By on August 8, 2015

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Taking a page from the old Saturn playbook, Lexus will test no-haggle pricing at a dozen dealerships this year, according to the Detroit Free Press.

The pricing strategy will apply to new and used cars, and service and maintenance at the dealers.

According to Lexus general manager Jeff Bracken, no-haggle pricing could be initially difficult.

“The dealer has to be willing to let the customer walk away or word gets out and the model falls apart,” Bracken told the Detroit Free Press.

Lexus says that it’s adopting the strategy in an effort to differentiate itself from other luxury competition. Luxury automakers such as Cadillac may overhaul their incentive program for dealers to focus on the shopping experience, rather than hard sales goals.

Bracken said the strategy could be expanded to Lexus dealers by 2017.

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76 Comments on “Lexus Will Test No-haggle Pricing at Some of its Dealers...”


  • avatar
    PRNDLOL

    O yeah Lexus, I remember them…. what are they up to these days?

  • avatar
    Master Baiter

    “…what are they up to these days?”

    Making ugly cars. Looks like they hired the design chief from Cadillac.

  • avatar
    RideHeight

    This brand is so lost on me. I can stay Toyota-side and still get the world’s most reliable blow-molded pop can.

    • 0 avatar
      Luke42

      +2

      I’m confident my pair of old Toyotas will outlast the current design language fad at Lexus.

      • 0 avatar
        derekson

        Yeah I don’t get the current styling at Lexus. Their cars looked bland before, but at least they aged well, not unlike Audi or BMW. These current Lexi will look horribly dated in under a decade.

        • 0 avatar
          RideHeight

          Well, everyone is trying to establish brand identity with just the front clip. But some do better than others on the bland/repulsive continuum.

          I generally blame the aero consequences of CAFE for our present diktat that all vehicles follow the bump-on-a-lozenge template of body styles, but any perusal of cars from the ’30s and ’40 shows the same strange dependance on the frontal “signature” for brand ID while the rest of their bodies are completely interchangeable.

          It’s just that today all those bodies are blow-molded pop cans.

  • avatar
    thornmark

    >>“The dealer has to be willing to let the customer walk away or word gets out and the model falls apart,” Bracken told the Detroit Free Press.<<

    Gee, I guess since they PUBLISHED IT, word isn't likely to get out.

    The model will only work if all dealers adhere to it.

  • avatar
    Times58

    Although the idea of one priced selling seems like a sensible option, it very rarely every works out. I had worked for Saturn several years ago and learned a lot through the process. First of all, the only form of negotiation becomes the trade. We would have a much greater than average number of wholesale trades which did not help our retail activity but kept us busy. The Lexus dealerships that choose to participate in this program need to refine their entire process to accommodate the change in mind set and demographic of the one price shopper. With a premium brand, leasing will account for for a large portion of your portfolio. Advertised specials must be significantly subvented in relation to Mercedes-Benz, BMW, Acura, Lincoln, etc.. in order to gain market share. The question of customer loyalty will also be an issue. Why would a first time buyer qualify for the same deal that you would give to a loyal customer? What incentive does the customer have top stay with you? Although the corporate mentality of preserving ever declining gross profit will always prevail in the car business, what makes Lexus entitled to it? I must admit, the Lexus brand is one of the most significant things to happen in my automotive lifetime. Toyota created a brand from scratch that married the appearance of a European luxury car, with the ride and comfort of an American luxury car with the pricing and reliability of a Toyota. They produced a product to meet the wants and needs of the marketplace instead of arrogantly telling people what they should want. Toyota was willing to lose money on the initial LS400 to establish a foothold in the marketplace. This was revolutionary! Unfortunately, this is not 1989! In order to make a dramatic change in the business model of a franchised dealership, you must offer a dramatically different product. Otherwise, the buying public will not accept it!
    The German luxury brands arguably produce the best mainstream premium products at the moment. Lexus has some terrific products as well as some inconsistent ones. If a consumer can choose from several outstanding products at similar price points or up and coming luxury products at more competitive price points, Lexus stands to lose market share and Lexus dealerships stand to lose volume. I am a veteran of the car business who sold many different brands from different dealerships. Although the high line franchises that I represented (Porsche, Audi, Infiniti, Volvo, Lincoln, Hummer) appealed to customers who purchased on the emotion of the product, surprisingly these customers were less loyal and often more easily persuaded on the deal than mainstream buyers. I wish the Lexus salespeople good luck as they will need it!

