No haggle pricing vs. Negotiating

[macarose]

I have owned a dealership for over 20 years and always kept my pricing structure painfully simple.

No haggling. No bogus fees. Tell the customer everything they will ever need to know so that they can make an informed decision.

We do everything we can to provide customers with the prior maintenance and Carfax histories, and since I co-developed the Long-Term Quality Index and am a bit of a quality nut, I try to give them sound advice and tell them about the enthusiast forums that will help keep their cars on the road.

For me it's simple common sense. A simple mathematical formula for buying and keeping a car.

Eliminating uncertainty + full disclosure = A confident customer.

A lot of folks are perfectly happy with this. But a few misguided souls these days seem to be afflicted with this disrespectful and poisonous mindset that comes from fake reality shows like Pawn Stars and Hardcore Pawn.

Here were a few I met this past weekend. That one snarky customer who constantly lowballed me even after I respectfully told them no thanks. The parent who makes their overgrown child out to be a charity case, and then wants us to offer a discount just because their kid made some unfortunate life decisions. Parenting is hard. I get that. This one though in particular really grinds my gears because I have seen real hardship in this world that goes beyond first-world problems. Unless you're bleeding, starving or dying please don't come to a complete stranger like me with a sob story to cover up your crass cheapness. I can't afford that in my life.

The one that always has me scratching my head is that one customer who tells you, "that's all I have!" Then they offer more 15 seconds later only to be told once again, "Look, we don't charge bogus fees. The price you see online is what we will always sell the car for. If you want the car feel free to let me know."

I get that it's a generational thing and a media driven us-vs.-them attitude. I also get that crappy and overpriced cars have a different set of rules. What I don't get is disrespect for those you don't even know. Life's too short.

Am I getting old? Or is this world getting nuttier by the day?

 

[demarpaint]

Unfortunately the industry brought it upon themselves. I sold cars for a little under 4 years IIRC. I learned from the best, I won't bore you with my resume, other than saying I was a top salesman in all five dealerships I worked at. The dealers I worked for screwed their help as much as their customers which is why I left. Having said that savvy customers don't trust dealers, I don't blame them! I would continue what you're doing, savvy customers also know when they were treated fairly, and will share that. Lowballers will always lowball. I had no problems dealing with any of them.

 

[OilMagnate]

I feel like it's the industry you and I are in. Car sales have historically always been negotiable deals, and most people tell others they are dumb if they don't/didn't negotiate a better deal. Mechanic shops often mark up parts above what the customers themselves can get them for. If I sell auto supplies as an individual, even if I drop the price down to rock bottom COST from the beginning to ensure a quick sale and state clearly the price is firm (less than half of what the price is literally anywhere imaginable), I still get lowball offers for 50% less than my posted price. Everyone "HAS TO get a deal."

Part of it is the industry as a whole is largely too greedy, and the good ones suffer because of it. Doesn't matter if it's body work, mechanic work, sales, tires, detail, literally anything. Think of the tire and mechanic shops preying on female customers. Think of the fly-by-night hail repair tents. People are tired of getting screwed and are becoming more empowered to stand up to it, even when they aren't standing up to the right entity.

The other part is the terrible economy. Everyone thinks junk is worth gold when selling any item, and buyers think gold is worth junk prices.

I have never envied anyone in the car sales business. It's a rough job for exactly the reasons above. Nobody is ever pleasant and happy on either side. It's always a battle over money. Heck, even the employees just on one side aren't happy with their peers because it's a cut-throat business and they steal each other's money.

Just my half-awake thoughts...

 

[OilMagnate]

Here's another example: Why do many dealers charge almost $200 per hour for service labor? Why does the person actually doing the labor only make $20-40 of that? Why does that same person have to pay many thousands of dollars to furnish themselves with tools? Where does the rest of that ~$200 *actually* go?

I'm in the auto industry, and have lots of family in the dealer world, most in service. They've been in that field most of their life. Even I can't answer those questions, so even I balk at that kind of pricing.

Edit: I think my brain cells are finally waking up and I just had an epiphany: It all boils down to lack of honesty and transparency.

