By on May 23, 2017

JM Lexus Margate Florida - Image: Lexus.com

Half an hour from Fort Lauderdale, in Margate, Florida, sits JM Lexus, the highest-volume Lexus dealership in the United States.

Even by Lexus standards, where throughput is the best of any premium automaker operating in America, JM Lexus’ 8,000-unit new vehicle sales tally in 2016 was striking. That’s more than 150 new luxury cars, crossovers, and SUVs sold each week. That’s roughly six times the volume achieved by the typical Lexus dealer.

And JM Lexus, perennially the top Lexus dealer in America, does so as part of the Lexus Plus strategy: no negotiating, a single representative per customer, fixed prices for new and used cars as well as service fees and accessories.

Perhaps there’s a lesson to be learned by Lexus’ other dealers. For the time being, according to Automotive News, only 5 percent of Toyota’s premium brand stores operate under the Lexus Plus model.

For car dealers, adopting a fixed-price model is no mere alteration of the status quo but rather a wholehearted transformation. The upsides are significant: more satisfied employees, happier customers, and greater profit. Satisfied employees don’t leave in search of greener grass on the other side of the fence. Happy customers return for their next vehicle. Greater profits can be reinvested back into the dealer, creating an even better space for employees to work and for customers to buy. A better space in which employees work and customers buy consequently makes for more satisfied employees and happier customers, and so the cycle continues.

But just as the upsides are significant, the downsides are well known. “If you’ve got personnel that are used to doing business very traditionally, they may not fit into the Lexus Plus process,” Lexus’ Greg Kitzens, general manager responsible for future initiatives, told Automotive News.

Indeed, personnel accompanied to a competitive environment won’t be pleased when customers negotiate a better deal on an RX350 at the Lexus dealer one town down the highway. The same group of existing employees, potentially older employees, would also need to be trained in areas such as F&I, areas in which they’ve never worked. In search of a more satisfied staff, dealers making this major transition might just discover a particularly unsatisfying metamorphosis.

Lexus RC in Jim Pattison Lexus showroom - Image: Lexus Canada

Switching to Lexus Plus “was major disruption to our business,” says Peter Cooper of Allentown, Pennsylvania’s Lexus Of Lehigh Valley. “It took everything we learned over the last 35 years as a dealership group and threw it out the window.”

For JM Lexus in Margate, Florida, adopting the Lexus Plus strategy served to bring factory support to an approach that was already in place. JM Lexus was already the top Lexus dealer in America thanks to success the store enjoyed with a similar strategy prior to Lexus Plus.

“It’s a toll on our customers, but mostly on our associates,” JM Lexus general manager Jim Dunn says of selling 150 new vehicles per week. “We really want this dealership to reflect a culture that’s caring, that’s sensitive to what our associates need and what our buyers today are really demanding.”

That’s a toll many other Lexus dealers would be happy to pay. Regardless of whether JM’s fellow Lexus stores adopt the Lexus Plus strategy soon, it’s likely they will eventually end up with the same format.

“[Lexus] always play the long game,” NADA consultant Mark Rogers says.

According to Lexus HQ’s Kitzens, this is no experiment. “It’s one of these things where you’ve really got to burn the ship,” he says. If, after the ship is burnt, more Lexus dealers reap the kinds of benefits enjoyed by Florida’s JM Lexus, the gain will have been worth the pain.

For the time being, Lexus is looking back on seven consecutive months of U.S. sales decline; on 13 year-over-year sales decreases in the last 14 months. If boom times made blowing up the traditional sales model difficult, perhaps lean times will present Lexus Plus with some more early adopters.

Timothy Cain is the founder of GoodCarBadCar.net and a contributing analyst at The Truth About Cars and Autofocus.ca. Follow on Twitter @timcaincars.

Get the latest TTAC e-Newsletter!

45 Comments on “Dealer Lesson: JM Lexus, the Most Successful Lexus Dealer In America, Is a No-Dicker-Sticker Store...”


  • avatar
    Oberkanone

    NOTHING to do with the wealth of the population within 100 miles of the store.

