If EVERY dealer went to this, the fixed price would have to adjust frequently, across the board, to reflect what the vehicle is worth compared to similar vehicles by other manufacturers. Would you pay $5000 more for a Lexus if you could get a similar Acura for $5000 less? Most would not. Sales would dry up and big brother who sets the price would have to adjust it downward.

But until that happens, if ever, there will be this two-tiered market that eventually will crack. The higher fixed price dealers will shrivel in volume as the price-cutters take their sales.

As a practical matter, car dealers are competitive. Sooner or later someone somewhere will start undercutting even the fixed price. This is a lot like OPEC...when supply is tight they can rule the roost but when things normalize there will be cheaters to maintain market share.

 

i decided to google lexusplus, and there was one reference to it in socal, orange county mission viejo lexus dealer, but the webpage seems to have been removed.

I guess they decided to end the plus program prematurely, since this program would never survive in socal, with all the competition.

 

It looks like there are only about 10 LP dealers spread around the country. Not too many.

 

That's going to grow, but just how fast and how widespread remains to be seen.

 

daryll40, so the Lexus Plus dealer you worked with did eventually cave in on their pricing to accept your offer?

Systems like this can and could work, Lexus just needs to take actually the time to develop and set competitive pricing levels within each metro area that they're trying to establish. This often needs transparency to consumers regarding average transaction prices in the area, etc. In this case, it seems like whatever what used to establish the Lexus Plus price was just extremely out of whack with the local market.

 

I think the key to this is if all Lexus dealerships did it.

Hypothetically of Dealer A was a Lexus Plus dealer and quoted $44,000 for a vehicle, Dealer B (Lexus dealer but not Plus) would just need to quote $43,998 to get all the biz. Lexus needs to make this policy a uniform practice across all dealers or none. Having some of them do it is hard to justify because you pit Lexus dealers vs Lexus Plus dealers. Either way consumers can win but creates an inconsistent brand experience.

Sonic Auto dealerships are rolling out a unified experience where the sales rep you work with, working off already-no-haggle-prices, becomes the only face you deal with throughout the entire transaction (including F&I, warranties, etc.). Sonic claims this increases customer experience, reduces a lot of overhead (i.e. not needing to hire a bunch of finance managers or pay sales managers an overhead fee) and reduces the time spent per sale (for both the sales team and customers) creating a win win case. This is accelerated by the use of a tablet and a Sonic-specific app. I don't work for Sonic but I find this option very appealing as a seamless buying experience.

So eventually I do see some dealerships getting there, and Lexus is a "step ahead" in converting whole dealerships to this; there just needs to be uniformity.

 

But the fact of the matter is, if all Lexus dealers did this, those of us that invest the time and energy in negotiating the best price will wind up paying more.

 

This or those buyers can just go to Infiniti, Acura etc who are more than happy to negotiate.

In NYC, leasing companies also are a great option for people that dont want to negotiate.
They usually sell at invoice minus all rebates....they work with dealers that need to drive volume and willing to sacrifice % of profit.

 

Good luck with the whole one price pricing scheme. Lexus can try, but I hope theyre ready to loose a lot of ground to every other mfg out there who is willing to work on price. Especially with the amount of competition out there for damaged brands attempting to either remerge or even new brands trying to make it to the big leagues.

As I have said in the other thread about L+ pricing, its all about the business optimizing the process to make more $$, which is not bad for the business, but bad for the customer.

 

But Sonic's "one price" is also open to negotiation, that's what the sales people at the dealers here in Southern California told me at multiple Sonic dealerships I've visited, which completely ruins that facade as well. Yes, many dealers are moving to the "no back office hand off" process, but the pricing and negotiation can often still leave much to be desired to the under/uniformed consumer out there.

 

If Lexus forces all dealerships to go one pricing, dealers will finally decide to flip the bird to basically all customers and welcome to what both negotiators and non negotiators have all feared; getting the worst price ever. Yes, proponents will argue well its a better experience, and I dont doubt that at all, with profit margins no longer dictated based on monthly quotas, salesman will be happy to offer you a vehicle as long as your willing to pay the marked value price. The best part, who decides this magical market value price...the same people who will collect the commission check sitting right in front of you after you drive off. So if everyone selling you access to your new vehicle have the control on what you pay, then what motivation if any do they have to make the market value price anything less then sticker....And please dont say Lexus's Pilot Program is an indicator of where they will go with pricing, since its a study with a few dealerships who have had to sacrifice there pricing potential to allow Lexus, the mfg with inside trade data from this Pilot Program Sales and experiences. No way in hell, will Lexus say lets offer the same terms and agreement conditions if the entire USDM decides to agree to this one.

but hey, having one person handle my entire sales experience is something great if I overpay right???

 

And as I have always said...if somebody truly doesn't care about having the best price, there is no haggle pricing available now...its called MSRP. If you walk into any Lexus dealer and buy something for MSRP or whatever is marked on the vehicle, you'll have a great experience.

 

Nope, proponents argue MSRP or manufacturer's suggested retail price, which the manufacturer sets based on market conditions/costs (which include dealership handling costs) is different from the Market Adjusted Rate which L+ will be using, and set by surprise: the mfg and its cost to bring the product to its new owner (including dealership handling costs).

So you see here, TWO DIFFERENT things here.

 

Yup, clearly totally different!

 

I agree. Two totally different things.

I think most people deep down want an easy going no haggle price. But the problem is that most people also want the lowest possible price they can possibly afford. Most people will gladly screw over a dealer and their workers if they can. At the end of the day, bargaining is gonna be here to stay.