 

[demarpaint]

I feel like it's the industry you and I are in. Car sales have historically always been negotiable deals, and most people tell others they are dumb if they don't/didn't negotiate a better deal. Mechanic shops often mark up parts above what the customers themselves can get them for. If I sell auto supplies as an individual, even if I drop the price down to rock bottom COST from the beginning to ensure a quick sale and state clearly the price is firm (less than half of what the price is literally anywhere imaginable), I still get lowball offers for 50% less than my posted price. Everyone "HAS TO get a deal."

Part of it is the industry as a whole is largely too greedy, and the good ones suffer because of it. Doesn't matter if it's body work, mechanic work, sales, tires, detail, literally anything. Think of the tire and mechanic shops preying on female customers. Think of the fly-by-night hail repair tents. People are tired of getting screwed and are becoming more empowered to stand up to it, even when they aren't standing up to the right entity.

The other part is the terrible economy. Everyone thinks junk is worth gold when selling any item, and buyers think gold is worth junk prices.

I have never envied anyone in the car sales business. It's a rough job for exactly the reasons above. Nobody is ever pleasant and happy on either side. It's always a battle over money.

Just my half-awake thoughts...

Good points. I've dealt with it for over 40 years in my painting business, it's part of the game. Reality TV didn't help matters either. In my painting business I would rather sit home and make nothing than work for chump change. That strategy worked quite well, and my customers knew it. Having said that I'm happy to be at a point in my life to work for select customers, or per day for close business acquaintances.

 

[atikovi]

Just have the listed price 10 or 20 percent above the least you would take. It's not rocket science. For someone in the business as long as you say you are, you should have learned that by now. People feel better if they think that their negotiation skills resulted in a better price. Saturn had no haggle price dealers, and see where they are now.

 

[GMFan]

It sounds like you run a good and honest dealership. Kudos to you.

I think it’s probably the fact that outside of buying a home, a car is most people’s second most expensive life purchase, so there is a lot of emotion involved. Also, a lot of people are drama queens. Add in inflation in the used car market along with all the other things that happened over the past 4 years and people are more on edge.

 

[OilMagnate]

Just have the listed price 10 or 20 percent above the least you would take. It's not rocket science. For someone in the business as long as you say you are, you should have learned that by now. People feel better if they think that their negotiation skills resulted in a better price. Saturn had no haggle price dealers, and see where they are now.

And this is exactly why things are the way they are.

No honesty or transparency.

(Not calling you dishonest or attacking you in any way ati)

 

[atikovi]

And this is exactly why things are the way they are.

No honesty or transparency.

(Not calling you dishonest or attacking you in any way ati)

What's honesty or transparency have to do with posting a price? If you want dishonest sales practices, look at the countless retail stores that have 25% or 50% off sales. They don't mention that they RAISED the prices 30% or 60% BEFORE the sale to compensate. All big ticket items, cars, boats, real estate, etc. have fluid pricing. That just goes with the territory.

 

[John105]

I have owned a dealership for over 20 years and always kept my pricing structure painfully simple.

No haggling. No bogus fees. Tell the customer everything they will ever need to know so that they can make an informed decision.

We do everything we can to provide customers with the prior maintenance and Carfax histories, and since I co-developed the Long-Term Quality Index and am a bit of a quality nut, I try to give them sound advice and tell them about the enthusiast forums that will help keep their cars on the road.

For me it's simple common sense. A simple mathematical formula for buying and keeping a car.

Eliminating uncertainty + full disclosure = A confident customer.

A lot of folks are perfectly happy with this. But a few misguided souls these days seem to be afflicted with this disrespectful and poisonous mindset that comes from fake reality shows like Pawn Stars and Hardcore Pawn.

Here were a few I met this past weekend. That one snarky customer who constantly lowballed me even after I respectfully told them no thanks. The parent who makes their overgrown child out to be a charity case, and then wants us to offer a discount just because their kid made some unfortunate life decisions. Parenting is hard. I get that. This one though in particular really grinds my gears because I have seen real hardship in this world that goes beyond first-world problems. Unless you're bleeding, starving or dying please don't come to a complete stranger like me with a sob story to cover up your crass cheapness. I can't afford that in my life.

The one that always has me scratching my head is that one customer who tells you, "that's all I have!" Then they offer more 15 seconds later only to be told once again, "Look, we don't charge bogus fees. The price you see online is what we will always sell the car for. If you want the car feel free to let me know."

