No-Haggle Vehicle Pricing - Yea or Nea?

[911dean]

I like to haggle a little bit. I decide what I want to pay and I feel I'm fair. It's either yes or no. Car dealerships have always given me my price, but usually I have to come back. I felt I did well with my new truck, $11000+ off sticker, including trading in my 120,000 2001 BMW Wagon. It took away the hassle of selling the car myself. Incidentally they sold it in less than 2 days.

[Norm K]

Originally Posted by nota

never deal with dealers [stealers]
they are pro's and never really underprice anything

Have to disagree. On used cars, it's not at all unusual to be able to buy a car from a dealer for less than you can from a private party. How? `Cause it's pretty likely they got it for a stupidly low number, that's how. For those folks who think dealers are good at selling cars ... well, you oughta watch `em buy `em. And while the private party is selling but a single car, the dealer often offers some variety, even on used cars.

So when old Joe Schmuckatelli decides to sell his car he typically looks at what dealers are asking then sets his price a thousand or so dollars less. What he, (what much of the buying public) doesn't realize is that any dealer worth his salt can undercut old Joe's price by a grand and still make good money. Now, will the dealer do that on a car he's had in inventory only a few days? Probably not, though it's not unheard of. Let a car sit for more than a few weeks though, and the dealer is very motivated to move it because inventory turns are huge to these guys. It ain't magic, it's the same inventory management that many other types of businesses are faced with every day.

Of course on new cars the dealers' hands are largely tied because they pay whatever the manufacturer tells them they're going to pay which means that you will too.

[aschen]

I love the idea of carmax but in practice they are overpriced. It is not unusual to see cars with 15k miles for more than a decent deal on a new one

[Porsche-O-Phile]

As I said before I personally loved the CarMax model when I bought there. Could I have found a car comparable to what I bought elsewhere? Probably - maybe even for a little less but who's to know. I thought the deal was still reasonable (or I wouldn't have done it) and I definitely appreciated the ability to "try before you buy" by testing a few vehicles out with little or no pressure.

Personally I think the best / ideal model would be to pick your vehicle online and just pay a set price - kind of like eBay for a used car (and I've bought a couple off of there too). For a new car you should be able to build what you want online - pick model, colors, options, features, etc. and then have it delivered to wherever you want in a few weeks. I believe Tesla is doing something like this. I love it. Anything - I mean ANYTHING that gets traditional salespeople out of the loop is a good thing in my book. I frankly can't stand salespeople, I loathe pushy tactics, I can't stand dealing with head games and all the rest of it. I do my homework pretty extensively before major purchases and go in knowing what I want and what I am willing to pay. Salespeople just get in the way by trying to sell me what I don't want or pay a price I'm not agreeable to (and I know already is unrealistic / unfair). Frankly I have very little use for them pretty much across the board - no offense to anyone in sales here but frankly I just despise the undertone of sleaziness to it. I doubt I'll ever change either. I can't be alone too - why are internet transactions so popular for just about everything else? No pushy people. Frankly I think it's a dying career path clinging to convention that is being gradually muscled out by more efficient technology-based transactions.

As the customer I always ask myself "is this something I'm willing to pay (or pay extra) for"? In the case of a salesperson, the answer is almost always "no". There's no value-add to me so why should I pay extra for it? I think that's the realization people are starting to make and the point of view they'restill starting to adopt, which is why fixed-price, take-it-or-leave-it, web-based sales are doing so well as a model (think Pelican!)

My $0.02. Opinions I'm sure will vary but if I could get everything I wanted to or needed online without dealing with any salesmanship, I'd do it in a New York minute.

[masraum]

When I price a car to sell, I generally mark it up a bit more than I want because it seems like everyone wants to pay less than the initial ask. For instance, if I want $5000, I'll ask $5800, and I'll take anything between the two that they offer.

When I'm buying a car, I'll look at cars that seem like they are in the neighborhood of what I think they are worth and what I am willing to pay. I'll probably offer a little less, if the asking price is $20,000, I may offer $19,000, and depending upon circumstances, I'll probably buy it whether they come down or not.

I've read several articles that say that the no haggle places don't generally get you the best deal. But then I've heard of folks spending weeks haggling to get the best deal. It's not worth my time to fight back and forth.

My philosophy on buying and selling, put up a fair price and it'll sell whether I'm the buyer or the seller.

[MBAtarga]

Matt,

Maybe your buyers are accepting your "lowest price" amount because they perceive you are an on the level seller and offer honest information on your cars. Your detailed descriptions/write-ups give them an overall positive perception of what they are buying - with no unexpected or hidden issues. When you offer your price - it's likely perceived as a good buy and fair price. I'm assuming you aren't pricing your autos at a premium.

