Interesting...Toyota's Lexus Testing Haggle-Free Sales at 12 U.S. Stores
05-24-16, 09:32 AM
#226
I work at Lexus of Omaha in Omaha, NE. We are one of the 12 pilot stores for this Lexus Plus program. We had our soft launch for this on May 15th, so only have 12 days of experience to speak of. The program seems to be going very very well so far. Our discounts off the sticker price on most of our new cars are WAY!!!! more than you would have ever gotten off using the old system. For example. 2016 GS350,F-Sport, Nav, Levinson, AWD, Sticker is $60,358. We were selling those all day with MAYBE a $2,500 discount, and that is a last day of the month at 10:00pm when we need 4 more deals to hit our objective. Our Lexus Plus price on that car is $52,680. That is blowing peoples minds. We are also doing the same thing with trade in numbers, and offering to cut them a check for the car whether they buy a car from us or not. Of the people who we have let walk because they insisted that we must negotiate on our car or theirs, I bet 50% have come back in within 2 days and said "yeah I shopped around and that is a good deal, I'll take it."
05-24-16, 09:39 AM
#227
Lead Lap
Yes. We are both owned by the Baxter Automotive group. It is our sister store Lexus of Lincoln and it's only 40 miles away. Our owner has been sitting in these "fireside chats" with some top guys from Lexus, and has been pushing them for 2 years to get this pilot program underway so we could test the waters for them using both of his stores. We share inventory with this other store quite a bit, so they have it figured out where we also share the Lexus Plus price for the same vehicles.
I should also mention that a big part of our transition to Lexus Plus is going to a "single point of contact." The salesman sells the car, does the financial paperwork and does the delivery. It seems like it is building a lot of credibility with the customers. We went through a very extensive amount of training oriented toward putting the customer first. We let them know we are a Lexus Plus dealership and how the new system works with no negotiation. Then, instead of trying to push the customer through our set in place process, we simply ask them "where would you like to start?" Customer wants to get his trade looked at before looking at a new car, we do it. The guys who come in and try to play hardball with us get caught so off guard trying to do the "hide your trade till the end" tactics. They are left without any ammo for objections, and seriously just roll over and take the deal. We are basically killing them with kindness. They want to walk, we let them. They are so confused when you aren't chasing them to the door trying to offer another $500 for their trade. For us, we are so confident on the prices that we can honestly let them walk and not worry about our nearest competition (Kansas City, Des Moines, and Quad Cities) beating our deal.
I should also mention that a big part of our transition to Lexus Plus is going to a "single point of contact." The salesman sells the car, does the financial paperwork and does the delivery. It seems like it is building a lot of credibility with the customers. We went through a very extensive amount of training oriented toward putting the customer first. We let them know we are a Lexus Plus dealership and how the new system works with no negotiation. Then, instead of trying to push the customer through our set in place process, we simply ask them "where would you like to start?" Customer wants to get his trade looked at before looking at a new car, we do it. The guys who come in and try to play hardball with us get caught so off guard trying to do the "hide your trade till the end" tactics. They are left without any ammo for objections, and seriously just roll over and take the deal. We are basically killing them with kindness. They want to walk, we let them. They are so confused when you aren't chasing them to the door trying to offer another $500 for their trade. For us, we are so confident on the prices that we can honestly let them walk and not worry about our nearest competition (Kansas City, Des Moines, and Quad Cities) beating our deal.
05-24-16, 10:46 AM
#228
Thats impressive. However I guess what alot of us are going to point out though is that, the regional area you mention is also void of any serious dealership density with many dealers being in the same automotive group. For instance I probably have access to 10 dealers in a stone's throw distance all vying for my biz and only know of one dealership that has joined the program, and seeing how the other dealerships offer is extremely better its hard to go with the LP experience.
05-24-16, 10:50 AM
#229
I get what you are saying. I think they figured that if the customer just sees one price, what's to say that isn't the sticker price being offered under the guise of "our best price" This puts to rest any argument from the folks who shop on a "I need to see some money off, even if its only $500 off" way of thinking.
05-24-16, 10:54 AM
#230
I think this is exactly the question they are trying to get the consumer to ask themselves. Wouldn't you just want to get a great price, up front with no negotiations? Or would you rather spend 2 weeks battling it out with a dealership to get to basically the same price? What is your time worth to you Mr. Consumer?
