Sulu

I find that to be extremely arrogant; nobody deserves to overpay.

SW17LS

Its not arrogant at all, but I put a lot of effort into researching prices and knowing the market for a vehicle I purchase. Sorry, I'm not interested in paying more so that somebody too lazy to do that doesn't "overpay". They can do what I do, it's not difficult. I go out of my way as to help people do it on this board everyday, I help my friends, I do it for them even. No arrogance involved.

If theyre too too lazy or disinterested to go to a few websites and send some emails, they deserve to overpay. You don't get what you deserve in life, you get what you negotiate. How do these people negotiate for homes, for salaries at their jobs?

Thats why this frustrates me so much I think, its catering to the lowest common denominator. I'm 110% willing to help someone who wants to get a good deal. If they're too disinterested to care, that's on them. People will take advantage of them, that's life.

gengar

And pointedly, margins staying the same is precisely what happened at the Lexus Plus dealer in the article I linked to earlier in this thread.

The additional point I'll make is that with a no-haggle scheme, labor costs will drop over time - and dealers will be influenced to spec cars to consumer demand (since they need to price the cars to demand, i.e., to sell). These both add tremendous value for the consumer, and in a competitive marketplace, it will result in a relative drop in price of Lexus vehicles. So in the long run, everyone may wind up paying less for their cars. It doesn't have to be the case that prices will stay the same, profits stay the same, and only the relative margin contribution changes. The relative margin contribution can change and profits stay the same and everyone can pay less for their cars. That's what happens when you get rid of middlemen, not to mention sales schemes where MSRP is inflated to build in negotiation room, all so buyers can be forced to pay off unnecessary middlemen.

bitkahuna

iTrader: (20)

Ah we're getting somewhere...

sw15ls - respectfully, just as you don't care if others pay more than you, i don't really care if you can get a lower price than others through your 'research' and 'hard work'. So if lexus plus means people who don't haggle get a lower price than they would have without it, then i'm all for it, even though it means you don't get as good a deal. For you to get that 'best deal' requires others to have naively paid msrp and over for all the crap dealers add to offset hard negotiators like you. I don't want to do what you do at the dealers and i find it irritating, demeaning, adversarial, a complete waste of time, and the opposite of 'great service'. i personally want cars to be orderable online entirely, with the car being delivered. Maybe dealers offer discount codes and coupons and test drives with no pressure. This to me would be fair, and a much better experience.

SW17LS

The bottom line is though, you're okay paying more than you have to in order to get a certain buying experience. That's all I've ever said, that consumers will pay more than they have to.

You always seem to overstate "what I do". It's really not adversarial. I use online sources to give me an idea of where the market is (edmunds, truecar, forums)I get online price quotes from three or four dealers, compare those to my research, see who has the car I want (also online), and get that dealer who has what I want to beat the best price. Dealers get low real quick when they know what you're doing, and the internet sales folks know how internet consumers are and they don't play games. I then get the lease quote in writing with all the terms, compare those terms to the retail lease rate spotted in edmunds lease forum (excellent), negotiate the MF down (they always jack it up), submit the credit app online. Go pick up the car. Whole process takes an hour, maybe 2 depending on how long dealers take to reply. I'm in and out of the dealer in 45 minutes. It's really not a big deal. With Lexus I don't even have to do any research, I just know. It's so easy now anybody can do it, it used to be harder.

I know we've had discussions about dealers and how dealer service is so expensive and you don't see the value, this is no different, all of those people are paying for an experience that you don't see value in. If I submit to this I'm paying for an experience I don't value. I honestly wouldn't buy another Lexus.

And I do care if other people overpay, I have written BOOKS worth of info on here and other forums helping people for no reason other than to help, help friends and people I know. I've negotiated deals for dozens of friends for no gain of my own. I just don't feel badly for people who overpay because they can't be bothered to put a little effort into it. You were joking earlier, but I honestly would negotiate a car for you anytime. People who call me arrogant on this are off the mark.

i understand that I can come across as arrogant at times, but I know my s@it. To say I don't care though isn't a fair assessment.

patgilm

Maybe this Lexus Plus will be best for the majority of buyers like many have mentioned and maybe it will be the norm in the car business in the future. There will still be choices and one can go to different markets to get better prices if they wish.

Like many things in life, if you do some work and educate yourself you can usually come out ahead. I know it rubs people the wrong way here to say the people who don't do some research deserve to pay more but sometimes that's how it works.

The internet has a ton of information that is free. I started leasing a few years ago and didn't know anything about it or how lease payments were calculated. Instead of just winging it, I educated myself on the ins and outs of leasing. I did the same thing when I had to buy windows for my whole house, hvac systems, etc. It takes time and work to understand but it's all free if you want to learn. I saved multiple thousands of dollars doing this and saved an easy $30k on my kitchen remodel GC'ing it myself. I'm sorry but I shouldn't feel guilty for saving money over others because I put the time in to learn when others have the same ability but choose not to.

patgilm

I also wonder how no haggle pricing would affect in demand cars. Would a customer feel good when a high demand car has a no haggle price above MSRP?

