geko29

Taxes are a factor. But you know what's the more important factor? The fact that you're paying more. It is FAR better to NOT spend $100, and miss out on the $25 or less in tax savings. You come out $75 or more ahead.

gengar

You are seriously arguing that people will opt for a higher lease payment so they can "save" a fraction of that higher payment on tax deductions?

mmarshall

No. Of course one will not get it all back....I don't know how you could assume I was saying that. Nor was I implying that. I just said that in some circumstances, people will get some of it back. In those situations, it's at least better than nothing.

mmarshall

Oh, I agree......(see my reply to gengar, just above). But when you do pay more, at least in some business-related circumstances, you won't necessarily lose all of it....some of it will come back with your yearly tax-refund (or lower your tax-bill, if you owe). But, no, I agree...if you can get a lower lease-payment, take it.

SW17LS

I just don't agree, sorry. My disagreement is based on my own experience with car dealerships both as a consumer and consultant, and my experience with wholesale and retail business in general. Lexus isn't going to revolutionize the auto sales industry. We've seen no haggle strategies before, this isn't new. Look at Tesla, I have no doubt that consumers pay more for Teslas than they would if they had a fleet of franchised dealerships competing for their business. They're not "changing the game" they're just removing a variable from the game. Dealer business structures are going to be the same, these dealers are established independent businesses that have existed for decades, they aren't going to change. The manufacturer to dealer relationship isn't going to change...all that changes is the dealer's ability to make deals based on market factors and individual demand, their ability to compete with each other. They're going to be working together to keep sales prices high, where now the free market drives them down with demand.

It's not rocket science. You have a wholesale price for a car, and a retail price. In between the two is the dealers profit. The dealer wants to keep as much of that as possible, and we as the consumers want to spend as little as possible. Dealerships aren't going to adopt systems that provide less profit for them and more savings for us. All a system like this does is give the dealer and the manufacturer greater control over what sales price we as consumers pay. Right now, they're at the mercy of the free market, if they set the only sales price then we as consumers have to accept it, or buy another brand of car.

The experiences with LexusPlus are out there, they are on this forum now. These dealers charge considerably more than competing dealers are willing to sell cars for. Look in the model specific forums as members encounter dealers doing this.

SW17LS

I do know people who do their leases this way, but they do them this way by getting the lowest residual possible so that they can write off the largest amount of depreciation, then buy the cars out and keep them for the well below market residual. It's just a matter of moving the money around.

But otherwise no, spending money you don't have to just to get a tax deduction would be stupid.

gengar

Agreed 100%, it's far from rocket science to understand that prices change and consumer value changes when systemic overhaul causes costs and incentive to change. But you stated the problem yourself - you refuse even to acknowledge the possibility that these things change.

Then again, the mere fact that you could even suggest that an entire industry composed of nothing but middlemen could possibly cause end-user prices to drop may indicate that perhaps it is rocket science, at least to some.

mmarshall

That's one of the things that got Tesla in trouble. First, no mass-production auto company has ever succeeded, long-run, in owning and operating all of the sales/service and repair facilities.......it's just too much overhead at the corporate level. Second, Tesla, until recently, was able to charge (and, to some extent, justify) high prices, based on the fact that their vehicles could simply run longer, and need less recharging, than other pure-electrics. But, wth the advent of lower-priced long-range alternatives like the Chevrolet Bolt (not Volt....Bolt), those Times-are-a Changin'.


Depends on how much they want to satisfy customers. This isn't the 1950s any more....or even the 1980s. There is enormous pressure, nowadays, to do well in the Consumer-Reports and J.D. Power customer-satisfaction surveys. The sales-experience satisfaction for customers is a significant part of those surveys.

Toys4RJill

I agree. The no haggle system to me is pretty much the same as the buying agency system. I would honestly like to see a good scholarly study comparing the two methods. Something tells me that the no haggling set up will be a little more than the negotiation method but I don't think by a lot more.

With all the research methods today. I doubt prices are going to be higher. I also don't think the prices will be anywhere near MSRP. I also don't believe an all haggle system will succeed. I am glad to see they have both system available.

SW17LS

Were not talking about systematic change to the industry. This is one carmaker flirting with no haggle pricing. This is not the sort of fundamentally different approach you see with Tesla, for instance. Of course things can change, but this is not going to be what makes it change is my point. The same fundamental system will exist, the only thing that will change is individual dealers ability to compete with each other for our business. And sorry, I don't see how that doesn't cause consumers to pay more.

i'll give you a little insight....nobody wants to satisfy customers more than they want to make money. Businesses exist to make money, they want to satisfy customers to the end where it makes them more money. Survey results don't pay the bills, profits pay the bills.

mmarshall

Not only that, but many customers today want (or expect dealerships to have all kinds of amenities......coffee/latte machines, snack bars, play areas for the kiddies, car washes, etc..... And, of course, I like to get my (and my guest's) supply of free D.C. Auto-Show passes each year, which are given out at local-area dealerships......each regular free pass is worth $12 or more, with the VIP show passes up to $48 apiece). That kind of stuff doesn't come as a free lunch....dealerships probably couldn't afford most of that if they charged rock-bottom on every sale.

gengar

It's not just the price but also the value to the end consumer. Prices will necessarily have a relative drop because costs will drop, but we'll also see added value because dealers won't feel the need to option their cars with high-margin BS just to up the sticker. Perfect example of this was right after the GS-F came out and I was at a Lexus dealership that had THREE of them just sitting in the showroom unsold. All three were chock full of dealer options like tint, clearbra, wheel protector, etc. etc. etc. Why? Because they knew they were going to have to discount them to move them anyway, so the dealer loaded them all up with hundreds/thousands in extra dealer options so they can appear to discount the cars even more - even though those options cost pennies on the dollar. Based on this thread, I'm sure a buyer who wouldn't even have wanted tints / clear bra / whatever would have eaten that all up, hook line and sinker.

Under a system where the dealers actually have to move cars without negotiation, there's no incentive for this BS. In order to sell cars, Lexus will have to option the cars the way the end consumer wants them and price the cars the way the end consumer wants them.

The incentives are all messed up in the current system - because the negotiation scheme is nothing more than a sales gimmick. As I've said before, it's like the shady kiosks at the outlet mall that say "50% off today" but those signs are up every day. Be naive enough and you will feel good about getting a deal "today". To me, it's amazing the lengths people will put themselves through just to have a utterly faux feel-good feeling.

SW17LS

LOL, to me what you're describing IS LexusPlus. The "LexusPlus" price is the "deal" that's up every day that you think is a great deal because they're showing you a fake retail price in comparison. Exactly the same thing.

How is comparison son shopping offers from competing dealers, using that competition to reach a bottom price and purchasing the car the same as what you describe?!

gengar

The intention of Lexus Plus isn't to fool customers into thinking that there is a deal today that won't be there tomorrow. But given how much you've had to reach for straws throughout this thread, I'm not at all surprised by your comment.

SW17LS

LOL, whatever you say.