tqh

SW15LS, what do you mean by "more favorable negotiation"? Can you elaborate?

SW17LS

Essentially they want a bigger discount.

yellow2112

The car buying process is a stupid process in the first place. If the industry allowed for change and stopped these ridiculous $9000 off of MSRP sales, and the like; people would be forced to just pay what the dealer asked.

When you buy a house (a bigger and much more complex purchase) you don't really 'haggle' and the housing industry has perfected the back and forth offers buyers and sellers have between each other to some degree. You don't hear of a lot of people who feel the stigma of their realtor and who feel 'screwed' by the company they work for, so why is the auto industry STILL like this?

As much as you would like to think the auto industry has moved away from the sleazy car salesman, they just haven't learned to get away from their 'bag of tricks' enough to make the experience any different.

Case in point, my new Toyota Tundra purchase in 2011. Bought 20" rims/tires and a tonneau cover in addition to the truck and had the cost worked into the payments. Plan was to have 20" summer wheels and 19" winter wheels then. Sales guy, (who is unfortunately the sales manager now) said that I wouldn't be getting the factory rims AND the 20" ones. I said, 'why the hell not? I'm paying $2000 for the big ones over 60 months, why wouldn't the factory ones be included?"
"i'll go ask the sales manager" he said
10 minutes later....(and after I told him I would take the tonneau cover and 20" rims/tires from the deal and just buy them online)
"Sure, he says you can have the factory rims too!"

What a joke! Thanks pal, for letting me take what I am paying for. I really, really couldn't believe my ears. God only knows what they were going to do with the factory rims anyway. The truck had seen the road. They were worthless from a dealer standpoint.

So, they just feel they MUST have control and they want you to feel like you have no control at all.

SW17LS

Just understand you're going to pay more. You don't have to get a discount. Don't want to haggle? Go in and pay MSRP. Why do they have to discount? You want a bottom price without having to put the effort in. Don;t want to haggle, but you still want a discount.

HAHAHA! I'm in the real estate business, people absolutely haggle when they buy houses. We price that into houses. I've seen people fight for hours over $1,000 on a $750,000 house. I've seen people walk away from deals over that much or less. I've seen people argue for days over $500 worth of home inspection repairs. All. The. Time.

Why do people hate Realtors less? They do...but only slightly. Reason being theres a layer of legal agency there, good realtors (note I said good. LOTS of not good out there) really take that seriously and it shows, we have very satisfied and loyal clients. Remember too, for every buyer who feels screwed and blames their agent theres a seller that benefitted from that screwing and loves their agent. Whereas everybody hates car salesmen...always.

Hoovey689

iTrader: (16)

If Apple can charge basically one price for an iPhone (granted there are different models) regardless of store, then I don't see why Lexus can't do the same. The difference will be in the incentives each store wants to give like free services or all-weather mats. Similar to how an iPhone 64gb costs the same at the Apple Store as it does at Best Buy, but at BB you'll get a $100 gift card or whatever they've currently incentivizing.

The initial test stores are doing well with the one price stragetgy. Several CA stores are gearing up for the transition. The days of Manufacturers Suggested Retail Price (MSRP) seem to be giving way to Manufacturers Retail Price (MRP)

SW17LS

Do people not realize that you can pay MSRP if you want? You'll have a great experience.

And Lexus can do that...but we as consumers will pay more than we do now. Do we want to pay more? I don't.

mmarshall

What about if or when you haggle and STILL don't get a discount? A bazaar-type atmosphere and stubborn bargaining won't necessarily get lower prices when there is high demand and low supply of something. Although there were a few benevolent and/or honest dealerships at the time, I can remember the price-gouging that took place at a lot of shops when the Miata, CRX, PT Cruiser, 2-seat Thunderbird, Prowler, Shelby Mustang, Camaro SS, 350Z, and others first debuted. In most cases, salespeople didn't argue.......you either paid the markup or you weren't the first one on your street to get one.

SW17LS

Price gouge away. Its a free market, I see nothing dishonest with dealers charging over MSRP for in demand cars if thats what the market will command for those cars. If you don't want to pay. don't buy the car. No different than the consumers response of "if you wont sell it to me for this price, I won't buy the car".

Consumers want it both ways. They want to pay less than MSRP because of low demand...yet when demand is high that MSRP number is all of a sudden sacrosanct. You can't have it both ways...

Let dealers charge whatever people will pay.

mmarshall

Oh, I wasn't necessarily arguing with you. I agree that some customers are unreasonable, and are never satisfied.....I said that in an earlier post. But my point was that haggling doesn't guarantee a discount.......as we both noted, in some cases, it doesn't even get you back down to list price LOL.

Under the no-haggle system, though, customers can and do benefit when the list-price/no-haggle policy prevents dealerships from raising prices above list when demand exceeds supply. That was one reason (among several) why Saturn was so successful in the 1990s, before their demise. Dealers had to charge list even when there was a line of people a block long, outside the dealership, waiting to buy their products.. The no-haggle policy, to an extent, made its own market......though some Saturn dealerships (such as when the popular Sky roadster came out), found they could make money by adding dealer/factory-approved accessories to each Sky in stock, and charging for them, which did not violate company policy.

Hoovey689

iTrader: (16)

So do and some don't. These haggle free stores aren't charging MSRP, just a fair set price that the dealer network will likely adopt within the next few years. Incentives and extras will still be haggled over as they always have.

People will complain all they want, but in the end Lexus is going to do what they want. They have a lean model line-up, simplified builds by region, and the uniform pricing bolsters this strategy.

Some will love it and some will hate it. But hey that applies to most everything in life I guess

SW17LS

Nothing is ever guaranteed. In order to succeed in a negotiation you have to have something the other party wants, some basis from which to negotiate. If demand is so high and there are more buyers than cars to buy, then you have no basis. Hard to be effective.

I will say that in 2004 I bought a Prius when wait lists were 8 months long and markups were 5-10k, in stock with no wait and for MSRP. that wasn't really negotiation skill but a little bit of shrewd shopping. I bought it in WV where nobody cared about hybrid cars lol.

That the issue. No, no haggle dealers aren't charging MSRP. Why? Because they still have to compete with regular dealers. When all dealers adopt this, why would they discount? All the numbers just fall into their control, and the market doesn't play a role that we can manipulate as consumers. That doesn't benefit us.

Hoovey689

iTrader: (16)

True, it's a silly system with only a few stores currently in the program. They've had those stores operating like this for over a year now. I'd be curious as to those stores CSI scores (before, after, and against current competitive stores).

That's a valid question and a possibility, but only time will tell. The other side of the coin is that Lexus has a fair uniform sale price in mind when they do fully implement the pricing strategy.

Sounds cliche, but businesses should be able to make money while at the same time consumers save money. Good in theory despite not always translating well in practice (either side could get the short end of the stick in a given scenario).

SW17LS

Absolutely they should make money. I just want them to make money off of the schlubs who can't negotiate a good price so I can negotiate a great price

chikoo

They will discount when it is end of the month, quarter, and year. After all how else are they going to meet their sales targets? and ENTICE the customer not only to come in but also to drive out with a car?

SW17LS

But they can't decide when to discount. Lexus sets the pricing, not the individual dealers. All the dealers will have the same pricing.