    • 0 avatar
      VoGo

      Times58,
      Please separate your responses into paragraphs every couple of sentences. You make good points, but readers need you to break it up a bit. Thanks,

    • 0 avatar
      dolorean

      I bought two Saturns, a ’97 SL (yes, I was the one guy) and an ’08 Astra XR 5 dr. I loved both cars. Love the dealerships. Loved the first one’s buying experience not because of the the “no-haggle” balloon-juice, but for the silly fun of watching an overweight salesmen in his Haggar suit take whacks at the plastic body panels with a Louisville Slugger. Not to mention the weird-a** party Saturn threw for you at the time of purchase.

      The second purchase was because I loved my ’99 Opel Astra I had in Germany and couldn’t wait to have one in the states. I did exactly what you said above, haggled the trade-in. The ‘no-haggle’ policy is for the stupid and/or lazy. It’s the GD American way to bargain shop and haggle for a better price. One just has to do a little homework and research to where you’re happy with your purchase.

  • avatar
    SCE to AUX

    Saturn? That extinct company has nothing to do with this.

    What about Scion (you know, part of the Toyota group), and Tesla, with whom Lexus competes?

    Hello?

    • 0 avatar
      Firestorm 500

      According to GM, Saturn never made them any money.

      So much for the no-haggle business model.

      • 0 avatar
        87 Morgan

        You are correct, Saturn never made any money for GM.

        Saturn did however make a lot of money for the dealers who owned the franchise, retailers I believe they were known as.

        Making money for the factory and making money as a dealer are two distinctly different things. The dealer gets one price from the factory, it’s not like they negotiate, individually each one of there 400 units in inventory. The dealer will negotiate the sale of each of every one of them.

        • 0 avatar
          Ihatejalops

          Not true. Dealers pay different prices for cars all the time. Longo Toyota in California does not pay the same invoice cost as other, smaller dealerships.

          • 0 avatar
            Scoutdude

            They do indeed pay the same invoice pricing but they get larger hold backs based on meeting a higher tier of sales. It is against the law for the mfg to give different pricing to dealers but they can legally give bigger rebates to dealers who sell more.

          • 0 avatar

            Holdback is the same too… there are incentives though for selling more units.

      • 0 avatar
        dolorean

        Saturn may not have made GM any “money” but they sure did a lot for their image of quality. Well, up until Saturn went off the orignal plan and went badge swapping to have a Minivan and an SUV with parts and engines from the GM fleet. The original 1.9L Twin-Cam was a phenomenal motor that just ran and ran and I still see some today that thanks to the plastic body panels, still look new even though you know the girl that drives it doesn’t take the time to take care of it.

  • avatar
    TurboX

    I actually love the no-haggle approach of Tesla but the reason I like it is because there are no dealers in the middle and Tesla sells the car for a reasonable price and I know I am not being ripped off.

    If you are going to have the dealers as the middle-man then you either have to restructure pricing with lower built-in margins or no-haggle will not work. There is simply too much profit built in the MSRP today for a no-haggle proposition to work, add it on top that they are rolling it to a few dealers – this it is doomed for failure.

    • 0 avatar
      hreardon

      TurboX –

      It’s just not that simple. If you want to remove the middle man in the form of the dealership and change the model to direct sales then the manufacturer needs to absorb the costs of setting up retail establishments and running them. Manufacturers also rely on the dealership network to help them offload and manage inventory, which would then fall back as a cost on the shoulder of the manufacturers.

      If you want to see major markups, ask about the margin on furniture, jewelry, electronics cables, cocktails and wine at restaurants, etc.

  • avatar
    Pch101

    Americans say that they “don’t want to haggle,” but what they really want is to pay less than the next guy without having to work for it. So when one dealer won’t reduce the price, they go to the next one who will, all while complaining about how terrible it is to haggle.