  • avatar
    28-Cars-Later

    Wait, that sounds like the Saturn strategy.

    Did Roger Smith channel this Lexus policy through a seance?

  • avatar
    Felix Hoenikker

    Saturn redux?

    • 0 avatar
      Kenn

      I had the unfortunate experience of owning 2 late-’90s Saturns while living in SoCal. I found that the quality of the product in no way could compare with a Honda or Toyota (not to mention, Lexus). And my experiences with Saturn service consistently proved to be very unlike what the PR hoopla would have had you believe. In total, a memorably-unpleasant adventure. This is not “Saturn redux.”

  • avatar
    PrincipalDan

    Quick Google search: Well their Facebook and Cars.com ratings are very high.

    Checking their website they list the MSRP and then for the price it says: “CONTACT US!”

    Sorry no.

  • avatar
    jh26036

    I want to know from the 8,000 vehicles they sold, how many of the buyers were over the age of 60.

    • 0 avatar
      2manycars

      Probably a lot of them. That’s the age group that counts. After all, most kiddies are not going to be buying a Lexus. Nobody really cares what young people think anyway.

  • avatar
    threeer

    I guess this also depends largely on the socio-economic status of the customer base. Maybe the buyers are affluent enough where dickering and negotiating just aren’t a high priority.

    • 0 avatar
      dukeisduke

      That’s not the case with every wealthy person; some are notoriously frugal. I can think of Sam Walton, and Warren Buffet.

      • 0 avatar
        fvfvsix

        People often conflate frugality with the propensity to negotiate. They are not the same. It wouldn’t be worth Warren Buffet’s time to negotiate heavily on stuff like this. The frugality comes in the decision to buy or not.

  • avatar
    slavuta

    I went to their site, tried to check out the price. But this is all “contact us” prices. Interesting, because just month ago I helped my in-law to buy Lexus and we took $4K off, which was $1K lower than carsdirect and truecar listed.

    • 0 avatar
      jh26036

      Truecar is so worthless these days.

      My friend wanted a new XC90. Truecar listed it at maybe $4k off with specific options. Actual owners on forums said 10% off MSRP is possible. Friend went in with 10% off MSRP offer, after 30 minutes, settled at 9.5% which equates to something like $7k. I told him if you showed the dealer your back, you would probably get another few hundred but he’s not interested in making another drive back to the dealer.

  • avatar
    S2k Chris

    When I bought my Acura RDX it was at a no-dicker dealer, and we didn’t have a trade in so it was a cake transaction. But the key was the no-dicker price was right around market value based on TrueCar and the AcuraZine “what did you pay” threads; they quoted me a number right in line with those data points so I knew we were getting a solid deal, even if a couple hundred bucks might be left on the table. Had they said “MSRP, take it or leave it” I woulda left it.

    • 0 avatar
      NormSV650

      If no trade I’d find the lowest price possible nationwide and have it shipped in. The Dealerships that advertise the best pricing are used to shipping around the country.

      With 20 minutes on the phone and a handful of emails you really can’t find a better buying experience.

  • avatar
    ACCvsBig10

    Nice of them to include a $800 dealer fee adding to Florida highest average doc fee

  • avatar
    MrGrieves

    This strategy will work well for luxury brands. Affluent people don’t really care how much they are paying for a car they truly desire. To them, time is the most precious commodity. The “no dicker” model means they breeze in, write a check (or have their broker wire the cash), and drive off.

    For the rest of us proles, forget it. Price is king. You gotta negotiate.

    • 0 avatar
      S2k Chris

      I don’t think that’s true. People want a competitive price, but most people don’t care about getting the absolute lowest price. I bet most would be willing to pay $500 more on a $25k car to just walk in and sign the paperwork rather than negotiate a price. But to make it work, they have to skip a trade-in to, otherwise you still need to negotiate there.