[JavaBrewer]

I hate haggling but prefer that over fixed price which typically is 50% higher than what I could have save by playing the game. No to fixed price. That said also no to dealer tactics to wear folks down.

[masraum]

I've bought one car from Carmax, and would have bought a second, but we weren't in the market, and when we decided that we might be in the market and went back the car was gone. I've driven several cars at carmax that were pretty moderate and a few that were pretty nice, but to me, overpriced.

There's a small independent used car place here that does the no haggle thing. I think I've bought 2 cars from them, and they are the same as Carmax, so cars weren't in good enough shape, and some were overpriced.

My boxster was essentially no haggle. I think I talked them out of $500, but I felt like I got a pretty fair deal for what I got.

[onewhippedpuppy]

Originally Posted by MBAtarga

Matt,

Maybe your buyers are accepting your "lowest price" amount because they perceive you are an on the level seller and offer honest information on your cars. Your detailed descriptions/write-ups give them an overall positive perception of what they are buying - with no unexpected or hidden issues. When you offer your price - it's likely perceived as a good buy and fair price. I'm assuming you aren't pricing your autos at a premium.

I would like to think that's the case, as that's certainly my goal. Wholesale isn't as cheap as most people think, and I try to have excellent cars priced near to the low end of the market. I enjoy buying and selling cars, but it's not nearly as profitable as most people think.

As an aside, the single biggest obstacle to having a dealer's license is overcoming the negative perception of dealers thanks to the other 99% of scheisters out there. It's hard to run an honest business when everyone automatically assumes you are a liar and a cheat.

[Hugh R]

I buy my Toyota's through a BIL who works for Toyota USA in Torrance, true dealer cost. Otherwise I use COSTCO for buying.

[scottmandue]

Hate, hate, hate haggling... when buying used no matter how low you get the seller down I always walk away feeling like if I had been a little more of an ********* I could have got the price lower.

As Sammy said this is not Tijuana or Bagdad... do we go to the supermarket and haggle over the price of a quart of milk?

I'm an internet car buyer... do my research and get a ballpark on a fair price... and do all the dealing via email then show up with a check.

[LeeH]

I've bought enough cars that it doesn't bother me to negotiate (plus, had a wholesale license). I do my research before showing up. Usually I know exactly what I want and the most I'm going to pay. I've done deals over the phone where I show up, write a check and leave.

If Carmax has the vehicle I'm looking for, it's always been priced quite a bit higher than I'm willing to pay.

I've wondered how a completely transparent $X over cost dealership would work. "Here's $X, what we paid at auction, here's our cost to recondition, plus a $500 profit, your price is Y."

I bought my Audi wagon from a private party. He had it priced at $18,500. I paid $16,500. Felt it was worth the back and forth to save $2000. In the end I think the price was fair for the car.

[McLovin]

Originally Posted by onewhippedpuppy

I would like to think that's the case, as that's certainly my goal. Wholesale isn't as cheap as most people think, and I try to have excellent cars priced near to the low end of the market. I enjoy buying and selling cars, but it's not nearly as profitable as most people think.

Yeah. Maybe the margins are high(er) for a franchise car dealership that can take in late model trade-ins. When the dealer is dealing with a customer who is trading in a car, I'm sure they can grind the price down pretty good. Dealer v. customer, I'm going to bet on the dealer.

But if a used car dealer has to go through Manheim, the profit margin typically isn't going to be great. I've always been amazed at how high prices get bid up at Manheim. The prices for the most part seem to me to be not much off what you can find on Craigslist.

That's the biggest bummer about the business.

[McLovin]

Originally Posted by LeeH

I've wondered how a completely transparent $X over cost dealership would work. "Here's $X, what we paid at auction, here's our cost to recondition, plus a $500 profit, your price is Y."

I think that probably would work. IF you are willing to go to an auction, buy a car, take all the risk on it, get it to your shop, recondition it, etc. etc. etc. all for a maximum $500 profit.

But it would depend on how much recondition, etc. costs were. The bottom line is if the car is priced below market, it will sell. If it's above, it's a hard sell.

[Z-man]

Originally Posted by LeeH

I've wondered how a completely transparent $X over cost dealership would work. "Here's $X, what we paid at auction, here's our cost to recondition, plus a $500 profit, your price is Y."

That would be great, except for one thing: greed. Most sellers will not be satisfied with $500 profit - so they will push that margin higher, if possible. You can see this in action not only at used car dealerships, but at garage/estate sales, craigslist...etc.

As stated many times here - doing the research and understanding what the current fair market value is on an item is vital in getting a good deal - whether or not the deal involves haggling. Doing this type of research applies to both the buyer and the seller.

