Lexus Will Test No-haggle Pricing at Some of Its Dealers

Aaron Cole
by Aaron Cole

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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  • Prado Prado on Aug 08, 2015

    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.

    • See 3 previous
    • Scoutdude Scoutdude on Aug 09, 2015

      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.

  • Jeff S Jeff S on Aug 08, 2015

    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.

  • Inside Looking Out Inside Looking Out on Aug 08, 2015

    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.

  • Jeff S Jeff S on Aug 09, 2015

    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.

    • See 2 previous
    • Scoutdude Scoutdude on Aug 09, 2015

      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.