    • 0 avatar
      Syke

      Comment of the day!!!!!

    • 0 avatar
      stuki

      Not saying this test will work, but in premium space, not paying more than the other guy, is more likely to be good enough, than it is for lower priced cars.

      • 0 avatar
        hreardon

        They have a better chance of this working in the premium space because a larger percentage of buyers will place a higher value on time over absolute lowest dollar cost.

        It works best for someone like Tesla who has a command of market mindshare and a relatively niche product. Same for someone like CarMax, who has a strong brand position right now and people accept their no-haggle system.

    • 0 avatar
      hreardon

      Truer words were never spoken. This is the truth behind the auto retail business.

    • 0 avatar
      slance66

      It’s not about haggling. It’s about getting the car you want at a good price with little time wasted. I can check the price of an iPad at 15 different online and retail shops from my phone, in under 5 minutes. I can check prices for cars, but they are fake, illusory prices. Nobody in 2015 wants to go to a dealer, talk to some guy who whips out a payment sheet and uses a sales playbook from 1982. They want to know what the car costs, really costs, from home, before they every show up. Eliminating sales people altogether would be a step in the right direction. There is a reason Best Buy beat Circuit City, CC had commissioned sales people. Amazon beats Best Buy by having none at all.

      Eventually this will be the only model that survives. Welcome to competition in the digital age.

      • 0 avatar
        Pch101

        What most Americans don’t understand is that the primary determinant of car prices is themselves.

        People can squawk about “supply and demand,” but it’s rare in the automotive world for there to be a supply issue. From the buyer’s standpoint there is almost never a supply constraint to drive up the price.

        Some people will pay more than others. The dealer’s job is to figure out what each person will pay.

        Airlines and hotels don’t give everyone the same rock bottom price because they would go broke if they did. The lower priced buyers are part of the equation, but they aren’t the entire equation. Car dealers are in the same boat, they’re just a lot cheesier about it.

        • 0 avatar
          RideHeight

          So what you’re saying boils down what, “Get good at haggling”?

          It’s like being a prey animal on the savanna; the predators *have* to get some of you so just live with it (maybe)?

          Eff that, it’s the same stress hormones as commission selling. I’d rather stay off the savanna.

          • 0 avatar
            Pch101

            Then don’t haggle and pay more. It’s your choice.

          • 0 avatar
            RideHeight

            OK.

          • 0 avatar
            hreardon

            RideHeight – I’m with Pch on this one: if you don’t feel like you want to deal with the stress, then pay the stick price. It’s what you pay when you walk into the grocery store, the electronics store, the hardware store. For whatever reason, American consumers have decided that it’s okay to haggle over cars, but not over refrigerators and LCD televisions.

            Go buy a house and tell me you’re not going to negotiate the price.

          • 0 avatar
            RideHeight

            hreardon,

            Meh… I’ll leave the souk mentality to the stinky, sun-baked hell holes where they can’t avoid it.

            I’ll pay a little blat to avoid the sleaze and contentiousness of haggling. With cars it happens infrequently enough.

            Isn’t the whole point of material achievement to buy your way out of life’s sewers?

          • 0 avatar
            Pch101

            Americans should haggle over the price of refrigerators. I don’t see why most of them don’t.

          • 0 avatar
            Scoutdude

            You don’t have to haggle to get a good price just join Costco, Sam’s Club or an organization (many credit unions) that gives you access to a buying service. They do the haggling for you and you go into and talk to the fleet/internet manager and they show you the price that was negotiated by the company and pay the price. Relatively quick and simple.

        • 0 avatar
          SCE to AUX

          @Pch101: You’re sounding like the Republican that you aren’t.

          • 0 avatar
            Markcofc

            @dan – I come here for a fun exchange of ideas re: autos, not casual antisemitic remarks.

            Keep your bigotry off this forum.

        • 0 avatar
          baconator

          The airline/hotel analogy is the right one. If Lexus wants no-haggle pricing, they’ll have to drop their MSRPs to something close to the current average transaction price. This will still be above the price level that *some* people are negotiating down to under the current system. It will take some time to figure out what % of those buyers will walk away vs. the % of new buyers that are picked up by the no-haggle system. Will be interesting to see if they stick with the experiment long enough for this system to equilibrate.

