Lexus No-Haggle Pricing Pilot Going Reasonably Well
The worst part of the car buying experience for many drivers is the negotiating phase. Even those of us who write about cars every day dread the experience, and then second-guess everything that happened in the dealership. To help ease the pain, and encourage more luxury buyers to consider its vehicles, Lexus has rolled out no-haggle pricing to a handful of its dealerships. Most of the reactions have been positive, but of course there are some holdouts that are not fans of the new system.
The program is called Lexus Plus, and dealerships that adopt the program receive incentives to encourage them to participate. Lexus sends along tools to help the dealership reorganize its establishment, because Lexus Plus focuses on having one person in the dealership for all parts of a customer’s sale. That means that salesmen need to be trained to work with finance paperwork, and that some finance department staff members might need to be moved onto the sales floor, or to slightly different roles. Even the service department sees changes with Lexus Plus, as it shifts to accommodate a system that focuses on one point of contact.
One of the participating dealerships said that it took about four years to prepare for Lexus Plus, which is a painfully long time for a car dealer. In several cases, the system means that dealership salesmen receive a flat payment for each car sold, instead of a changing commission based on how well the sales went. That gives them less incentive to sell accessories and insurance that a car owner might want to optimize their driving experience. The dealerships asked by Bloomberg reported happier customers and higher sales because of the system.
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While many shoppers appreciate the convenience of not having to haggle, not all of them like the new system. A no-haggle system always makes you wonder if you paid a higher price for a vehicle to make up to that level of comfort. Some customers also get a thrill out of haggling, and are ready for it with their research before they head in to a dealership. We’ll see if this plan remains active at a limited number of dealerships, or if other stores look into pursuing it.
News Source: Bloomberg