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onewhippedpuppy 05-14-2015 11:35 AM

No-Haggle Vehicle Pricing - Yea or Nea?
 
Pondering something related to the recent Tesla debates over manufacturer direct no-haggle pricing, the success of Carmax, and how my cars tend to sell. The most common question that I get when selling a car is, “what is your bottom line”. Because I’m not a lying car salesman I will toss out the price that I need to get, and the typical response is either a purchase or not. The interesting thing is that there’s almost never any negotiation beyond that price, I can’t recall anyone trying to haggle me below my bottom line price. The takeaway seems to be that most people don’t really like negotiating for a car, and would prefer not to. They either take my price or walk away.

The poll is very simple, does no-haggle pricing appeal to you?

Tervuren 05-14-2015 11:53 AM

I look at asking price, more than I'd pay, I walk away.

I'm not into haggling.

My brother on the hand, if he doesn't feel he talked someone down, he isn't buying.

biosurfer1 05-14-2015 11:59 AM

All of the "no haggle" car places make money off the fact that most people don't like doing it and will pay a premium to not have to.

Doesn't bother me one bit

onewhippedpuppy 05-14-2015 12:02 PM

Quote:

Originally Posted by biosurfer1 (Post 8623038)
All of the "no haggle" car places make money off the fact that most people don't like doing it and will pay a premium to not have to.

Doesn't bother me one bit

Very true, Carmax typically has overpriced mediocre cars. But what if the cars were nice and the prices were fair? Would that be appealing?

sammyg2 05-14-2015 12:04 PM

I'm not a Tijuana street vendor, so I don't act like one.

truecar.com

ckelly78z 05-14-2015 12:20 PM

There is nothing in a car add that turns me completely off on looking at a a car like a Price of $5000 "FIRM". If I can't get a car for 10% less than asking price, I usually pass. I don't think anyone in 30 years of dealing, who has ever bought a car from me paid the asking price.

I don't like going to a dealership and dealing with a salseguy, and then the manager , and invariably several back and forth offers. I just want to talk to someone that can say yes or no, and not take two hours of negotiations to come to a deal (or not).

Porsche-O-Phile 05-14-2015 12:23 PM

Love it. Bought my last car at CarMax and will likely do my next few the same way. I utterly can't stand sales pitches and BS sales games in general. Great model.

biosurfer1 05-14-2015 12:38 PM

Quote:

Originally Posted by onewhippedpuppy (Post 8623042)
Very true, Carmax typically has overpriced mediocre cars. But what if the cars were nice and the prices were fair? Would that be appealing?

Yes, but that's usually an oxymoron in the used car world. The problem is used car sellers see an "apples to oranges" comparison, while the buyer sees and "apples to apples"

"Look, this guy is asking $1000 less for his Honda Civic, why should I pay so much more for yours?"

"Well his has 50,000 more miles, scratches every where, pulls to the right when driving and has 4 spare tires where the wheels should be"

Norm K 05-14-2015 12:55 PM

Dealers love the No Haggle approach ... until it comes to the customer's trade.

David 05-14-2015 12:56 PM

My experience over the last couple years of car shopping is that Carmax and most used car dealers are a huge ripoff using the slogan of no-haggle prices to further gouge customers who don't know better.

I base this on looking for a car that's only 1 or 2 years old so the price is easy to compare to new car pricing and not just Kelly Blue Book or NADA values. It's fishy when they price a car thousands over NADA but really fishy when a 1 year old car is priced a couple hundred dollars less than a brand new car.

craigster59 05-14-2015 01:22 PM

I prefer to haggle a bit, although not so much on pricing, but APR, maintenance, trade in value and any other incentives I can weasel out of them.

As far as CarMax goes, for me they are only good for the fact I can test drive a multitude of makes and models without having to go dealer to dealer. Then I can make my decision Lexus vs Acura vs BMW etc.

LakeCleElum 05-14-2015 01:42 PM

Hate to say it, but it's the American way. I hate it too.