I get that it's a generational thing and a media driven us-vs.-them attitude. I also get that crappy and overpriced cars have a different set of rules. What I don't get is disrespect for those you don't even know. Life's too short.

Am I getting old? Or is this world getting nuttier by the day?

There is this sense in business called, honor.

If a car dealer says, do I deserve to make any money, I respectfully smile and leave.

It sounds like in your business model, that likely would never need to be said.

Try buying a diamond. With a GIA report. It’s a very unpleasant experience, more than a car or house or hvac.

I found a jeweler who said. My price to you is wholesale plus 20%. Not rocket science. Nobody offers this price and I would like you to verify what I’m saying, although, you don’t have to mention us, because we’re not liked on the Row since we take a smaller profit.

At the time, no other shop would even counter when I said what I wanted at that price. Also, other stores were telling me you don’t need GIA. Hahahahahahahahahaha

So if a vendor is legit AND I can see that’s the case, I want to part with my hard earned money with that vendor. And return.

 

[dnewton3]

Life is about choices, for everyone.

I, for one, would prefer to have an honest up-front dealer. In today's world, it's not hard at all to find the reasonable cost of any product via the internet. Vehicles are particularly easy to find regional pricing structures, out-the-door costs, rebates, dealer hold-backs (if new), etc. So when I buy a vehicle (or any product), I'm already informed about what a "fair" price is.

There are always games one can play with pricing and costs; money is fungible. I recently bought a car that the dealer would not budge on the stupidly high "doc" fees, but they did come down several hundred dollars of their already reasonable discount from MSRP. This is just a type of shill-game; money is moved around from pot to pot.

It's no different than the discussion of taxation (not politics). Some states have high sales taxes but no income tax (such as TN). Other states have lower sales taxes but higher income taxes (such as IN). Still other states have higher property taxes. At the end of the day, it takes "X" dollars to run the state. One way or another, the state has to collect $X to fund the projects. They intend to collect "X" dollars one way or another ...
And that's how vehicle sales plays out. Some dealers prefer to be honest and just say "I sell a flat percent over my cost". Others say "I sell at MSRP; never above or below." Still others say "We negotiate; what's your offer - expect a counter offer."

Some folks prefer honest, simple pricing. Others prefer the thrill of the hunt; they want to feel as though they got a special "deal" via haggling. At the end of the day, it takes two to tango. Sometimes, though, consumers and sellers don't seem to be doing the same dance, as it were.

There is no right or wrong way to do this. It only takes an agreement to make the deal happen, however that deal is reached. If the deal is not reached, well, that's OK also.

This is how the free-market enterprise system works.

 

[SC Maintenance]

Having been a hiring manager years ago, I came to the conclusion that there are a lot of idiots out there. Even successful people can be idiots. You need to figure out how to ignore them, because its getting worse not better. Its why I sent my kids to public school rather than private - figure out how to survive early.

I think it getting worse is a function of both social media, but also the idea of entitlement. Look at the petty theft increases. Those people believe they deserve something without working for it, and have no problem taking it from someone else without remorse. Its all me -me - me.

I like your sales strategy. I negotiate B2B contracts as part of my job. I have the ability to negotiate a fair car price. However the best vehicle transaction I ever had was a new car purchased e-price and showing up to get it. The last car I bought was supposed to be that way also, but when we got there my wife didn't like the color, so then things changed, and the negotiations began. I actually ended up doing better, but I would honestly have rather gotten in my new car and drove away.

Keep up the good fight.

 

[demarpaint]

Just have the listed price 10 or 20 percent above the least you would take. It's not rocket science. For someone in the business as long as you say you are, you should have learned that by now. People feel better if they think that their negotiation skills resulted in a better price. Saturn had no haggle price dealers, and see where they are now.

Yep! Everyone wants a deal! A good salesman's job is to sell an item for as much as they can get, a good consumer wants the best price they can get. A sale lies somewhere in the middle. A good salesman knows a buyer from a tire kicker, that's qualifying a customer. Many times I would tell people if you're truly interested in buying the car, make a reasonable offer. I have a family to feed and I will work for you with my boss to get you a price you're happy with. If they lowballed me I'd let them know right then and there. Many cars rolled that way. That's only after I qualified the customer and I was reasonably certain they were a buyer. There are hundreds of ways of sizing up a customer and making a deal.