          I negotiate for a living and I still hate the dealership haggling experience. There’s a pretty reliable system of behaviors for “winning” with the dealer, but it takes way too much time to play the fish. I’ve probably walked away from three car purchases in the last three years because I didn’t like the price I got on the first round and didn’t care enough to spend six hours of a Saturday haggling it out. It’s silly, and I can imagine it must cause serious anxiety for people who *don’t* negotiate for a living – which is most people.

          • 0 avatar
            Pch101

            It shouldn’t take six hours to negotiate a car deal. That’s the kind of thing that car salesmen say in order to discourage negotiation.

            Dealing with car salesmen should involve a win-lose strategy (you win, they lose) with a willingness to manipulate. Let the dealer feel that it has control over you until it can taste the money, then quietly pull the rug out. Car salesmen are predictable and tend to be in-the-box, and that can be used against them.

      • 0 avatar
        hreardon

        slance66 –

        You can get the car you want at a good price with little time wasted: pay the price listed on the window sticker. Don’t want to haggle – go to CarMax and have them buy your car, then head over to your local XYZ Car Brand dealership and sign papers for MSRP.

        The auto retail business is more akin to residential real estate than it is to consumer electronics, especially when it comes to models with more limited availability.

        For twenty years I’ve been hearing how the digital age will revolutionize car buying. It hasn’t happened with one major exception: significantly easier access to knowledge, which helps to level the playing field by a wide margin.

        The same was said about residential real estate two decade ago: the internet will eliminate the need for agents and consumers will deal directly with one another to complete transactions. Never happened for a long list of reasons, but the internet did provide significantly more information to buyers and sellers to help them make smarter decisions.

        I’ve said this elsewhere: I cannot stand the fact that dealerships have succeeded in holding consumers hostage via the legal system. It’s deplorable and un-American. However, that said, I’m not convinced that consumers would ‘have it better’ if the dealership model as it exists were forced to compete with direct sales. I think it would be nice to have a direct-sales model as an option, but at the end of the day, outside of some premium and niche brands, Joe Consumer is going to prefer the opportunity to try and get a better deal.

        Do I care that Apple slips Best Buy an additional $50 to pocket on iPhones toward the end of a model run to help clear inventory? No. But let’s take an SUV that’s end-of-model year and GM has slapped a $4,000 incentive to the dealer, along with another $100,000 incentive for the dealer to move X number of units during the quarter, plus the difference between invoice and MSRP. Those are some big bucks that I sure as heck would like to negotiate and give me some leverage in the conversation. If convenience of no-haggle is more important than saving $4,000-$6,000 then I say: congrats on your financial security.

        If I were GM, I’d be salivating at the thought of holding onto all of that cash for myself. But wait, I can’t, because I now own the entire retail infrastructure and have to pay for it myself. Further, I now carry all of that inventory on my books. Not good. Plus, I now need to better understand the micro-economics of each market in America and what it wants/needs/can pay. Don’t forget those trade-ins that I now have to manage.

        My point is: this isn’t quite as simple as cutting out the dealership. I don’t think prices would drop, in fact, I think consumers would end up paying more on average. I’m not saying that consumers shouldn’t have the choice to shop this way, just that I don’t think there will be the mass adoption that the internet saviors think it will.

        • 0 avatar
          stuki

          Cutting out restrictions on who can sell what where, disentangling sales from service etc., would pretty much inevitably lead to more efficiency and less room for sleaze. There are still brick and mortar booksellers around, but Amazon has most certainly improved both price and average-Joe access.

          The probability of the optimally efficient size and distribution of car inventory lots just happening to exactly match the relatively arbitrary assignment of franchises, is rather slim, after all.

          • 0 avatar
            hreardon

            Stuki –

            Part of that is because Amazon sells (primarily) that which can be easily shipped across state lines. Not that cars cannot, but for very high value items consumers have a tendency to want to touch and taste before buying.

