Lexus expanding the "no haggle" programs
05-19-17, 09:22 PM
#76
Lexus Fanatic
iTrader: (20)
To those that love to haggle, they're 'pleased' knowing they got a deal better than most other people, so they feel their haggling was 'worth it'.
with margins on cars, some end up paying too much, and others end up haggling the deal down to the minimum the dealer will accept, which of course varies by dealer, time of month, year, how things are going, inventory levels, etc. if the spread between 'paid too much' and 'bare minimum' is say 10% of the price, then if a no haggle price were 5% under msrp (assuming symmetrical distribution) the dealer might make the same revenue, assuming they gained as many sales as they lost to people who couldn't stand not haggling. However, they might do more sales because a) the transactions ought to be completed a lot more quickly, and b) i submit there's way more people who would love to not to feel they have to haggle, vs those who expect to and enjoy it even.
so i don't see an obvious answer to all this. I for one HATE the song and dance at the dealer and knowing i have to haggle, because they by default want to make more margin for a commodity than is reasonable.
with margins on cars, some end up paying too much, and others end up haggling the deal down to the minimum the dealer will accept, which of course varies by dealer, time of month, year, how things are going, inventory levels, etc. if the spread between 'paid too much' and 'bare minimum' is say 10% of the price, then if a no haggle price were 5% under msrp (assuming symmetrical distribution) the dealer might make the same revenue, assuming they gained as many sales as they lost to people who couldn't stand not haggling. However, they might do more sales because a) the transactions ought to be completed a lot more quickly, and b) i submit there's way more people who would love to not to feel they have to haggle, vs those who expect to and enjoy it even.
so i don't see an obvious answer to all this. I for one HATE the song and dance at the dealer and knowing i have to haggle, because they by default want to make more margin for a commodity than is reasonable.
05-19-17, 09:22 PM
#77
Lexus Test Driver
And IMO, new and younger car buyers are what is fueling the shift in buyer dynamic anyway. As it has with many other systems, technology is what has influenced change here. Car forums like this provide much more insight into how car dealers operate, and car buying websites and agencies now provide up-to-date information on what prices certain models are selling for in their geographic areas. I read an article once that interviewed a dealer manager (IIRC Cadillac) complaining about how the transparency gained from car info websites was severely cutting into margins. Once again, this is how dealerships operate. They want things to be as opaque as possible so that consumers cannot understand the relationship between prices and costs so that they can fool the customers into thinking they get a "deal". Technology is what's influencing the shift because dealers can't as effectively manipulate buyer emotions like they did in the past, and I think it's going to influence dealers to be more receptive of no-haggle sales systems.
I think the biggest takeaway from the pilot program so far is that (at least at one dealership) sales increased while margins stayed the same.
05-19-17, 09:30 PM
#78
Lexus Test Driver
And yes, I think it's quite clear from Lexus exec statements and various other sources that Lexus believes they will gain far more customers with a no-haggle system than they will lose.
05-19-17, 09:37 PM
#79
Lexus Fanatic
And IMO, new and younger car buyers are what is fueling the shift in buyer dynamic anyway. As it has with many other systems, technology is what has influenced change here. Car forums like this provide much more insight into how car dealers operate, and car buying websites and agencies now provide up-to-date information on what prices certain models are selling for in their geographic areas. I read an article once that interviewed a dealer manager (IIRC Cadillac) complaining about how the transparency gained from car info websites was severely cutting into margins. Once again, this is how dealerships operate. They want things to be as opaque as possible so that consumers cannot understand the relationship between prices and costs so that they can fool the customers into thinking they get a "deal". Technology is what's influencing the shift because dealers can't as effectively manipulate buyer emotions like they did in the past, and I think it's going to influence dealers to be more receptive of no-haggle sales systems.
So, if one wants that nice new car at the absolute lowest price (yes, even by excessive haggling), then be prepared to (maybe) give something up for it. The world is not always a free lunch.
05-19-17, 09:46 PM
#80
Lexus Test Driver
The obvious flip-side of that, though, is that, if dealers DON'T make adequate margins, they won't have the funds to provide all of the perks and programs that their customers want.....coffee/latte machines, play areas for the kiddies, Internet access, car-washes, etc.....
05-19-17, 09:55 PM
#81
Lexus Fanatic
I don't "love" to haggle, just want to know that I'm not being taken advantage of, and that I'm getting a good deal.
05-19-17, 10:00 PM
#82
Pole Position
Lexus.com can point you to only 10 dealers who operate Lexus plus (https://www.lexus.com/lexusplus/), and one of those, in Bellvue WA so an affluent area with competition, has an RX with broadly the same spec as my wife's car.
They want $55,744 as their Lexus Plus upfront price on an RX which has an MSRP of $58,319.
I paid $50,400 for my wife's car, which had an MSRP of around $57,500. For now, I'm sticking with my own methods
They want $55,744 as their Lexus Plus upfront price on an RX which has an MSRP of $58,319.
I paid $50,400 for my wife's car, which had an MSRP of around $57,500. For now, I'm sticking with my own methods
05-19-17, 10:21 PM
#83
Lexus Test Driver
Lexus.com can point you to only 10 dealers who operate Lexus plus (https://www.lexus.com/lexusplus/), and one of those, in Bellvue WA so an affluent area with competition, has an RX with broadly the same spec as my wife's car.
They want $55,744 as their Lexus Plus upfront price on an RX which has an MSRP of $58,319.
