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Lexus expanding the "no haggle" programs

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Old 05-17-17, 07:01 PM   #1
Johnny Mayday
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Default Lexus expanding the "no haggle" programs

Personally, I hate negotiating, and I don't like the idea of having to deal with any shady sales tricks, so the no haggle idea is kind of appealing. Lexus has experimented with this before, and this article on the HP talks about how they're expanding the program. Isn't this the way Scion used to do it? Did anyone actually buy their car this way? I guess CarMax would count.
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Old 05-17-17, 07:40 PM   #2
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I'm with you, Johnny......I'm all for it. We've got a group of dealerships, here in the Maryland suburbs of Washington D.C. (the Fitzgerald chain), that has been doing that for decades. I haven't bought a vehicle myself from them (yet), but have shopped with many others and co-workers there (including our former Government workers' Union President)...and all have been very well-pleased with the "Fitz" Way. The main reason I haven't is that I prefer to have a dealership closer to my home in the Virginia suburbs...and Fitz doesn't sell there.

And Fitz isn't alone now, ether.......some other dealerships are also adopting the practice as word gets out that customers like it.

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Isn't this the way Scion used to do it?
Yes and no. Scion more or less copied Saturn's policy, which started more than a dozen years earlier, of pricing their vehicles at moderate, competitive prices and selling them at full list, with no-dickering (Saturn also had a 30-day money-back policy, with a clear title and no vehicle damage, if one was not fully satisfied...so there was no Buyers' Remorse). Both divisions, of course, eventually folded, but that was not because of their sales-practices......their products and management both got messed up, in their later years, by the overseers at GM and Toyota who had no clue of what they were doing.

That's not the Fitz way, though. Fitz usually doesn't sell at full-list, but builds in a healthy discount off list...with a (slightly) higher price if you want some extra free-service or a longer warranty. Neither one is negotiable....it's take it or leave it. A lot of people apparently take it, since the chain has been quite successful.

I know, however, that there are two kinds of folks who would turn this type of offer down. First, those who are never satisfied, no matter what the asking price is...they will always think they are getting screwed, whether in fact they are or not (I've shopped with a couple of those over the years, and it is not only frustrating but embarrassing as well). Second, those who love to shop like they are in a Middle-Eastern Bazaar, not being able to agree with the merchant on even what time of day it is LOL. They will bargain for hours to save pocket-change. My brother had a friend like that....kept a poor Honda salesman (whose wife and kids were probably waiting for him at home) up till midnight while bargaining on a cheap Civic hatchback, of all things (he later bragged about it). Fortunately, I wasn't part of that deal........he didn't ask me to go with him, and if I had known what he was going to do, I would have told him bye.......he was on his own anyway.

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Old 05-17-17, 08:34 PM   #3
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Be all for it...just understand we will be paying more for Lexus vehicles. Look at the feedback here from people who dealt with LexusPlus dealers, they paid way more and those who were able to compare with a standard dealership saved thousands by going to a traditional dealership.

Like I said before, you have a no haggle price now...the sticker. If one truly doesn't want to haggle and doesn't care about getting the best deal they can...just pay sticker. But, you don't want to do that, you want to see some arbitrary "sticker" price and some pretend "discount price" and think you're getting a deal while those of us who actually take the time to analyze the market and know what a good deal is, and are assertive enough to negotiate that deal get stuck paying more than we would have had to.

If this is the status quo when it comes time for me again, it will be the nail in the coffin of my Lexus ownership.

Fitzgerald is different. They compete with traditional dealers offering internet pricing and they build in a reasonable pricing structure because of that. I've never seen them offer a price that I couldn't do better than, but I've never seen them offer a price I didn't think was an "okay" deal. And here's a little secret...they WILL haggle. I negotiated a Miata for my buddy and he wound up buying it at Fitzgerald in Frederick...I had a lower offer than their "FitzWay" price and they beat it, same as any other dealer. Its all just a game.

The other thing about Fitzgerald is they have a ton of extras they sell you. Oil change packages, loaner packages, up the wazoo. Still have to negotiate those.

If ALL Lexus dealers become LexusPlus no haggle dealers...there won't be any competition between dealers and prices WILL go up. Its business 101...its price fixing (it isn't technically, but you can make an argument that it is)...and theres a reason price fixing is illegal...because it hurts consumers. I honestly do not understand how you guys don't see this...these numbers are just made up numbers. If I sell hats and my MSRP is $10 and I sell you the hat for $8 because you negotiated, you saved $2. Some people come in and pay $10, so I can sell them sometimes for less profit to people who drive a hard bargain. If the "MSRP" is $15 and I charge you a no haggle $12, you did not save $3! You got played for a fool and paid more than what my sticker price used to be before I rolled out my "Steve's Customer Friendly HatsPlus" program. Steve wins, you lose. The fair market will always adjust prices the way they need to be adjusted, and the consumer is better off when there is more competition for their business. Consumers should NEVER wish for a less competitive marketplace for their business. If you want to see this phenomenon in action...look at Costco. Some things are deals, some things really aren't. In fact, some things are actually more expensive than they are elsewhere...they are betting that you're assuming you're getting deal because you're in Costco. People fall for it every hour.