-Z

[GWN7]

Saturn cars. No haggle. If it worked they would still be around.

I hate haggling. Give me your best price, if I like it I buy.

None of this "Document fee" or other add on crap either.

Last truck I bought was from Enterprise Used Cars for Sale, Car Dealerships, Buy Used Vehicles - Enterprise Car Sales No haggle and it was $10,000 cheaper than what they wanted up here. All major vehicle manufactures refuse to sell to Canadians new vehicles.

[onewhippedpuppy]

Originally Posted by McLovin

Yeah. Maybe the margins are high(er) for a franchise car dealership that can take in late model trade-ins. When the dealer is dealing with a customer who is trading in a car, I'm sure they can grind the price down pretty good. Dealer v. customer, I'm going to bet on the dealer.

But if a used car dealer has to go through Manheim, the profit margin typically isn't going to be great. I've always been amazed at how high prices get bid up at Manheim. The prices for the most part seem to me to be not much off what you can find on Craigslist.

That's the biggest bummer about the business.

The franchise dealer can play the shell game between trade-in value, new vehicle price, and financing. They also dangle the carrot of reducing your sales tax burden by thousands with the trade in. So yes, they can make a killing on used cars.

Everything I buy at auction goes through Manheim, because they have damn nice cars and 3rd party inspection reports that are spot on. I maybe win 5% of the cars that I bid on, and many sell for more than I planned on selling the car for. Some cars I don't even bother trying, because I know they will be too much. The 996 C4S still sells on average for over $30k on Manheim, but they can easily be had on the used market for $30k or less. That's over $30k WHOLESALE. I guess that's why there are a bunch of overpriced 996 C4S for sale at dealerships.......

Originally Posted by McLovin

I think that probably would work. IF you are willing to go to an auction, buy a car, take all the risk on it, get it to your shop, recondition it, etc. etc. etc. all for a maximum $500 profit.

But it would depend on how much recondition, etc. costs were. The bottom line is if the car is priced below market, it will sell. If it's above, it's a hard sell.

It would never work, because people are totally unrealistic about profit margins and the overhead expenses associated with running a business.

[biosurfer1]

Originally Posted by onewhippedpuppy

It's hard to run an honest business when everyone automatically assumes you are a liar and a cheat.

This is your opportunity, though, in the specific market you are in...downside is it takes time.

I guarantee people remember the car dealer who treated them fairly and honestly way, way longer than the stealerships simply because of what you said, they are programmed to assume they are liars and cheats.

I've never met you but been on this forum long enough that I know who you are, what you do and would not hesitate to purchase a car from you or recommend a friend. I can count on two fingers the number of dealers I feel that way about. You're doing it right and while it may take a while to break free from the stigma of the other dealers out there, it does happen and having a TRUE honest/fair reputation in the car world cannot be measured.

[Porsche-O-Phile]

Saturn didn't fail because of the no haggle policy they failed because their cars were crap and fell apart. Add to that the fact that they were ultimately owned and managed by GM and you can see why they went under.

When they first came on the scene everybody raved about the no haggle price and it was a great model and a cut a lot of attention. The cars not so much.

Another thought - perhaps there's such a prevalence of dealer sales sleaziness in the car industry because there's not a lot of repeat business. Seriously - how many people are repeat customers of this dealer or that dealer? Most often I suspect people shop on the basis of one thing - price point. That's it. I don't think I know anyone that has ever gone back to a particular dealership. So where's the incentive to not take every sale for everything they can dollar-wise?

Reputation is important - somewhat but it seems that beyond some peripheral word-of-mouth possible impact, there's not a whole lot of downside to dealers acting like sleazebags. Heck, a lot of people seem to actually expect it!

I applaud your not resorting to profit-padding techniques or flagrantly ripping people off. You're a good guy and I hope it pays dividends for you!

[LeeH]

Originally Posted by onewhippedpuppy

Everything I buy at auction goes through Manheim, because they have damn nice cars and 3rd party inspection reports that are spot on. I maybe win 5% of the cars that I bid on, and many sell for more than I planned on selling the car for. Some cars I don't even bother trying, because I know they will be too much. The 996 C4S still sells on average for over $30k on Manheim, but they can easily be had on the used market for $30k or less. That's over $30k WHOLESALE. I guess that's why there are a bunch of overpriced 996 C4S for sale at dealerships.......

I mostly shopped at Adesa here in Phoenix when I had my license because it was close to my house. Many times I'd worked out my max auction price and my target retail price only to have the car sell for more at auction than I'd expected to get at retail.

That's when I started buying cars off of Craigslist from private parties and selling them at the auction.