $1,500 a month for two
months, depending on their payment. More
than 80 percent of buyers during the promotion period signed up. "Some people think it's
a great thing we are doing, but they don't want
the money," Perdikis said.
Koons sold 60 new cars in the first half of

April, similar to the same period last year, he
said. Ford sales were about even and Mazda
was slightly higher. Internet leads rose by
about 10 percent for new vehicles. Sales in the
third week of the promotion were above last
year's level. The group has spent about
$200,000 on the program so far.
On the used-car side, leads are up but sales
are down - primarily because of competitive
financing on new models. A buyer comparing
a new 2019 F-150 with 0 percent financing for
84 months with a used 2015 model is finding it
harder to see the attraction to the used vehicle
right now, Perdikis said.
Koons sells about 3,500 vehicles annually
between new and used.

One day at a time
The business disruption of the coronavirus
pandemic is unprecedented for auto retailers,
but the Koons dealerships have experience
with government shutdowns as presidents and
Congress battled over the national budget. In
those times, Koons offered free oil changes to
furloughed government employees.
The general hope is the coronavirus shutdown will be short-lived. So Perdikis is weighing what to do next to promote sales. Under
consideration: offering store- or restaurantspecific gift cards to support local businesses,
or providing assistance to help customers pay
their bills. "We're taking everything day to day
with the news and the different announcements by the governors and the president," he
said. "We're all in uncharted territory." m

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