Interesting...Toyota's Lexus Testing Haggle-Free Sales at 12 U.S. Stores
05-25-16, 08:57 AM
#271
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.
The difference for us is that we're in the NY City metro area. If your customer doesn't like your price is he/she likely to drive hundreds of miles to save a few bucks or shop it?
Doubtful.
Meanwhile within a, say, 30 minute drive I have 9 other Lexus stores.
05-25-16, 12:33 PM
#272
No-dicker pricing is not necessarily a way of getting higher selling prices....or more profit. It depends on how the vehicles are priced to start with. Take Saturn, for instance...arguably the most well-known example. One reason why Saturn was so successful in the 1990s (along with their clever vehicle innovations, of course), was that even paying full-list for their vehicles, their S-series were moderately-priced to start with, and competed well with the average transition prices for the Corolla and Civic (back then their closet competitors), along with some domestics like the Ford Escort and Plymouth Sundance. Customers knew they were getting a good deal at Saturn even paying full-list, and, of course, benefitted from the unique customer perks that Saturn was known for. Saturn, of course, eventually folded, but it was not because of pricing....it was because the company, after 2000, was horribly mismanaged and tried to become like the rest of GM at that time.....which it clearly wasn't.
05-25-16, 12:35 PM
#273
This is pretty much what I figured.
The difference for us is that we're in the NY City metro area. If your customer doesn't like your price is he/she likely to drive hundreds of miles to save a few bucks or shop it?
Doubtful.
Meanwhile within a, say, 30 minute drive I have 9 other Lexus stores.
The difference for us is that we're in the NY City metro area. If your customer doesn't like your price is he/she likely to drive hundreds of miles to save a few bucks or shop it?
Doubtful.
Meanwhile within a, say, 30 minute drive I have 9 other Lexus stores.
05-25-16, 03:58 PM
#274
I think I remember that on a $58,130 MSRP car that they wouldn't do better than $57,000. I seem to recall selling him the same car for $48,500 plus $750 to ship it out there.
05-25-16, 05:24 PM
#275
Lexus Fanatic
Not exactly, for instance some models like the RCF for the 15 year were not moving according to initial outlook. However in effort to push them through, the incentive loads on this model were heavy. So does this model which is one price for all, keep business as usual, were if a model does not sell well, just keep on bumping the Lexus + Price down or would their be a bottom floor?
And GM is not the only guilty party at that by any means. If you are old enough (or enough of a car enthusiast) to remember the expensive, Japanese high-performance sports cars of the 1990s....the Toyota Supra, Mazda RX-7, Mitsubishi 3000 GT VR-4, Dodge Stealth (a redone 3000 GT), and Nissan 300ZX........all of those models became very slow-sellers by the mid/late 90s because of high prices and high insurance premiums. But, rather than simply de-content the cars a little to lower the price (which I suggested to the manufacturers several times), or offer factory incentives, all of those manufacturers stubbornly hung on to the high price, and then, when they would no longer sell at that price, simply pulled those vehicles out of the American market. Later, Mazda and Nissan relented somewhat and re-introduced all-new RX-8 and 350Z models at (relative) lower prices.
Last edited by mmarshall; 05-25-16 at 05:29 PM.
05-25-16, 05:47 PM
#276
Lexus Fanatic
Originally Posted by mmarshall
Yes, I agree, that's true to some extent. I wasn't implying, in my post, that manufacturers never resort to incentives to move slow-selling vehicles....they obviously (sometimes) do. But my point was that..... (and GM is notorious for this)......too often, it is the vehicle itself that suffers, when manufacturers simply yank it instead of actually providing incentives.
05-26-16, 06:30 AM
#277
Lexus Fanatic
If they have to incentivize the vehicle to the point where it isn't profitable, it's gone and should be gone.
05-26-16, 10:10 AM
#278
I guess I should have clarified - no more salesy saleman - rather few more of those who know how to handle finance. In other words, the finance guys from the backroom will now become the salesmen, as there are no price tricks to be played, no sleaze ball tactics to this discount, cashback, trunk money, free oil changes, special ext pwrtrn wty, etc.
05-26-16, 10:33 AM
#279
Lexus Champion
I guess I should have clarified - no more salesy saleman - rather few more of those who know how to handle finance. In other words, the finance guys from the backroom will now become the salesmen, as there are no price tricks to be played, no sleaze ball tactics to this discount, cashback, trunk money, free oil changes, special ext pwrtrn wty, etc.
The sales people are becoming friendly, product advisors (some even given that title) who try to explain and demonstrate the features of the vehicle. The finance people, however, try to sell and upsell everything, from dealer add-on accessories and options to convenience packages to after-market warranties, and constantly adding numbers to the sales agreement while doing it.
If and when the no-haggle, one-price, friendly sales policy comes into effect, and I can deal with only one product / sales advisor who also completes the transparent sales agreement, then I am all for it. Bring it on! A car is a mass-produced commodity item, after all, like clothing, computers, etc.; it should be sold like one, not sold by snake-oil salesmen.
05-26-16, 12:41 PM
#280
Lexus Fanatic
iTrader: (20)
If and when the no-haggle, one-price, friendly sales policy comes into effect, and I can deal with only one product / sales advisor who also completes the transparent sales agreement, then I am all for it. Bring it on! A car is a mass-produced commodity item, after all, like clothing, computers, etc.; it should be sold like one, not sold by snake-oil salesmen.
some people like wrestling alligators too, but not me. 
05-26-16, 01:01 PM
#281
Lead Lap
Funny you say that. I have observed here that new car salesman are becoming less pushy -- less salesy as you say -- while the backroom finance guys (don't remember ever seeing a woman in the finance office) become the pushy salesman.
The sales people are becoming friendly, product advisors (some even given that title) who try to explain and demonstrate the features of the vehicle. The finance people, however, try to sell and upsell everything, from dealer add-on accessories and options to convenience packages to after-market warranties, and constantly adding numbers to the sales agreement while doing it.
If and when the no-haggle, one-price, friendly sales policy comes into effect, and I can deal with only one product / sales advisor who also completes the transparent sales agreement, then I am all for it. Bring it on! A car is a mass-produced commodity item, after all, like clothing, computers, etc.; it should be sold like one, not sold by snake-oil salesmen.
The sales people are becoming friendly, product advisors (some even given that title) who try to explain and demonstrate the features of the vehicle. The finance people, however, try to sell and upsell everything, from dealer add-on accessories and options to convenience packages to after-market warranties, and constantly adding numbers to the sales agreement while doing it.
If and when the no-haggle, one-price, friendly sales policy comes into effect, and I can deal with only one product / sales advisor who also completes the transparent sales agreement, then I am all for it. Bring it on! A car is a mass-produced commodity item, after all, like clothing, computers, etc.; it should be sold like one, not sold by snake-oil salesmen.
05-26-16, 01:14 PM
#282
Lexus Champion
Don't you live in Florida? We Canadians thought that all Floridians love to wrestle alligators. 
If the price for each vehicle is the same across all dealerships, as the price for a particular computer is the same at all Best Buy stores, for example, there will be no worry about padding the numbers. Until that happens, the listing of the MSRP, established discount and final, no-haggling price, will suffice.
And having the salesperson fill out the sales agreement together with the buyer will help in keeping everyone honest.
And having the salesperson fill out the sales agreement together with the buyer will help in keeping everyone honest.
05-26-16, 01:18 PM
#283
Lexus Fanatic
05-26-16, 04:16 PM
#285
Lexus Test Driver