I paid $50,400 for my wife's car, which had an MSRP of around $57,500. For now, I'm sticking with my own methods
They want $55,744 as their Lexus Plus upfront price on an RX which has an MSRP of $58,319.
I paid $50,400 for my wife's car, which had an MSRP of around $57,500. For now, I'm sticking with my own methods
What's interesting is that Lexus of Bellevue is owned by O'Brien Automotive Group, which also owns Lexus of Tacoma down the road - but is not in the Lexus Plus program. The only competing dealer in the area - Lexus of Seattle - is owned by Kuni, which also owns Lexus of Greenwood Village (Colorado) which is in the Lexus Plus program.
In any case, the question being posed in this thread is what the system will be like when Lexus switches completely to a no-haggle system. Lexus Plus is not that system, as it is intended (and even marketed) specifically to co-exist with competing Lexus dealerships that haggle.
05-20-17, 05:35 AM
#84
Lexus Fanatic
Something tells me that this can't be true. The invoice for the RX is not that low off $57.5K Did you have a trade?
Last edited by Toys4RJill; 05-20-17 at 06:21 AM.
05-20-17, 06:07 AM
#85
Lexus Fanatic
Originally Posted by LexsCTJill
Something tells me that is can't be true. The invoice for the RX is not that low off $57.5K Did you have a trade?
How do you think it's possible to get 20% off of an LS460 right now? Invoice isn't 20% off.
05-20-17, 06:51 AM
#86
Lexus Fanatic
Well, we already know from the pilot program that such is not the case for many people - and I'd think that even if distrust cannot be cured for some people, then offering a system wherein new car buyers never have to be exposed to a distrustful system is the next best solution.
And IMO, new and younger car buyers are what is fueling the shift in buyer dynamic anyway. As it has with many other systems, technology is what has influenced change here. Car forums like this provide much more insight into how car dealers operate, and car buying websites and agencies now provide up-to-date information on what prices certain models are selling for in their geographic areas. I read an article once that interviewed a dealer manager (IIRC Cadillac) complaining about how the transparency gained from car info websites was severely cutting into margins. Once again, this is how dealerships operate. They want things to be as opaque as possible so that consumers cannot understand the relationship between prices and costs so that they can fool the customers into thinking they get a "deal". Technology is what's influencing the shift because dealers can't as effectively manipulate buyer emotions like they did in the past, and I think it's going to influence dealers to be more receptive of no-haggle sales systems.
I think the biggest takeaway from the pilot program so far is that (at least at one dealership) sales increased while margins stayed the same.
And IMO, new and younger car buyers are what is fueling the shift in buyer dynamic anyway. As it has with many other systems, technology is what has influenced change here. Car forums like this provide much more insight into how car dealers operate, and car buying websites and agencies now provide up-to-date information on what prices certain models are selling for in their geographic areas. I read an article once that interviewed a dealer manager (IIRC Cadillac) complaining about how the transparency gained from car info websites was severely cutting into margins. Once again, this is how dealerships operate. They want things to be as opaque as possible so that consumers cannot understand the relationship between prices and costs so that they can fool the customers into thinking they get a "deal". Technology is what's influencing the shift because dealers can't as effectively manipulate buyer emotions like they did in the past, and I think it's going to influence dealers to be more receptive of no-haggle sales systems.
I think the biggest takeaway from the pilot program so far is that (at least at one dealership) sales increased while margins stayed the same.
05-20-17, 07:48 AM
#87
Lexus Fanatic
05-20-17, 08:14 AM
#88
Lexus Fanatic
Local dealers are not going to give away a RX SUV for $5000 less than a no haggle delaer who is giving it for $5000 more. This is just rediculous and stupid on both dealers.
I am sorry, but I simply do not believe a Lexus delaer is willing to give $7000 off the MSRP of a new Lexus RX. Prove to me otherwise and I will believe it.
I am sorry, but I simply do not believe a Lexus delaer is willing to give $7000 off the MSRP of a new Lexus RX. Prove to me otherwise and I will believe it.
05-20-17, 08:25 AM
#89
Lexus Fanatic
Originally Posted by mmarshall
Probably because of SUV sales. Dealerships are trying to get rid of sedans that just aren't selling.
And yes I can buy an RX for $5k off MSRP with zero effort. Literally one phone call. $7,000 with effort I believe if there's a rebate, which is very common on these vehicles. Whether you believe that or not Jill is meaningless lol. The RX is not hot, they sell well but they are incentivized, and dealers have plenty of stock. It's not a Range Rover.
Why do we care if it's "stupid" for the dealer? The dealer is your adversary.
Last edited by SW17LS; 05-20-17 at 08:38 AM.
05-20-17, 09:16 AM
#90
Lead Lap
But they don't do it now! We know that because not every car at dealers comes full of dealer options. As I mentioned, only the three GS-F had undergone the full dealer option BS treatment. No other car I looked at in the showroom had all those dealer options added. Some had absolutely none, and most that did only had the rear bumper applique.
Even today, typically the dealer will try to get you to add the window tint, clear bra, platinum warranties, wheel/tire warranties, etc. after the customer decides to buy the car. They don't normally lump these things in just to inflate the sticker and increase room for negotiation.
Even today, typically the dealer will try to get you to add the window tint, clear bra, platinum warranties, wheel/tire warranties, etc. after the customer decides to buy the car. They don't normally lump these things in just to inflate the sticker and increase room for negotiation.
Right, I misspoke as did one person that was quoted in one of the LexusPlus articles I read did as well.