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Old 05-17-17, 08:48 PM   #4
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No thanks I want the haggling. It's one of the reasons I started buying new Lexus' years ago because the negotiated price was close enough to some of the used prices. It also makes it more economical when I compare it to their German competitors. With negotiations, depending on the model you can get a good bit below invoice. If I am paying one standard price, I'll go to another brand where I can negotiate and make it more economical.
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Old 05-17-17, 08:58 PM   #5
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No thanks I want the haggling. It's one of the reasons I started buying new Lexus' years ago because the negotiated price was close enough to some of the used prices. It also makes it more economical when I compare it to their German competitors. With negotiations, depending on the model you can get a good bit below invoice. If I am paying one standard price, I'll go to another brand where I can negotiate and make it more economical.
I agree 100%, if people aren't willing to do some research and negotiate on their own behalves let them pay the sticker price. Why should we be penalized?

People want an easy transaction free of games, just pay whatever they ask of you. They will LOVE you and you'll have a wonderful experience? Me? I had to force them to put gas in the car one time and it didn't bother me at all.
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Old 05-17-17, 09:05 PM   #6
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I agree 100%, if people aren't willing to do some research and negotiate on their own behalves let them pay the sticker price. Why should we be penalized?

People want an easy transaction free of games, just pay whatever they ask of you. They will LOVE you and you'll have a wonderful experience? Me? I had to force them to put gas in the car one time and it didn't bother me at all.
Don't get me started on the part when I am sent to finance after I negotiate the price of the car and they try to sell me the wheel and tire package, crappy ceramic coating they offer, and other BS maintenance packages. That drives me crazy. When I turn them down on these extras it's like they think I'm crazy or insulting them.
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Old 05-17-17, 09:16 PM   #7
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lexus are mostly made in japan and are always cheaper to buy in LA....its closest to port.
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Old 05-17-17, 09:36 PM   #8
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Originally Posted by patgilm View Post
Don't get me started on the part when I am sent to finance after I negotiate the price of the car and they try to sell me the wheel and tire package, crappy ceramic coating they offer, and other BS maintenance packages. That drives me crazy. When I turn them down on these extras it's like they think I'm crazy or insulting them.
Oh my god. The worst. I helped my marketing person buy a used Mazda CX-5 a couple months ago. The thing was $19,000 and had like 30,000 miles on it...and it was certified. The finance guy after trying to get her to get a loan for 40 minutes when she was paying cash, tried to sell her...warranty and protection packages that totaled $9,800. $9,800 on a $19,000 used Mazda. He couldn't believe I told her to decline them. He says "you have to get the wheel and tire package for $1,300 and the extended warranty for $3,900 to cover it until 90,000 miles at least". I'm like, wheel and tire package? It has 15" wheels and 70 series tires on it...you could replace every wheel and tire on that Mazda and it wouldn't cost $1,300. $3,900 for 60,000 miles of coverage on a Mazda? What is it going to need before 90,000 miles that could possibly cost $3,900? No navigation screen. No adaptive suspension, no parking sensors even. He's like "what if it needs a transmission?". That wouldn't cost $3,900 either! An extended warranty from Lexus on my LS460 isn't $3,900! Insane. For the cost of all of those packages and the cost of the car she could have bought a brand new Grand Touring CX-5. If I hadn't been there she'd have bought all of it. Crazy. He didn't speak to us the rest of the time. Handed documents "sign here", handed her docs "you're all done".

THATS not going to stop with no haggle pricing either. Thats where the profit is made thats why they push it so hard.

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lexus are mostly made in japan and are always cheaper to buy in LA....its closest to port.
Thats not why they are cheaper in LA. Manufacturer to dealer pricing is dynamic, but its not that dynamic. There are better deals in LA because of competition. Tons of competition in LA, there are like 14 Lexus dealers. If you have no haggle pricing and all their prices are the same, do you not think you will pay more? Business 101.

By that logic, why aren't Lexus vehicles cheaper in Seattle? Or Northern CA? Its the competition in LA and SoCal.
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Old 05-17-17, 10:21 PM   #9
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Consumers wanting "no haggle" pricing on $50,000+ purchases are broadly like turkeys voting for Thanksgiving... It's a one way ticket to a mediocre deal. You don't need to be a d**k to get a good deal, you simply have to do some homework and play the game - and it absolutely is a game - on your own terms. We're talking about trusting car dealers with what it likely your second most expensive purchase here. They have a poor reputation for good reason, and some good examples of why that is have already been posted in this thread. Sure, not every dealer is out to screw as much as possible out of the deal, but it's generally wise to assume they all are to one extent or another.