          • 0 avatar
            stuki

            “..but for very high value items consumers have a tendency to want to touch and taste before buying.”

            The world’s not entirely black and white. Some people want to touch and flip through a book before buying. They still go to a bookstore. As prices for something go up, the proportion of customers that want to touch, likely goes up with it. Resulting in AmazonCars taking less market share from brick and mortars than Amazon books. But using the law to prevent people themselves from working out what the optimal mix is in car space, is still nothing but enforced suboptimality for the benefit of a connected and well lawyered few.

        • 0 avatar
          baconator

          Residential real estate has not changed due to the tireless lobbying efforts of the realtor organizations, and due to cartelization of local realtors to lock low-commission upstarts like Redfin out of bidding for the best properties. It’s been amazing to watch – I’m shocked they have gotten away with it this long.

          The fees that realtors get are massive compared to the limited value they add.

      • 0 avatar
        Silence

        Actually, Best Buy had its best sales numbers when their sales people were on commission. The then CEO heard that he had sales people making $60k a year, so he moved them to hourly wage.

        Well that numbnuts didn’t realize their salespeople were on a fixed % commission. He didn’t understand that the more the salespeople made, the more Best Buy made…duh. Sales dropped immediately.

        • 0 avatar
          CJinSD

          Best Buy wasn’t the only place where management decided it would rather have no business than a business where salespeople made more than junior management in the mid-’90s. Heck, I worked for a place that hired a middle-manager from Best Buy so he could reign in salespeople’s compensation.

      • 0 avatar
        Ihatejalops

        Your ipad is $500. Your car is $75,000. There’s way more going into an item that high versus an appliance that’s under 1K. Very few are paying cash.

      • 0 avatar

        Yet “how much it cost” isn’t a question in any other industry. How much is a fair profit? Do you want all high school kids that don’t know the product selling, or do you want folks who know their product and can actually help steer you though the product? Most folks don’t have much of a clue what they want, and what is available when they come into a retail shop (many of the readers here may not believe this as they don’t fall in the group, but it’s a fact)

      • 0 avatar
        George B

        Exactly! The word for what internet does is disintermediation.

        https://en.wikipedia.org/wiki/Disintermediation

        My last car purchase could have been completed in about 20 minutes if the dealership hadn’t insisted on playing 20th century games. The price negotiation itself is fast when the buyer knows inventory and market pricing and doesn’t have to play “battleship” with low bids and guesses to figure out where the seller needs to be for a win-win deal. I walked in knowing that the Edmunds and KBB average transaction prices were acceptable to me and just had to move the seller in that direction.

    • 0 avatar

      The question is what Europeans do? I cannot imagine Germans haggling. They just take what they think belongs to them. Greeks, Italians may be different like CEO FCA.

      • 0 avatar
        stuki

        Lots of custom ordering in Germany from what I’ve seen. Germans, being of the long term planning kind by nature (or culture), have the patience to wait more than 4 hours between waking up wanting a new car, and having it in their driveway…. Even at the low end of European car buying, like for example Polos, it seems an enormous share of total delivered cars are custom ordered.

        • 0 avatar

          It just might be that Europeans are more passionate about cars than Americans who consider car as an appliance. Internet also give opportunity to customize car but US there are no many choices so ordering something like “Titanium” trim will take care of almost all you can think about. After that you can just add few additional option like self parking. But e.g. only black color interior is available, or only one gas engine is available.

          • 0 avatar
            Pch101

            Tax laws throughout Europe promote leasing.

            Germany comprises about 20% of Europe’s car market. The approach taken in Germany particularly favors the domestic luxury car market. Since the average luxury car driver has a lease and knows when his lease is up, planning ahead is not a problem.

        • 0 avatar
          hreardon

          Stuki –

          Again, regional (or international, in this case) differences. Americans have proven, time and again, that on the aggregate they’re not interested in ordering and waiting. Granted, there will be a segment of the population that is interested in doing that, but case in point, a BMW dealer friend of mine told me that the national statistic is something like less than 2% of all BMWs are custom ordered+Euro Delivery units.