    • 0 avatar

      Honda dealer near me (Manchester Honda) has been doing fixed pricing for decades now. They do a huge volume of cars I know the usually have 400 new cars in stock, one of my neighbors used to do titles etc there about 10 years ago she said at the time they did indeed have over 100 units a week leaving. It can work there are other out there too.

      • 0 avatar
        Mandalorian

        @S2k Chris- You hit the nail on the head. The easy straightforward experience has value in itself.

        • 0 avatar
          slance66

          Absolutely agree with @S2k. The general approach…let’s screw some customers and give others a great deal doesn’t appeal to many. The internet has changed the game, leading to fewer sticker paying idiots. People value their time and want a fair deal.

    • 0 avatar
      newenthusiast

      “Price is king. You gotta negotiate.”

      Nope. How little time I spend in the transaction is the single most important factor in purchasing anything.

      If you put an “F&I” guy in front of me to talk about add-ons or anything over and above the total purchase price I already agreed upon with the salesperson, I will walk. And I WON’T be coming back. I already agreed to a price. Give me the keys, have me sign the paperwork, and let me leave.

      If YOU want to negotiate, fine. But a large majority of Americans hate it for ANY purchase. I just want to make the purchase get on doing things I actually WANT to do.

      I hope the direct sales model becomes more prevalent soon, so consumers can choose which way they prefer. Those who like negotiating can do so, and those who hate it have an option as well.

    • 0 avatar
      Avid Fan

      Time is precious. In between heart caths and colonoscopies is usually a good time. After the 6 am doctors appointments and the 3 o’clock early bird specials at the sea food buffet.

  • avatar
    zip89123

    I considered a Lexus but the dealer nearest me doesn’t deal and probably doesn’t move 8000 Lexus vehicles in 8 years.

    • 0 avatar
      highdesertcat

      ” the dealer nearest me doesn’t deal ”

      I never knew of a Lexus dealer who discounted off MSRP any Lexus product.

      Pretty sure that “What you see on the MSRP is what you get to pay, and then some.”

      • 0 avatar
        fvfvsix

        I’ve negotiated for two Lexus vehicles – one of my own, and one for my mother. Different dealerships, different states – both came to an acceptable price (roughly 8-9% off MSRP in both cases) within the first pass of negotiations. The will deal, but they all seem to cut to the chase pretty quickly, in my experience.

        • 0 avatar
          highdesertcat

          fvfvsix, thank you. I learned something today.

          I extracted your comment and posted it on the Lexus boards I read, for all to heed.

          Yes, I know a few people who chose Lexus for their final years.

          • 0 avatar
            windnsea00

            Hate to put out one of those internet stories of amazing price wrangling but December 2016 I was helping a friend buy a 2016 Lexus IS250 from Lexus of Glendale. With all the end of year rebates, being an older model year, some demanding lines from me, and probably just right timing I was able to get a 20% discount from MSRP for my friend with the 2nd year of maintenance thrown in. Her lease for 15k miles a year and $0 down was mid $300 a month including tax. A lot of car for the money from my perspective.

      • 0 avatar
        NormSV650

        Pick your favorite car, than look on cars or other main for sale sites and you’ll see what you’ve been missing.

  • avatar
    dukeisduke

    I saw one of their cars the other day, here in Dallas.

  • avatar
    tjh8402

    I’m not sure how much I buy into the whole “wealthy people don’t care about negotiating idea.” It’s only one data point, but I saw the opposite effect when buying an airplane. When I worked line service, we had a based customer that bought a Beech Bonanaza instead of a Cessna 206 (this was before the merger) because Beech was willing to haggle and discount the plane, whereas Cessna wasn’t, even though the 206 was still cheaper, even after the Beech’s discount. His instructor told me he was used to negotiating big deals, and didn’t like that Cessna wouldn’t offer any discount, whereas he felt like he was getting something from Beechcraft since they discounted the Bonanza.

