Selling Cars in a Recession: A Former GM's Proven System
Would you believe that selling cars in a recession was actually a gift for many of the stores I ran? I know that might not make sense, but when stocks plummeted or plagues ran wild, sales soared.
The dealerships that panicked closed. Those who found ways to innovate and refresh how they connected with customers saw award-winning years as if money was printed and fell from the clouds. I’m not exaggerating. This was very real, and I am sharing my thoughts sincerely with you here and now.
If you’re like most dealership principals in 2025, you’re looking at 25% hikes on the cost of import vehicles. Yikes.
But do you panic? Or do you find steadiness and resolve to do what it takes to sell cars no matter what?
Here's the deal - Trade wars or tariffs be damned. People will always need cars. They will always have to buy them. They will always find the money or buy the money (loans) to do it. What matters most is
your end of the deal, which comes down to some favorite advice that I got from a GM I trained under in Darien, CT. He said, "No one wants you to sell them anything. They want you to make it easy for them to buy what they want and need."
This principle drove dealership success in 2008, again in 2020, and will now for those dealerships willing to do what it takes.
Here's my best advice for selling cars in a recession that is still profitable and enjoyable for both sides of the desk.
Focus Is Your Friend When Selling Cars in a Recession
When economic uncertainty hits, most dealerships make the fatal mistake of chasing any deal with a pulse. They broaden their focus, slash their margins to rock bottom, and create a desperate atmosphere that customers can smell from a mile away.
The truth? Selling cars in a recession requires the exact opposite approach.
In every downturn I've managed, the dealers who thrived doubled down on their specific strengths rather than diluting them. If you're known for luxury SUVs, lean into that. If your sweet spot is affordable family sedans, own that space completely.
How to sell in a bad economy isn't about being all things to all people – it's about being everything to theright people. And I’ll tell you something else… the right people are always ready to buy…
When budgets tighten, customers become more discerning, not less. They want confidence that they're making a smart decision, and that confidence comes from your expertise in a specific segment.
No Excuses, No Fear
The second you start using the recession as an excuse for bad business practices, you've already lost. I've witnessed too many sales managers adopt an air of desperation when the economy tanks, taking unprofitable deals, abandoning qualification standards, and creating a culture of neediness. “The volume play” is an outdated way of thinking.
Remember this: people buying during economic downturns are especially sensitive to fear. They're already anxious about their purchase, and if they sense your desperation, they'll either walk away or use it against you in negotiations.
Selling cars in a recession successfully means maintaining your business principles. Bad deals don't suddenly become good deals because times are tough. In fact, the financial impact of bad deals becomes even more pronounced when overall volume decreases.
Cast Your Net Wider Geographically
While I've advised against broadening your product focus, one area where expansion makes sense during economic downturns is your geographic reach. Not all markets are affected equally by recessions, and digital tools make it easier than ever to attract customers from further away.
One particularly successful strategy I implemented when selling cars in a recession was targeting customers from 50-100 miles outside our normal trading area. We highlighted our specific inventory strengths and offered additional value for those willing to make the drive
If you are not familiar with what it takes to do that kind of thing, send us an email, and we’d be happy to share our local SEO and social media advertising tips.
.This approach helped us maintain sales volume while our competitors fought over a shrinking local customer base. How to sell cars in a bad economy often comes down to finding customers whose local market is hit harder than yours
Data Becomes Your Secret Weapon
There's no better tool for efficiency than clean, actionable data. When I managed dealerships through economic downturns, we became obsessive about measuring and optimizing every aspect of our operation.
We tracked:
- Cost per lead by marketing source
- Conversion rates at each sales process stage
- Customer acquisition costs by model
- True profitability of each unit (including F&I)
- Customer follow-up compliance and effectiveness
This data-driven approach allowed us to quickly identify what was actually working in the changing market conditions. Selling cars in a recession requires this kind of precision - you can't afford to waste resources on ineffective strategies.
Climb Down the Lead Generation Ladder
During good times, you can focus primarily on building your brand and generating organic leads through reputation. When selling cars in a recession, you must complement these efforts with more direct lead generation activities.
Think about it. You need to buy a car. You’re sitting at home, freaked out about health insurance premiums, paying your gardener, and 25% on top of a monthly payment. But wait! What’s that?
The phone is ringing and it’s the nice salesperson from the dealership you purchased/leased from previously.
Start the trusted and easy conversation now.