05-24-16, 11:07 AM
#231
Lexus Fanatic
I work at Lexus of Omaha in Omaha, NE. We are one of the 12 pilot stores for this Lexus Plus program. We had our soft launch for this on May 15th, so only have 12 days of experience to speak of. The program seems to be going very very well so far. Our discounts off the sticker price on most of our new cars are WAY!!!! more than you would have ever gotten off using the old system. For example. 2016 GS350,F-Sport, Nav, Levinson, AWD, Sticker is $60,358. We were selling those all day with MAYBE a $2,500 discount, and that is a last day of the month at 10:00pm when we need 4 more deals to hit our objective. Our Lexus Plus price on that car is $52,680. That is blowing peoples minds. We are also doing the same thing with trade in numbers, and offering to cut them a check for the car whether they buy a car from us or not. Of the people who we have let walk because they insisted that we must negotiate on our car or theirs, I bet 50% have come back in within 2 days and said "yeah I shopped around and that is a good deal, I'll take it."
In my marketplace where we have 5 dealers within 25 miles of here, GS350's sitting on the lot are marked down $4,500 with no negotiation. Discounts here are much greater, as they are in other city centers, CA...etc.
The prices will be surprisingly low now to get people hooked in, if they go nationwide with this though...the discounts won't stay that way. They can offer deeper discounts in your market because they are rolling back discounts in high volume markets like mine and others.
It has to come from somewhere.
05-24-16, 11:25 AM
#232
This is the case in your market where there aren't a lot of competing dealerships, this is also the case in hakim's market in southern WV. I'm from Southern WV, not a lot of Lexus dealers around.
In my marketplace where we have 5 dealers within 25 miles of here, GS350's sitting on the lot are marked down $4,500 with no negotiation. Discounts here are much greater, as they are in other city centers, CA...etc.
The prices will be surprisingly low now to get people hooked in, if they go nationwide with this though...the discounts won't stay that way. They can offer deeper discounts in your market because they are rolling back discounts in high volume markets like mine and others.
It has to come from somewhere.
In my marketplace where we have 5 dealers within 25 miles of here, GS350's sitting on the lot are marked down $4,500 with no negotiation. Discounts here are much greater, as they are in other city centers, CA...etc.
The prices will be surprisingly low now to get people hooked in, if they go nationwide with this though...the discounts won't stay that way. They can offer deeper discounts in your market because they are rolling back discounts in high volume markets like mine and others.
It has to come from somewhere.
05-24-16, 11:36 AM
#233
Pole Position
Accepting the "best price upfront model" would require a dramatic change of consumers' mentality and also, dealers coordinated efforts. There's a general lack of transparency and confrontational approach that is deeply ingrained in people's psyche. And that's the way car business has been here since what, the 60s? Playing the game of rebates, dealer cash, special incentives, bumping money factor/interest rates, lowballing on trades etc. etc. Customers in fact are just as guilty, often resorting to unethical ways of purchasing cars. Professional salespeople hear from day one that "buyers are liars". Consumers in return believe that all car salespeople are shady and are out there to rip them off.
This general lack of trust and hostility unique to the US automotive market may be hard to overcome. Yet, citing yet again the Land Rover/TATA experiment, it can certainly be done if both customers and car dealers start to recognize that there's another way, a way of transparency that benefits all.
This general lack of trust and hostility unique to the US automotive market may be hard to overcome. Yet, citing yet again the Land Rover/TATA experiment, it can certainly be done if both customers and car dealers start to recognize that there's another way, a way of transparency that benefits all.
05-24-16, 12:02 PM
#234
I get what you are saying. I think they figured that if the customer just sees one price, what's to say that isn't the sticker price being offered under the guise of "our best price" This puts to rest any argument from the folks who shop on a "I need to see some money off, even if its only $500 off" way of thinking.
05-24-16, 12:15 PM
#235
Lead Lap
Accepting the "best price upfront model" would require a dramatic change of consumers' mentality and also, dealers coordinated efforts. There's a general lack of transparency and confrontational approach that is deeply ingrained in people's psyche. And that's the way car business has been here since what, the 60s? Playing the game of rebates, dealer cash, special incentives, bumping money factor/interest rates, lowballing on trades etc. etc. Customers in fact are just as guilty, often resorting to unethical ways of purchasing cars. Professional salespeople hear from day one that "buyers are liars". Consumers in return believe that all car salespeople are shady and are out there to rip them off.
This general lack of trust and hostility unique to the US automotive market may be hard to overcome. Yet, citing yet again the Land Rover/TATA experiment, it can certainly be done if both customers and car dealers start to recognize that there's another way, a way of transparency that benefits all.