      • 0 avatar
        dolorean

        Germans, well Bavarians (aka, Bayrish) do love their cars. Bavaria is the biggest “state” in the country and the Autobahns and Federal roads are long. The ones I know buy their cars and when they do, they tend to go for all out options because this is a car they will keep until the wheels fall off. The ones that lease, lease the car that would be similar to what one would find in a rental here. Very basic, but nicely appointed. All understand haggling and fully expect that as part of the experience.

        Buying a car is fundamentally different. Showrooms and lots are not like America at all. The cars are out there and you are fully welcome to wander about, kick tires, hop in and feel the real Corinthian Leather, but what you won’t find is some salesmen swooping in on you before your penny-loafers hit pavement. You have to seek one out and actually have this thing called a “conversation” with them.

        I bought an Opel Astra from a small dealership in Parsberg that was going for 2,200 euro. I stood there a while in front of the car, wandered into the showroom which was full of cars but no salespeople or anyone for that matter. I finally met Heinz, chief mechanic and salesman who enthusiastically met me over coffee and for him, a cigarette, and after fifteen minutes of jovial banter, took me on a test drive. Upon being back, talked some more, had another smoke and a pancake, asked if I was hungry, went to the Doner Kabap, haggled the price to 1,700 euro and I’d forgive the lack of winter tires and wheels. Much better system but I can’t say that its this way across the whole of Germany.

        • 0 avatar
          stuki

          That makes sense, even from an American perspective. Chances are, those who consider themselves “keepers” rather than “leasers,” are more willing to wait a bit for their “dream car” even here.

    • 0 avatar
      Big Al From 'Murica

      I maintain Americans want no haggle pricing for everyone else but when they themselves buy they expect a deal.

  • avatar
    nickoo

    This could work brilliantly if Lexus and their dealerships lowered the cost of the sticker by 5%. Just say: See, we’ve lowered the cost and fixed the price to save you time and hassle. Everyone who hates car shopping would be buying lexus.

    • 0 avatar
      Mandalorian

      Exactly. It won’t work without dropping the prices. If they set the no-haggle price at the current sticker, things aren’t going to work out so well. Those Acura, Audi, BMW, Mercedes, and Infiniti stores who are willing to deal will get a whole herd of new customers.

      Getting a deal or the illusion of is paramount to a ton of buyers. Just look at the Nissan Altima for example. How many people turned down an Accord, Camry, Passat, etc to buy an Altima because “It was such a good deal”? I’m guessing just about every one that doesn’t have a little white rental barcode on the window.

      • 0 avatar
        hreardon

        The risk is for the first mover (Lexus): they set a fixed price, customers then take that and compare it to similar products from competitors who are offering discounts. Lexus loses.

        Same situation with dealerships who have tried to implement no-haggle pricing. Every dealer I know who has tried it have had the experiment last a short period of time because they set their price, the customer then takes that number to a competitor who simply beats it. It just doesn’t work in the car business.

        The only way around this it to disallow discounting, which you cannot do. Then you’re guaranteed that everyone will pay the same price and everyone loses.

  • avatar
    Firestorm 500

    For most, the only thing that matters is THE DEAL.

    Or the perception thereof.

    There really is very little “customer loyalty” any more.

    • 0 avatar
      hreardon

      Yep. Everyone needs to feel like they got ‘a deal’, and that differs from individual. For some, ‘a deal’ is getting in and out quickly; For others, paying ‘less than the last guy’, for yet others it’s getting the floor mats tossed in for free.

      Humans. We’re all different.

  • avatar
    Prado

    I will never buy a car from a no haggle / one price dealer. A few reasons why:
    – It is a complete charade as long as dealers can negotiate trade in values, pad/discount APRs, and add $400 doc fees and other overpriced dealer add-oms. Since I sell my own cars and provide the funds/funding myself, I would most likely end up paying more than someone who got their trade in value padded.
    – Different markets have different cost structures, where the savings can typically be passed on to the consumer. Why should a ‘low cost market’ customers have to subsidize markets like Manhattan. Conversely the dealers in these high cost markets might not be making enough on these no-haggle deals to cover their high overhead.
    – Unless you are going to change the price every week, No-haggle is too inflexible for a constantly changing market. How exactly does Lexus plan on dealing with models that have excessive inventory, or how will they price products for model year change overs? No-haggle supposedly means transparent price to the customer. Will they be ok with a customer who is bringing their car in for an oil change to see that the price of the car they bought 6 months ago is now less? If I am buying at year end, or a car that has been sitting on the lot forever, I expect to pay less.
    – No haggle has failed at Scion. Volume is pathetic. Pricing flexibility would help.