When selling, I usually price 10-15% over what my bottom line is. If I only have to discount 5%, I figure I came out ahead.

When buying, I usually start at 20% under asking.....Sometimes, I put exactly that much cash in one pocket like that's all I have.....If I really want it, I have the rest of the cash in my wallet.........

I've on bought from a dealer 2 or 3 times in my life.....

Z-man 05-14-2015 01:49 PM

Quote:

Originally Posted by ckelly78z (Post 8623065)
There is nothing in a car add that turns me completely off on looking at a a car like a Price of $5000 "FIRM". If I can't get a car for 10% less than asking price, I usually pass. I don't think anyone in 30 years of dealing, who has ever bought a car from me paid the asking price.

I don't like going to a dealership and dealing with a salseguy, and then the manager , and invariably several back and forth offers. I just want to talk to someone that can say yes or no, and not take two hours of negotiations to come to a deal (or not).

What's that saying, "Everything is worth ONLY what someone is willing to pay for it!"

For me, anything above a certain dollar amount (somewhere around $5k) is "price negotiable." So that would include cars, homes, furniture, services...etc.

That said, I treat buying a car as a game -- if the other side is willing to play the game - great! Everyone wins. I have left a brand-new car on the lot for a difference of $25 between my final offer and the dealer's ask. Wound up buying the same model car (1987 Mustang 4 cyl LX) for less money but more options at a different dealer. When I bought my wife's Beetle Turbo, I low-balled, and since it was a left-over and I happen to be there on their year-end close, they accepted my offer (provided I took the car off the lot that night!).

In the American culture, negotiating a price is not as popular in other countries -- but maybe we should learn the value of the deal...

If you watch Shark Tank - you will see that the investors on the show will always negotiate the deal. They got where they are by doing that - and not by just paying the asking price... Much can be learned and applied from their way of doing business...

By the way - the art of the deal / the art of negotiating applies not just to buying a car or house. Need to add another couple of people last minute to the reservation at the always-full restaurant? You can always persuade the matre-de with 'added value' like asking for their wine list ahead of time, or inquiring about future events. At one restaurant at a resort in Mexico, I managed to adjust a reservation for a table of 4 to two tables of 8 people each! I promised the guy I would do the dishes, wipe the floor...etc. Never had to wipe the floors, but he knew I was willing to deal, and so was he. (Slipped him a tip at the end of the affair). Most people are willing to deal - you just have to know how to influence them.


My $0.42,
-Z-man.

PS: I have willing to drop my $0.42 down to $0.38, if you accept this deal in the next 20 minutes... SmileWavy

onewhippedpuppy 05-14-2015 01:59 PM

Thanks for the feedback guys. I'm totally comfortable with the game, it just occurred to me that no-haggle pricing might go well with my no-BS policy of selling cars. It's all really just a game, as Z-man stated, most people/dealers price their cars high with the expectation of negotiating down. I would be very interested to see this poll presented to a larger audience of varied ages. It seems that younger generations have no interest in haggling, while most older folks expect it.

My grandfather was an entrepreneur and a master negotiator. One of his favorite sayings was, "if they don't say no at least once you paid too much".:D

Dantilla 05-14-2015 02:50 PM

Dealers play mind games. Wanna play games? Deal me in! I can use similar tactics in return.

Sales dudes are very good at controlling the negotiations. I like to throw a stick in their spokes and do it my way.

Neilk 05-14-2015 03:31 PM

Quote:

Originally Posted by Dantilla (Post 8623255)
Dealers play mind games. Wanna play games? Deal me in! I can use similar tactics in return.

Sales dudes are very good at controlling the negotiations. I like to throw a stick in their spokes and do it my way.