This general lack of trust and hostility unique to the US automotive market may be hard to overcome. Yet, citing yet again the Land Rover/TATA experiment, it can certainly be done if both customers and car dealers start to recognize that there's another way, a way of transparency that benefits all.
In specific I`m referring to the pricing they set on the Ranger Rover and Range Rover Sport vs the DIscovery/LR4, Discovery Sport, and the Evoque (which although has the RR stamp).
05-24-16, 12:18 PM
#236
Lead Lap
Wouldnt introducing a set discount on pricing (if they introduce the 8K discount that was mentioned above) also reduce resale values? If everyone got the same rate of discount then resale values would stabilize but would become lower if they were high enough discounts being initially given.
05-24-16, 12:34 PM
#237
Lexus Champion
It seems like the whole point of a test or pilot program is to get the answers/learning from stores like Omaha etc. to all the questions and speculation being discussed. Toyota and the Lexus division in particular have a lot more learning and market insights than we do, and I'm sure are aware of the pros and cons, risks and rewards, to a program like this. Hence the testing. It will be interesting to see exactly what comes of it.
05-24-16, 12:41 PM
#238
Lexus Fanatic
I think part of it is the desire of younger generations to have a completely transparent automated, online process that does away with any requirement to deal with other people. it's a generational thing that we have looked at in our business too. It's an opportunity to appeal to that preference and also to make more money.
05-24-16, 01:13 PM
#239
Lexus Fanatic
iTrader: (20)
We let them know we are a Lexus Plus dealership and how the new system works with no negotiation. Then, instead of trying to push the customer through our set in place process, we simply ask them "where would you like to start?" Customer wants to get his trade looked at before looking at a new car, we do it. The guys who come in and try to play hardball with us get caught so off guard trying to do the "hide your trade till the end" tactics. They are left without any ammo for objections, and seriously just roll over and take the deal. We are basically killing them with kindness. They want to walk, we let them. They are so confused when you aren't chasing them to the door trying to offer another $500 for their trade. For us, we are so confident on the prices that we can honestly let them walk and not worry about our nearest competition (Kansas City, Des Moines, and Quad Cities) beating our deal.
I think they figured that if the customer just sees one price, what's to say that isn't the sticker price being offered under the guise of "our best price" This puts to rest any argument from the folks who shop on a "I need to see some money off, even if its only $500 off" way of thinking.
Or would you rather spend 2 weeks battling it out with a dealership to get to basically the same price? What is your time worth to you Mr. Consumer?
so you say it's going 'very very well' but does that mean you're selling more vehicles? an overall higher $ volume even with the 'discounts'?
The prices will be surprisingly low now to get people hooked in, if they go nationwide with this though...the discounts won't stay that way.
They can offer deeper discounts in your market because they are rolling back discounts in high volume markets like mine and others.
It has to come from somewhere.
people love lexus because they're refined, super reliable, luxurious, and generally, the dealer service is outstanding. why should the sales process be just like every other car dealer (new or used)? i know you enjoy the 'gladiator match' and 'tricks' to outwit, outlast, outplay the dealers in your area, but i bet 90+% of consumers are like me and absolutely hate it. it's not that i CAN'T play the game just like you, i have to, because the 'system' is such that car sales people (and the consumers, not just pinning it on the sales people who i respect have to make a living in the 'lord of the flies' selling environment in which they must exist) WILL take advantage of me if i don't. but after all but one car transaction in my life, i've come home feeling exhausted, irritated, and "icky" about the whole charade and liar's poker... sure i got a nice car out of it, but every time i shake my head and say, why does this have to suck so bad? again, not picking on car salespeople, they're trying to survive in a system that is competitive, combative, confrontational, not respectful on consumers, and i don't think car dealer's management in any way respects their salespeople who they probably see as a dime a dozen.
I think part of it is the desire of younger generations to have a completely transparent automated, online process that does away with any requirement to deal with other people. it's a generational thing that we have looked at in our business too. It's an opportunity to appeal to that preference and also to make more money.
one day i will order a car on my phone and amazon most likely will deliver it. 
05-24-16, 01:22 PM
#240
^ I have always purchased my car to the best price I can buy it for, but I NEVER EVER discuss what I paid with anybody I know because one thing I know for sure is that the world always likes to make themselves feel better, and in doing so, they will call out the price I paid as "too much", and how they could have haggled another couple grand off of the price I have paid. For those who do not indulge in such pathetic exercise, they don't even ask how much I paid for. They will simply complement the vehicle I got if it is good, otherwise no comments.