  • avatar
    87 Morgan

    Too funny! Who knew that JM Lexus was the top Lexus dealer in the U.S.

    Let us see….What does JM stand for? Jim Moran perhaps? The same company that owns one of the largest F&I service contract providers in the U.S know as JM&A…who are privately owned and one of the other subsidiaries is…..wait for it…Southeast Toyota. The **ONLY** Toyota distributor in the U.S. Other than the market area that is under Southeast Toyota dealers buy from the factory. So, not sure how it is a surprise that the Lexus dealership, owned by the ONLY distributor of Toyota product in Florida manages to get the most cars to sell.

    Strange indeed.

    • 0 avatar
      mikeg216

      Ahh those bastards tru kote pin stripe scotch guard and glass etch every damn Toyota they get their

      • 0 avatar
        zip89123

        -mikeg216 — so true. This was a reason I didn’t buy while in TX in 2012 as the Gulf States Toyota conglomerate screws up everything there with the BS add-ons.

    • 0 avatar
      James2

      I know a lot of people don’t think Hawaii is part of the U.S. but we have our very own Toyota/Lexus distributor, Servco. They also own every single Toyota and Lexus dealer in the islands. I don’t know how they get away with it.

  • avatar
    sirwired

    Don’t forget that this sales strategy still gives them plenty of room to try and extract money from you via financing and trade-in value. Of course, you kind of have them in a corner on both, since if they go too far, you can always sell your car to CarMax and get financing elsewhere.

  • avatar
    JMII

    I live right down the street from this dealership. Margate FL is a small (9 sq miles) town with pretty average socio-economic status. However it is on the border of two wealthy communities: Coral Springs and Boca. Even higher end residences in Ft Laud’s Las Olas area and Weston are about 20 miles away. So they do serve a market with plenty of cash flow. FYI both Champion Porsche and Coconut Creek Infiniti are both in same area and also claim #1 status for their brands (true? who knows).

    JM Lexus is part of a huge car group known as Jim Moran Group headquartered in Deerfield Beach FL. You may know them as SE Toyota Distributions. Their F&I department is massive as (per their website) 1 in 10 vehicles sold in the US has JMG product attached to it. I used to work for a company that printed some of their marketing materials and GAP insurance was a major product they pushed along with extended warranties plus that vin etching and other nonsense. In addition they have Omni Financial under writing all those auto loans. To say the JM Group is automotive powerhouse is an understatement.

    I’m sure part of their success is the near total control they have, basically end-to-end in the Lexus buying/leasing process. They control the distribution, the financing and the insurance. With no outside vendors or agencies to deal with they truly offer one stop shopping. I know their F&I department sells software that other dealership use for floor planning so it seems they have excellent tools for auto dealership management.

    • 0 avatar
      Erikstrawn

      “I’m sure part of their success is the near total control they have, basically end-to-end in the Lexus buying/leasing process. They control the distribution, the financing and the insurance.”

      Isn’t that the logic that dealers use to try and keep manufacturers out of the game? They argue manufacturers would have too much control of the pipeline, but then they’re consolidating the other end of the pipeline in a bid to control it themselves.

  • avatar
    Oberkanone

    I need to remind myself TTAC is a blog, not news.

Read all comments

Back to TopLeave a Reply

You must be logged in to post a comment.

Recent Comments

  • Oberkanone: How much is the penalty for returning it without fully charged battery? What is the pre-payment charge...
  • Tele Vision: I’m glad that this Brady fellow was identified as some sort of footballist. That must be a draw...
  • dal20402: My prediction: these will be focused on major city airport locations, where they will install a large power...
  • dal20402: My prediction: these will be focused on major city airport locations, where they will install a large power...
  • golden2husky: Being socially conscious might resonate with a portion of Tesla owners. But for most people who buy...

New Car Research

Get a Free Dealer Quote

Who We Are

  • Adam Tonge
  • Bozi Tatarevic
  • Corey Lewis
  • Mark Baruth
  • Ronnie Schreiber