What sticks? I'm curious to hear them for the next time.

nota 05-14-2015 03:39 PM

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

joe owner only knows he needs xxx$ sometimes less then market
cars with problems are even cheaper some are eazy quick fixes
and many sellers will tell you what they did [real clues you never get from a dealer]
others you run not walk away from
hunting private sales is a fun hobby
dealing with dealers is never fun

craigster59 05-14-2015 03:46 PM

Last car I bought we reached an agreement and they were drawing up the paperwork. By this time it was noon so I told the salesman I would get some lunch and come back and sign papers. He told me he would add another $500 towards my trade in if I stayed.

Drove it to work Monday and was offered $450 a day for 2 days to use it in a commercial. Cha-ching!

LEAKYSEALS951 05-14-2015 03:59 PM

I have little faith in "no haggle pricing." I think that is just the trend in car sales. Anyone can say "no haggle", but what exactly does it mean? If I pay someone to put synthetic in my car, how do I know they really put in synthetic, not 7-11 brand oil? To me, someone saying "no haggle" is like going to a stripper club and thinking "hey, maybe she's really into ME" as I sneak some $$$ into her perfumed lingerie.

I want something straight up- for example, I knew a guy who had a dealer license. He said "for $1500, you write down exactly what you are looking for make, color, price, mileage, options. When I find it, I call you on the spot, send you the info, and I bid on your behalf to the price you are willing to pay..." To me, that is the ultimate "no haggle" guarantee- I know exactly what his margins are and still have control over the sale.

I Never did it- but I liked the idea. I could see where he'd hit an auction with a number of client request, and bid on their behalf. I never trusted it because I couldn't get my hands on the maintenance history or test drive it to make sure something wasn't amuck, or look under the engine to see the oil leaks, but at least it seemed straightforward.

For me, for someone to say "no haggle" -I'd want them to say, "I bought this car for x." I invested x in detailing it and checking out it's history. It cost me x to store it. I sell it for x+1. Here is my margin after all expenses. Take it or leave it. ... That I would respect.

ckelly78z 05-14-2015 04:46 PM

My best deal at a dealership came when I got a non-soliticited $500 off offer for any car on the dealership's lot. I thought I would go see if anything looked interesting. Back behind the building there was an 20 year old Dodge truck that looked like it had seen better days with a price of $995 on the window. I asked about it and was able to get it started and drive around the lot, and kick the tires a bit. I listed all the issues it had and made an offer of $700 cash after some back and forth. They accepted the offer and paperwork was started....that's when I whipped out the $500 off coupon, and by law, and the way the coupon was written, I walked away with the truck for $200 which I later sold for $850.

911dean 05-14-2015 04:57 PM

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 05-14-2015 05:06 PM

Quote:

Originally Posted by nota (Post 8623318)
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 05-14-2015 05:49 PM

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 05-14-2015 06:47 PM

No-Haggle Vehicle Pricing - Yea or Nea?
 
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 05-14-2015 06:53 PM

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 05-14-2015 06:53 PM

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 05-14-2015 06:54 PM

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 05-14-2015 06:57 PM

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 05-14-2015 07:05 PM

Quote:

Originally Posted by MBAtarga (Post 8623573)
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 05-14-2015 07:36 PM

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 05-15-2015 07:09 AM

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 05-15-2015 08:48 AM

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 05-15-2015 08:53 AM

Quote:

Originally Posted by onewhippedpuppy (Post 8623591)
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 05-15-2015 08:56 AM

Quote:

Originally Posted by LeeH (Post 8624113)

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 05-15-2015 08:59 AM

Quote:

Originally Posted by LeeH (Post 8624113)
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 05-15-2015 09:56 AM

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 05-15-2015 09:57 AM

Quote:

Originally Posted by McLovin (Post 8624124)
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.......

Quote:

Originally Posted by McLovin (Post 8624126)
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 05-15-2015 10:10 AM

Quote:

Originally Posted by onewhippedpuppy (Post 8623591)
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 05-15-2015 12:59 PM

No-Haggle Vehicle Pricing - Yea or Nea?
 
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 05-15-2015 02:32 PM

Quote:

Originally Posted by onewhippedpuppy (Post 8624220)
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.


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