Affordability Illusion | Neuromarketing in Dealerships, Episode 2

A vehicle for €17.900 or one for €399 a month - which sounds more attractive?

Although it is essentially the same offer, many people perceive the monthly price as significantly more “affordable”. This effect is no coincidence, but has been well researched. The so-called affordability illusion describes a psychological principle that can have an enormous effect when used in a targeted and, above all, transparent way, especially in car sales.

What's the Affordability Illusion?

The term originates from behavioral economics. The basic idea:

High total prices have an emotional deterrent effect on customers, even if they could be paid economically. However, if the same price is broken down into small, regularly payable amounts (such as monthly installments), it appears much more acceptable.

From a neuroscientific perspective, this is due to our emotional evaluation logic: the brain focuses on immediate, tangible burdens, not on abstract sums. A monthly installment is concrete, plannable and has a psychologically “smaller” effect - even if it costs more in the long term.

1. Why 399 € sells better than 17.900 €

In sales talks or on the price board, the first impression is often decisive - and this is much less threatening with a three-digit monthly installment than with a five-digit purchase price.

A car for €17,900 sounds like a big investment.

The same vehicle for €399 per month, on the other hand, seems instantly affordable - even though the total sum is higher over 48 months. Emotion beats rationality.

This effect is particularly effective for:

1) Electric vehicles with a high entry barrier

3) Fleet offers for commercial customers

2. HOW THE RATE LEVEL CONTROLS THE TARGET GROUP

Not every rate has the same effect - and not every target group reacts identically. The decisive factor is the psychological message conveyed by the rate:

By choosing the right price model, car dealerships can have a deliberate steering effect - not through discounts, but through psychological accessibility.

3. PRICE TRANSPARENCY AND TRUST DESPITE PARTIAL AMOUNTS

A frequent point of criticism: “Installment prices conceal the actual costs.” This is true - if they are communicated incompletely or sensationally. Professional price presentation therefore means

1) Clearly state the total costs (e.g. “Total costs over 48 months: €19,152”)

2) Disclose services (“incl. maintenance, warranty, transfer”)

3) Juxtapose variants (e.g. purchase vs. leasing vs. subscription)

This creates trust instead of mistrust - a decisive factor in the car buying process.

4. HOW D.A.D SPECIFICALLY SUPPORTS THE AFFORDABILITY ILLUSION

With our Digital Auto Display (D.A.D), car dealerships can utilize the advantages of the Affordability Illusion in a targeted and scalable manner - without manual effort, without printing costs, without rigid processes:

✅ Display installment prices prominently - also calculated dynamically
✅ Transparently show the combination of price, duration and performance
✅ Run A/B tests and variants directly on the vehicle
✅ Real-time customization possible across locations
✅ Integration of financing offers at the touch of a button

This turns psychological theory into a concrete sales tool - integrated into daily business.

CONCLUSION: AFFORDABLE WORKS BETTER

The affordability illusion is not a trick, but an effective way to reduce complexity and create proximity. If an offer appears tangible, it is more likely to be accepted - even if its content remains identical.

Digital price tags such as the Digital Auto Display make it possible to implement these findings in a professional and legally compliant manner. Those who still only show the list price are wasting potential - those who offer emotionally understandable prices are winning.