My most successful recession strategy involved a systematic approach to past customers and orphaned service clients:
- Personal phone calls to customers 2-3 years into their loans/leases
- Targeted offers based on equity position and current incentives
- Specific focus on service customers who purchased elsewhere
While these activities require more effort than waiting for inbound leads, they produce immediate opportunities. How to sell in a bad economy often means temporarily shifting your lead generation approach down the ladder from passive to active methods.
Put Relationships Before Transactions
The biggest mistake I see when dealers are selling cars in a recession is treating every customer interaction as do-or-die. This creates pressure that customers can feel, and it sabotages long-term success.
When I trained my sales teams for recession selling, we emphasized that every interaction should be nurturing, not hunting. Your goal isn't to "kill a deal" but to build a relationship that will eventually lead to a sale - whether that's today, next month, or next year.
This farming versus hunting mindset is critical when learning how to sell cars in a bad economy. Recessions are temporary, but the relationships you build (or burn) during them have long-lasting impacts. The sales professionals who maintained this perspective consistently outperformed their colleagues during economic downturns.
Revisit Your Product Mix
Even if your overall focus remains consistent, selling cars in a recession might require adjustments to your inventory mix. Customer needs change during economic downturns, and the successful dealer recognizes and adapts to these shifts.
During previous recessions, I observed clear patterns:
- Increased demand for fuel-efficient models
- Greater interest in certified pre-owned vehicles
- More emphasis on low maintenance costs
- Heightened sensitivity to monthly payments vs. purchase price
We adjusted our inventory accordingly, ensuring we had the right products for the changing market. How to sell in a bad economy often comes down to having inventory that addresses customers' new priorities.
Make the Buying Process Frictionless
When consumer confidence is low, any friction in the buying process becomes magnified. During my career managing recession-impacted dealerships, we obsessed over eliminating buying barriers.
This meant:
- Transparent pricing strategies
- Pre-arranged financing options
- Streamlined paperwork processes
- Remote delivery options
- Clear communication at every step
The dealers who excel at selling cars in a recession understand that removing uncertainty from the process is even more important during economic downturns than during boom times.
Create a Celebratory Environment
Here's my most counter-intuitive tip for selling cars in a recession: make your dealership feel like the one place in town where the economy doesn't matter. While the media broadcasts doom and gloom, your dealership should be an island of positivity and confidence.
Professional balloon displays throughout your dealership signal celebration, achievement, and optimism - powerful emotional triggers during uncertain times. When everything else feels serious and stressful, creating an environment that feels special and celebratory gives customers permission to make a purchase.
At one store I managed during the 2008 recession, we implemented a comprehensive display strategy with:
- Welcoming balloon arrangements at entrances
- Featured vehicle highlights
- Delivery celebration areas
- Service department welcome displays
The psychology behind this approach is simple but powerful: customers want to feel good about major purchases, especially during tough times. How to sell cars in a bad economy often comes down to managing the emotional environment as much as the financial one.
Offsets & Clever Desking
Let’s be real for a second. If you’re a dealership principal, you know that you can find 25% in the deal to help the customer.
One of the best strategies I ever used was an offset with the service department. If a customer was giving it everything they had to drive home in a new luxury SUV from one of my stores, I made it my business to offer them service as a closing tactic. $750 retail for an oil change.
C’mon y’all. We know what the shop charges us for that. So cover your customer's oil changes for the duration of the new car warranty.
Still need more? Throw in wheel & tire. Be a star. Sell a car.
Need even more room? Gasp, horror! Don’t go crazy on the lease rates or APRs. Drop your sell rates on the money to maybe half a point. The customer will watch their payment drop right before their eyes, and you’ll still get a little over the sell rate.
The Bottom Line About Selling Cars in A Recession
Selling cars in a recession isn't about radical reinvention - it's about disciplined execution of fundamentals with a few strategic adjustments. Focus your inventory, expand your geographic reach, obsess over data, climb down the lead generation ladder, nurture relationships, adapt your product mix, eliminate friction, and create a celebratory environment.
Those who master these principles won't just survive the current economic challenges - they'll emerge stronger and better positioned when the inevitable recovery begins.
Remember, your customers need transportation regardless of economic conditions. Your job isn't to "sell them a car" but to make it easy and comfortable for them to buy the transportation solution they need. That mindset is the ultimate key to selling cars in a recession - and it will serve you well in any market condition.
