There’s a small but growing movement among car dealers to a no haggle policy. Instead of going in and enduring the back and forth nonsense dealers are known for, the price is set and that’s that. No more, “I have to get approval for this” or “I’ll see if my manager will go along with this.” Wouldn’t that be nice? Every other retail store we go into has a price on items for sale and you decide if it’s worth it. If it is, you buy it, if not, you don’t.
Motorcycle dealers operate the same way as car dealers and most of us wonder if the deal we just made was great or if we got taken to the cleaners. Here on The Kneeslider, comments sometimes appear with a price wondering how their deal compared to what others paid. Do dealers think that makes anyone feel good? Why not just set a price the dealer is comfortable with and sell the customer on the benefits of the product and doing business there?
In some cultures, haggling over price is expected, here in the U.S. it only exists in certain industries and the less of it we encounter the better many of us feel. Customers seem to prefer no haggle, car companies seem fine with it, only the dealers resist. I wonder if this will continue to spread.
Link: Business Week
anon says
A lot more things are negotiable than you might think. You just have to try. Anything over $100 and not at a big box chain store is [potentially] negotiable. Pretty much any durable good: appliances, high-end electronics, jewelry, guns, tires, any (non public utility) service. List price is for suckers.
As to ‘no haggle’ pricing, dealers love it because they make more money that way. If you go to a ‘no haggle’ dealership, you’re going to over pay. Not only that, but even though you’re paying MSRP on the new vehicle, they’re still going to price your trade based on 20%-30% below wholesale. They’ll get you coming and going. Saturn only gets away with it because the buyers are naive, and BMW (most dealers are full list price) only gets away with because the cars are in that high of demand. Something on the order of 70% of BMW are built to order.
Sure, go to ‘no haggle’ dealership if it makes you ‘feel good’ to know you got the same deal as everyone else, but to me: I wouldn’t feel very good knowing I was in a group where everyone got the same BAD deal…
kneeslider says
If there’s only one dealer for hundreds of miles, you may over pay, … if you check nowhere else. The second dealer usually will take care of that pretty quickly. The Internet usually tells the customer much of what he needs to know about dealer cost and what he can expect to pay. The days of the uninformed customer are going away and getting dealers to understand that is a rough road.
I never suggested List price, I mean a dealer set price based on his cost that is competitive with other dealers.
Richard says
The dealer’s cost is set by the manufacturer. If there is “no haggle” pricing, then everyone will pay close to the max, not the minimum. With motorcycles, the manufacturers prevent competition by limiting the assigning authorized dealers to specific geographical areas. Therefore, the dealers will NOT be motivated to lower their prices to compete with other dealers.
If you do manage to force cut-throat price competition, then the dealers who have the “best” prices will be the dealers who have cut their overhead expenses by dropping services or cutting corners in other undesirable ways.
Richard says
Please strike out “limiting the” in the above post. Sorry for the sloppy writing.
todd says
I heard that you can still get a Saturn or Scion for less than the “no-haggle” price. The dealers would be stupid to turn down a reasonable offer.
-todd
Mayakovski says
Even the big box stores can be open to Haggling, I have found a number of times at my local Home Depot an openness to this.
When I bought my table saw (list $400.00) there last year, I also realy wanted a drill press (list $300.00), total $700.00. So I told the salesman I would buy both if he would drop the price to $600.00, we went back and forth for 5 minutes but he agreed and even did the sale without GST/PST. So a list and no haggle price of $798, was had for $600 because I haggled.
I have had this kind of luck a number of times at Home Depot and at other stores.
Haggling Rules.
If you don’t like to haggle, then enjoy full price while the rest of us save.
taxman says
people want to find a “good deal”. no matter what the product i see people scavenging the internet to find where they can get something for cheaper. and even the ‘no haggle’ dealerships have locational prices. i can’t buy a saturn for the same price as a guy in ohio. it’s just a gimick phrase to get people in the door.
kneeslider says
Most of us have learned to haggle because it works and because the built in mark up currently is set to expect a haggled down price, which is the REAL price in many cases. I can cite many of my own experiences that are like those above, most of us can.
Some people get a lot of satisfaction knowing they worked this great deal when in fact the salesperson figured he’d let it go for that much before he even started. He gets the sale, the haggler thinks he beat him down, everyone wins, … I guess, except the time and effort expended is a pain in the butt and sales are lost when some potential customers won’t even go in because they hate the process. And the customers that don’t haggle end up paying too much.