My local Lexus dealer is notoriously firm on price, and offers mediocre discounts. When I bought my wife's RX, with an MSRP of around $57,500, they were willing to knock 2500 off MSRP and massively lowballed the trade. Would not budge when I had my check book in hand and was ready to buy right there if the deal was acceptable. A dealer 35 minutes away sold me the same car for 50K, and offered exactly what I asked for my wife's MDX. We closed that whole deal with one phone call, and it made it subject to my inspection of the new car and their verification of my representations about our trade in. I got there and we had the deal closed in 10 mins. That kind of "no haggle" I can get on board with. I had another deal in my pocket for around the same as the deal I did, but it was maybe an hour away.

As others have said, no haggle pricing will result in higher prices for consumers and customers buying from other premium brands. More to the point, in a market where all the dealers are owned by the same owners then that "no haggle" price is, in reality, tantamount to price fixing for that market.

You don't need to have a "I'm getting screwed" mentality, and it's not embarrassing to find a way to write a smaller check.

You just have to play by rules that *you* set and remember that if you don't like the deal then you walk as you can almost always find one somewhere else.
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Old 05-17-17, 10:28 PM   #10
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Well said, I too feel no need to be a jerk, it's just business, and I don't find it hard to get to a bottom price either, a couple phone calls and emails, they clearly see I know my numbers, and they fall in line quickly. People who "hate haggling" try and go into one dealer and sit there until you get it done, that's the wrong way to go about it.
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Old 05-18-17, 03:26 AM   #11
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Agreed with Steve. I'm no fan of negotiating, but if this becomes standard, I'll never buy another Lexus, except possibly used. My wife and I work hard for our money, and we're not going to simply give away multiple thousands of dollars because it saves us an hour of discomfort.
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Old 05-18-17, 04:09 AM   #12
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Personally I believe no haggle programs work in the favor of the house. I have tried them all--I belong to the largest credit union in the nation, the 3rd largest, tried those. AAA, that warehouse club that's paying a special $7 dividend, and what I thought might just work, edmunds. They all upcharge higher than what you can negoitiate yourself. One of the best was BMW. They try to tack on training and MACO, and it's pretty sly. Because it won't appear on "invoice" when you look it up online, and it never appears on the window sticker. Where it does appear is on the dealer's invoice. My order was in and the car was being produced in Regensburg when they called me to say they forgot to add it. Long story short, no, I didn't pay it.

As mentioned, we can buy a subaru for employee pricing, and those prices are high.....so agreed, none of us like haggling on a car, but it's our hard-earned dollars at stake. Maybe try eBay if one doesn't like to haggle, it's not perfect, but it's often a very efficient market....I've never seen lower prices on OE Lexus parts, just that it's not on every part, it's rather limited....my .02
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Old 05-18-17, 04:14 AM   #13
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Originally Posted by SW15LS View Post
Well said, I too feel no need to be a jerk, it's just business, and I don't find it hard to get to a bottom price either, a couple phone calls and emails, they clearly see I know my numbers, and they fall in line quickly. People who "hate haggling" try and go into one dealer and sit there until you get it done, that's the wrong way to go about it.
Totally right, think about all the sales people who try to get you at work....it's mind boggling that they think they'll get a 3 mil. contract when they simply spammed you off of linkedin. Don't you love the invites/connects to 2nd degrees, and next thing you know a IM thanks for connecting, who do I talk to about x?

I've only purchased 3 new cars, and what I've done is to negotiate the price to a point that there is no counter-offer. I know I've treaded into the sacred area where it's both pride and profit where they won't do it. Then I go to dealer #2, state that dealer #1 offered the price, and dealer #2 writes it up. They're not in a position where they felt I squeezed blood from stones, i.e. pride element not there. And they love a 5 min. sale.....my .02
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Old 05-18-17, 06:52 AM   #14
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I agree 100%, if people aren't willing to do some research and negotiate on their own behalves let them pay the sticker price. Why should we be penalized?
So who pays the sticker price LOL? Except for a few very high-demand/low-supply cars, that nonsense went out after the 1980s were up (and the import-quotas we had back then that jacked up the price of Japanese cars). Unfortunately, though, if Trump gets the 35% import-tariff he wants on cars sold here but not built here, at least some of that might come back.

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Me? I had to force them to put gas in the car one time and it didn't bother me at all.
That shows you were dealing with a bunch of cheapskates LOL. I've never had any problem at all getting a full tank of gas at delivery. Neither have most of those I've shopped with.....at most dealerships, it's pretty much a given now.

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Old 05-18-17, 07:01 AM   #15
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You also have to look at other expenses besides just the dealer-discount off the list price. What will the proceeding fee be? (In Virginia, for example, it can vary widely from dealership to dealership......Maryland limits it to $299 by law). You won't get around state tax, of course.....as with licensing, that's settled by law, and where the car will be registered. Are they being honest on factory rebates, and applying them correctly?...some places will try and pocket the rebates while trying to make it appear they are passing them on. How much will they want for dealer-installed (but factory-approved) accessories?...that was an issue I ran into when I ordered my new Lacrosse, when I wanted the all-weather rubber floor mats (you can buy rubber mats much cheaper, of course, at an auto-parts store, but they won't be custom-fit and/or cover the whole wheel well).

As for the aforementioned fees for training and ads, I agree that is nonsense. To those, just say no.
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