Recently, the Detroit Free Press reported that luxury car manufacturer, Lexus, is introducing negotiation-free dealerships "as a way to differentiate its dealer experience." This means that in the dozen Lexus dealerships that have been handpicked to participate in the pilot project, vehicle sticker prices will be fixed and not subject to negotiation. Is this a better way to buy a car?
Challenging Customer Expectations
With the test run of this new practice, Lexus has accepted the fact that they may have to let some prospective customers just walk away. This begs the question, how many potential buyers will just take their business elsewhere when they realize that there is no "talking down" a price? Or, maybe Lexus customers will be relieved that there will be one less step to worry about in the car-buying process.
- Scenario 1: The consumer has done a significant amount of research, and they know exactly what kind of vehicle they want to buy, as well as the price that they're willing to pay. They go to the dealership, find the car, and they're happy what the dealer is asking for that vehicle. They pay for the car and drive away, pleased that everything was so easy.
- Scenario 2: A customer comes to their local Lexus dealer, wanting to buy, but uncertain as to exactly which model will best serve their needs. They are ready, willing and expecting to spend a full day negotiating a price if they find a car that they like. When it becomes apparent that haggling is out of the question, they feel cheated out of the opportunity to get the best deal possible. They leave in a huff, pledging to let the world know, via social media, about their awful experience.
It will be interesting to see whether the Lexus experiment yields more "S1s" or "S2s," and if other car makers will implement similar practices in their dealerships. In the meantime, what is the best way to approach the traditional car-buying process, where negotiation is the norm?
Getting the Best Car Price
Some buyers love to haggle, while other customers would rather have a root canal than negotiate the price of something. If you are planning to hash out a car deal in the near future, there are some important things to keep in mind.
- Do your research. In the Age of Information, it is easier than ever to find out exactly what everyone else is paying for the car you want. Have an ideal price in mind before you walk into the dealership.
- Know what your trade-in is worth. Don't back down from what you know is a fair dollar amount for your current car. You can knock a substantial chunk off the price of the new car with a decent trade-in.
- Be prepared to walk away. Certain Lexus dealers may be willing to let customers walk, but absolutely no other dealership under the sun WANTS to lose a sale. Show them that you mean business and are willing to walk out and try somewhere else if necessary.
Financing for Everyone
One thing that isn't negotiable is the need for good, affordable financing. And if you have damaged credit, you may be worried that auto loan approval is out of your reach. This is where Auto Credit Express can help. We specialize in connecting credit challenged buyers with qualified dealers who can get you approved.
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