Should vehicles just have a set price?

[GREENBACK]

Capitalism and supply/demand at its best.

If that is what the market wanted, (and it would INCREASE sales), that is what the dealers would do.

It's not in the dealers best interest to do that unless it drove sales thru the roof.

This is the point I'm trying to make. How do they know this won't work. I'm not aware of any dealerships even trying this concept in my area. I have to wonder if this idea couldn't be sold through good marketing. I believe they would see a sales increase simply because they have removed the intimidation factor and made themselves look friendlier to prospective buyers. It's a bit of a bold step when none of the competition is doing it but I think it could work.

They would not neccesarily receive as much profit per vehicle but they very well could make it up in volume. I have talked to quite a few people over the years that really don't like walking into a car lot and seeing a price on a vehicle that is basically B.S.. If a set price or a more reasonable negotiating price worked for one or two dealers I think the others would sit up and take notice.

[disneysteve]

I believe they would see a sales increase simply because they have removed the intimidation factor and made themselves look friendlier to prospective buyers.

I have talked to quite a few people over the years that really don't like walking into a car lot and seeing a price on a vehicle that is basically B.S.

I agree. Part of the reason I keep my cars as long as I do is because I hate the buying process. If buying a car was relatively hassle-free, I might do it more often. I've actually been thinking about going to CarSense for my next car (they are similar to CarMax with fixed pricing on used cars).

[kork13]

I agree. Part of the reason I keep my cars as long as I do is because I hate the buying process. If buying a car was relatively hassle-free, I might do it more often. I've actually been thinking about going to CarSense for my next car (they are similar to CarMax with fixed pricing on used cars).

I'll second that.... I bought my car (new) through Costco's car-buying service. They gave me a flat cost of $X, and that was the guaranteed price, no questions asked. To check it out, I went to 2-3 other dealers and went through the hassle of negotiating a price. If they offered a well-better price, I'd go for it then, if not, I'd stick with the Costco pre-negotiated price. It turns out that the Costco price was ~$500 less than most others were willing to even touch (except for one dealership, who after I said "no thanks" followed me to a car with a slightly better price, but at that point they had worn my patience). I loved having the set price available to me, and I expect the next time I buy a car (whenever that is), I'll likely try to get the same type of deal worked out.

[maat55]

Competitors colaberating turns the system into a monopoly. Once they are able to fix the market, they can name their price. There is always those who will compete to keep the others in check.

[disneysteve]

Competitors colaberating turns the system into a monopoly. Once they are able to fix the market, they can name their price. There is always those who will compete to keep the others in check.

I want to edit what I said earlier. I'm not saying that there necessarily needs to be a fixed price on a car and that every dealership must charge that exact same price (I think my earlier comments made it sound that way). What I'm saying is that each dealership should have a fixed price. Let them decide what that price would be. Dealership A might price a specific car at $20,499. Dealership B down the road might price the exact same car at $21,050. Dealership C across town might charge $19,999. But all 3 of those prices would be fixed. If you walked into any one of those places, you'd know exactly what the car would cost. So before going shopping, you could make a few phone calls or go online to the dealership websites and find out who had the best price. It would be no different than what we all do today with other big ticket purchases. Buying a new TV? You may check Best Buy, WalMart and Target and go to the one with the best price. What you don't do is walk into WalMart and haggle over the sticker price.

[jIM_Ohio]

This is the point I'm trying to make. How do they know this won't work. I'm not aware of any dealerships even trying this concept in my area. I have to wonder if this idea couldn't be sold through good marketing. I believe they would see a sales increase simply because they have removed the intimidation factor and made themselves look friendlier to prospective buyers. It's a bit of a bold step when none of the competition is doing it but I think it could work.

They would not neccesarily receive as much profit per vehicle but they very well could make it up in volume. I have talked to quite a few people over the years that really don't like walking into a car lot and seeing a price on a vehicle that is basically B.S.. If a set price or a more reasonable negotiating price worked for one or two dealers I think the others would sit up and take notice.

Marketing has costs
No haggle is a lower price/profit

if it would work, everyone would do it or someone would try it. That is free market and capitalism.

[disneysteve]

Marketing has costs
No haggle is a lower price/profit

if it would work, everyone would do it or someone would try it. That is free market and capitalism.

Jim, do you have any idea why autos are the only item that get sold this way? The system isn't set up to haggle at the supermarket, the department store, the dry cleaners or the restaurant. How did it come to be that cars get sold through negotiation? Has it always been that way? Did Henry Ford sell his Model Ts that way?

By the way, there are dealerships (besides Saturn) that do fixed pricing.

[sweeps]

Autos aren't the only thing sold that way. What about homes, vacation packages, high-end jewelry.

I prefer "negotiating" a car price over having a fixed price any day. I can get a much better deal that way.

[ScottON]

Although it would be nice, haggling then boasting about your great deal is a feeling that I think everyone deserves.

[disneysteve]

Autos aren't the only thing sold that way. What about homes, vacation packages, high-end jewelry.

I thought about homes but I think that's different since that is a private party transaction and no two homes are alike.

Hadn't thought about vacation packages. I don't use a travel agent so I didn't know they would negotiate. Same for jewelry. Any time we've bought jewelry, the price was clearly marked on the item and that was the price paid.

[DebbieL]

I never heard of negotiating a price on vacation packages. I pretty much figured if it says it costs XXX then it costs XXX. I never knew you could do that for jewelry either. So you just go into the jewelry store and ignore their prices and say "I'll give you XXX for this necklace". I really never knew that.
Real estate and cars I knew about of course.

[sweeps]

We knocked 40% off the quoted price of our Hawaii vacation by calling the hotels directly and (very politely) pitting them against their competitors. Note that it helps to go off-season. If the hotel/resort is fully booked they have no incentive to negotiate.

I paid less than 50% of the retail price for my wife's engagement ring way back when. You have to talk (and be very polite to) a manager though. The regular clerks don't have much power to do anything.

[tripods68]

I agree with Jim...this breed another socialism view of things. This is hard to do especially in the competitive market like the auto industry. Not all cars are created "equal". We have tier pricing based on the level of options/models people wants to pay (used or new) Invoice vs MSRP. Without competitive pricing, dealers and consumer losses out. Don't like to haggle on prices, do your bidding online that completely avoid dealing with the salesman. I bought cars this way too.

About 3 years ago, a close friend of ours was looking for Honda Odssey. They got the package they wanted, DVD/Nav leather. They told us they paid around $38,500 (paid MSRP) for the whole thing. We paid for the same model/options for $32,500.00 ($300 above invoice). We saved $6K by doing everything online. I pitted 4 dealers competitive pricing online and went to the cheapest dealer cost. As turn out, capitalism really works.

[jIM_Ohio]

I know someone which knocked 50k off the price of a new construction home in a cincy suburb.

I know another person which knocked 7k off a new Honda Odyssey.

I negotiate with anyone I can- if the product is sold by a salesman, there is negotiating room.

If you ever find a salesperson selling lettuce, the price can be negotiated. That is what salespeople do.

[B.J. Johns]

Autos aren't the only thing sold that way. What about homes, vacation packages, high-end jewelry.
I prefer "negotiating" a car price over having a fixed price any day. I can get a much better deal that way.

i agree. something else i like is developing a relationship with the dealer such that over time my loyality for purchasing from them can be rewarded through a break in price here or there. unfortunately, with all the benefits of the internet, a downside is that the type of business i suggested is being replaced by "absolute lowest price" shopping. it's not all bad of course, after all we all want to save as much as possible, but it's just unfortunate to see the brick and morter/mom and pop operations suffer as a result.