A friend of mine just totaled his Honda Oddessey and since the new ones are just starting to come out he had to pay $900 over MSRP. Maybe the Lexus Plus dealers wouldn't do that, who knows. I wonder if the LC500's were selling above MSRP if the Lexus Plus dealers would hold at MSRP.

mmarshall

That was one of the nice features about the old Saturn/Scion no-haggle/list-pricing. By company policy (which was selling all vehicles at list, regardless of demand), not only did it prevent customers from getting a discount (on an average 14% mark-up), but it also prevented dealerships from charging more than list when demand was high. Some Saturn shops got around this, particularly on the low-supply 2-seat Sky roadster, by adding dealer/factory-approved accessories to the high demand cars (which was within the letter, but not the spirit, of the company's policy)........there was good profit, of course, in those accessories. Saturn and Scion however, set their list prices pretty much competitively to start with, so the customer, in most cases, even with no-discount, wasn't paying much more (if any), than the typical out-the-door price on competing vehicles.

Anyhow, to get directly at your point (I know I can be long-winded LOL) , my opinion (not necessarily fact), based on what I've seen, is that most Lexus shops, or at least a majority, would hold at or close to list, partly because Lexus franchises, although privately owned, have generally strict rules from the company HQ itself. You might (?) see some exceptions for the well-known shops that get a lot of sales...but then, again, those shops are more likely to get higher allocations of low-supply vehicles, which will help alleviate the demand. Anyhow, it's an interesting question, and we'll know when LC's go on sale.

Maybe off-topic slightly, but, for your friend and his totaled Odyssey, it might be too late for this one, but, for next time, it might be an idea for him to look into a Liberty Mutual Vehicle-Replacement policy. To my knowledge, no one else has it. I'm sure it's not the cheapest policy out there, but it promises, if your vehicle is totaled, to replace it with an equal or better one, age and mileage-wise. With a policy like that, the insurance company itself (and their lawyers) would do the haggling at the dealership, not your friend.

https://www.libertymutual.com/auto/c...ar-replacement

Toys4RJill

Any time consumers are not paying a price that could be lower or if there is an absence of competition it is not a good thing. This is why I think the program will fail. Competitive prices for consumers is a good thing. Getting the lower price is also a good thing. Prices will absolutely rise if Lexus goes to a no-haggle pricing policy across the board, but I think they rise and then level off around $1000 more than the current average selling price, this increase will be because the consumer will be willing to pay the premium of not having to haggle and perhaps getting their car quicker as Lexus Plus is promising a shorter purchase time. Having the option of both is OK in my opinion.

Looking at some of the prices at Lexus of North Hills, some of the deals do not look all that great. A $330 price deal off a Lexus CT200? http://www.lexusofnorthhills.com/Veh...el=&search=new I am also pretty annoyed that one of their cars states "Contact Us" next to the spot where it says Negotiation Free Price. There seems to be not many other dealers in the area.

Over at Tom Wood Lexus, prices seem to be more reasonable as a Lexus LX is close to $7000 of the price of MSRP. http://tomwoodlexus.com/details/2017...19417199?cid=4

I personally see value in a no-haggle model, but only because traditionally in the past I found it difficult to get a good discount off a Toyota or Lexus model.

gengar

I don't agree with this at all - the notion that MSRP sales are needed to offset negotiated deals doesn't at all fly with the reality of financials of car dealerships. The reality is that dealers make very little off new car sales, with the industry average being a meager 1-2% net profit margin. There's virtually no industry in which that net profit margin is sustainable, and it's true for car dealers too. Review the financials of any dealership group and you will find that new car sales typically make up only 25-30% of revenue - and contribute even less to operating income. So if you really want to know what subsidizes what at dealers, it's actually more profitable income streams like service that is subsidizing those who think they got deals - it's not other new car buyers that are doing that.

This is aside from all the other problems from a middleman negotiating scheme, such as costs going up because additional labor is needed, MSRP getting inflated to build in negotiation room, and dealers having the wrong incentives because they want to appear to cut deals rather than pricing cars to sell. All of which hurt end value to the consumer.

That's why I think in the long term, we'll see new car sales shift away from dealerships to the point where we can order cars online without having to talk to a salesman at all. The margins on new car sales simply don't justify the labor costs, and that's one of the reasons dealers are open to no-haggle sales systems - because forcing customers to pay off an industry of middlemen just doesn't make sense.

gengar

But Lexus dealers will still compete on price even under a no-haggle policy. More importantly, they will also have to compete on price with other luxury brands.

I find this argument akin to claiming that currently, Lexus dealers without local/regional competition would never cut a deal. But we all know that's not true. I for one have gotten great deals even from dealers who didn't have competition within 100+ miles.

SW17LS

But you can see from this forum that people in large urban areas with multiple dealers do get better deals than people in areas with just 1 or 2 dealers. You see that in the model specific forums where people discuss deals they're working on. Look at how much better the deals are in LA than even where I am.

We do agree about one thing, dealers make the bulk of their money on service. Really sales is almost a loss leader. Used cars are also generally more profitable than new cars.

Toys4RJill

But you more than likely get a better deal if there was a competing dealer close by who was offering a better deal. Competition is good for the consumer.

gengar

Nothing in my post suggested otherwise...?

It's the other part of my post - that you snipped - which is the more relevant part.

Toys4RJill

And if the two dealers are no haggle. You almost assured to pay more than a negotiation type dealer.