My wife loves to shop, I hate it. I miss the sales she always knows about but I devote zero energy to keeping up with all of the prices. But then, she hates buying a car. Isn’t it funny that even someone who loves to shop for everything else hates to shop for a car because the haggling is so tiring? She loves her car but not the buying.
If you enjoy haggling, once you’ve got some great wins under your belt and you can tell everyone tales of how you got this super deal by being a crafty and smooth negotiator, that’s enough, you’re done, you win. After that, haggling is a tremendous waste of time.
Of course, opinions vary … 🙂
The above all applies to new dealer purchases of cars or motorcycles. Used cars or motorcycles require negotiation because who knows what they’re worth, it’s all up to the parties involved. I think a few comments above might be getting off track on that point as they slide into all kinds of other products. This post is specifically aimed at the car and motorcycle dealer buying process.
Bryce says
I don’t love the car buying process, but I wouldn’t really love the house buying process either. Unlike shopping for regular items, there are little fees here and there and all sorts of things that do not make the buyer empowered. With clothing, small electronics, etc. you just walk in, look around, pick up what you want and pay. Throwing in a quick haggling process in there wouldn’t kill that feel. It’s the high pressure drama that dealers and sales people build up to make you feel bad for just walking out the door.
Basically, you could walk in, look around, figure out what you want, agree on a price, and pay your money and go. That would be an ideal way to buy or sell any large dollar item. Making something haggle free is not the same as making it hassle free. I don’t think Saturn and Scion have figured that out. When I was car shopping this summer Scion didn’t get my business because they were basically a business as usual Toyota dealer with cooler sunglasses and a rad haircut.
I had a great experience with my Mazda dealer. I sent a few emails, I made a phone call to the guy, and it was all pretty easy. At least until it came time to write the check. Then I got passed along to the guy in the finance department who was insistent upon me using Mazda’s financing. I had already secured financing through my credit union, but he was pretty adversarial, verging on hostile about it. It was very confusing to me after having had a super easy experience on the sales side.
Point being, I’ll keep on haggling for vehicles and anything else I think I can get a break on. There is no harm in doing it as long as you’re polite. The worst anyone can do is to say no. What smart dealers of vehicles are already doing is making customers feel comfortable throughout the purchase process.
Ry says
I like the no haggle Idea. It would be nice to eliminate the sales man too. If you take some of the overhead out of the sale you should be more competitive and well below retail. The K-mart of auto/cycle sales if you will. If you want to haggle you can go buy used vehicles.
coho says
It’s pretty sad when the definition of a good car or bike deal is when both the customer and the salesman come away from it each thinking they screwed the other guy on the price.
Prester John says
So go into Walmart and pick out a basket of items. Go to check out and haggle over the cost of 5 cans of tuna, 2 t-shirts, a package of 9V batteries, four quarts of motor oil, a greeting card and a flat of petunias.
Walmart’s price structure has to cover the overhead of the hour it takes to check out each customer, plus the extra pay for all those checkers who are skilled negociators.
So it takes everybody an extra 57 minutes to check out, the store’s overhead is higher, and over the long run, in total, how is it again we save money?
Tom
Jeff in Ohio says
Ok, I bought a new Yamaha FZ6 this year. Went to a no haggle dealer in Toledo (2 hours from my house). I tried 4 other dealers near me and the closest anyone would get to the guy in Toledo was $450. I paid around $850 under retail, $50 doc fee NO set up NO freight. Everyone else had higher fees and/or wanted prep/freight. All that at a no haggle dealers. The haggle dealers were like “I can’t touch that price” – INCLUDING a dealer I had previuosly purchased from. One haggle dealer said he could do a leftover 2006 for that much, but not a 2007.
The best part is, even though they I walked in with the cash in hand, they let me charge the entire purchase on my AMEX with no additional fee. I paid AMEX the cash when the bill came and garnered 6,500 Delta airlines reward miles to boot. If they would have had the correct vendor code, I could have used my AMA visa for an additional 3% savings. I setup everything on the phone, walked in, they gave me one of those vibrating coaster things like at a busy restuarant and said ‘when that goes off, come on up and your papers will be ready to go.’ I waited 15 minutes looking around and spent maybe 5 minutes paying for it and signing papers. They claim only one dealer in the country sells more bikes than they do…..
Ry says
Jeff , sounds like a no haggle dealership is a good business opportunity.
Jeff says
Heck I know some folks that haggle at Walmart . 🙂