    • 0 avatar
      RideHeight

      I don’t think Scion is the test case from which I’d judge. It’s not exactly as if they’ve been a full-spectrum brand or one of unique quality in what few segments they offer.

    • 0 avatar
      SCE to AUX

      Scion is dying because of its stale products.

      Saturn died because its products weren’t that good.

      Tesla’s no-haggle policy doesn’t seem to be holding them back.

    • 0 avatar
      Scoutdude

      Nothing changes with respect to having cars that have sat on the lot too long or are from the outgoing/previous model year. They will still have specials including loss leaders, some of which will be out of the dealer’s pocket and some borne by Toyota, just like today.

      Different markets will adjust things by giving you the “joe’s dealership discount” or an ADP, AMV, marketing/advertising cost second sticker.

      As far as your trade in goes that won’t change either.

  • avatar
    Jeff S

    My experience with a Lexus dealer was they would offer $500 for my trade-in and MSRP for the new Lexus. The pre owned certified Lexus which was 2 years old was $1,500 less than the new one. My wife and I walked and bought a new CRV which Honda offered $3,500 for the trade and some extras thrown in–not a great deal but better than Lexus. Lexus already has close to one price so this is not any different than what I was offered.

  • avatar

    Not a big deal in age of Internet. You ask Internet sales manager price and it is pretty much – you take it or leave it. Or go through Truecar or Costco – the same thing with even less hassle but small premium.

  • avatar
    Jeff S

    Toyota is suffering from what the old GM suffered from in having brands that are too similar. Toyota needs to kill Scion and concentrate on Toyota. Keep Lexus and cut the price by about 5% with the no haggle on price except allow the dealers more latitude on negotiating on trade-ins. Toyota has also cheapened the interiors of many of their vehicles with more hard plastics which is similar to GM especially the past GM.

    • 0 avatar
      stuki

      For this to work properly, I suspect trade inns would have to be made more predictable as well. Say, Carmax + $100 * number of prior Lexi owned in loyalty bonus. The whole point is alleviating the fear many in the premium bracket have of “having been taken advantage of.” Or, “appearing to be an easy mark.”

      In addition, Lexus would have to ensure their product is sufficiently distinct, to prevent too obvious a cross comparison with competitors. Doing what BMW does, just slightly worse and with less consistency in styling, probably won’t cut it.

      • 0 avatar
        hreardon

        Stuki –

        We’re back to regional variation as well as seasonality, fuel prices, etc. As an example – while you can request a 4×2 Jeep Grand Cherokee, you won’t find a single dealer in the upper midwest or New England who stocks one simply because they know that in that market everyone (save that one oddball request) wants a 4×4 model. When you go to trade said 4×2 JGC you’ll get a lot more for it south of the Mason-Dixon than you will to the north. You’ll also get a lot less for it in a small town in the middle of the mountains than you would in south Florida. Price of fuel goes up, relative value goes down. Market gets flooded with a surge of lease returns, value goes down.

        Predictability is hard, like in real estate. All you can do is set your number, see who bites, and if nobody does, you lower your price until someone does. Conversely, when buying, you offer low and if nobody accepts, you either leave the market or increase your offer.

        People over complicate the car buying business and while dealers have done themselves no favors over the years, I have never once had a bad car buying experience when I’ve walked in with reasonable expectations and plenty of homework. You wouldn’t buy a $300,000 house without some serious homework, why buy a $30,000 without similar effort?

    • 0 avatar
      Scoutdude

      The dealers have full latitude on what they offer for trade in’s now, that is not set by the mfg. Yes they use price guides when making offers particularly when it isn’t something that would normally keep on the lot but those price guides are published by 3rd parties.

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