 

[Fla]

I have owned a dealership for over 20 years and always kept my pricing structure painfully simple.

No haggling. No bogus fees. Tell the customer everything they will ever need to know so that they can make an informed decision.

We do everything we can to provide customers with the prior maintenance and Carfax histories, and since I co-developed the Long-Term Quality Index and am a bit of a quality nut, I try to give them sound advice and tell them about the enthusiast forums that will help keep their cars on the road.

For me it's simple common sense. A simple mathematical formula for buying and keeping a car.

Eliminating uncertainty + full disclosure = A confident customer.

A lot of folks are perfectly happy with this. But a few misguided souls these days seem to be afflicted with this disrespectful and poisonous mindset that comes from fake reality shows like Pawn Stars and Hardcore Pawn.

Here were a few I met this past weekend. That one snarky customer who constantly lowballed me even after I respectfully told them no thanks. The parent who makes their overgrown child out to be a charity case, and then wants us to offer a discount just because their kid made some unfortunate life decisions. Parenting is hard. I get that. This one though in particular really grinds my gears because I have seen real hardship in this world that goes beyond first-world problems. Unless you're bleeding, starving or dying please don't come to a complete stranger like me with a sob story to cover up your crass cheapness. I can't afford that in my life.

The one that always has me scratching my head is that one customer who tells you, "that's all I have!" Then they offer more 15 seconds later only to be told once again, "Look, we don't charge bogus fees. The price you see online is what we will always sell the car for. If you want the car feel free to let me know."

I get that it's a generational thing and a media driven us-vs.-them attitude. I also get that crappy and overpriced cars have a different set of rules. What I don't get is disrespect for those you don't even know. Life's too short.

Am I getting old? Or is this world getting nuttier by the day?

The world is definitely getting nuttier by the day! Look at the entire WOKE movement as Proof of that! That said, people are so used to be screwed over by car dealers that they expect all of them to be that way so they go into the dealerships from the very start expecting to argue over every price, fee and hidden charge. You're a victim on the unscrupulous business practices of the Stealerships just as much as most customers are.

Don't even me started about people that make POOR life choices and then expect the World to support them and to give them anything that they want! Every time that I hear another TV news story about "single mom", "multiple kids", "NEEDS xxxxx", I want to puke!

You need to tell both types of people "Sorry, I can't help you. Go see Billy Bob's Buy here, pay here down the street. He'll fix you right up."

 

[BMWTurboDzl]

I have owned a dealership for over 20 years and always kept my pricing structure painfully simple.

No haggling. No bogus fees. Tell the customer everything they will ever need to know so that they can make an informed decision.

We do everything we can to provide customers with the prior maintenance and Carfax histories, and since I co-developed the Long-Term Quality Index and am a bit of a quality nut, I try to give them sound advice and tell them about the enthusiast forums that will help keep their cars on the road.

For me it's simple common sense. A simple mathematical formula for buying and keeping a car.

Eliminating uncertainty + full disclosure = A confident customer.

A lot of folks are perfectly happy with this. But a few misguided souls these days seem to be afflicted with this disrespectful and poisonous mindset that comes from fake reality shows like Pawn Stars and Hardcore Pawn.

Here were a few I met this past weekend. That one snarky customer who constantly lowballed me even after I respectfully told them no thanks. The parent who makes their overgrown child out to be a charity case, and then wants us to offer a discount just because their kid made some unfortunate life decisions. Parenting is hard. I get that. This one though in particular really grinds my gears because I have seen real hardship in this world that goes beyond first-world problems. Unless you're bleeding, starving or dying please don't come to a complete stranger like me with a sob story to cover up your crass cheapness. I can't afford that in my life.

The one that always has me scratching my head is that one customer who tells you, "that's all I have!" Then they offer more 15 seconds later only to be told once again, "Look, we don't charge bogus fees. The price you see online is what we will always sell the car for. If you want the car feel free to let me know."

I get that it's a generational thing and a media driven us-vs.-them attitude. I also get that crappy and overpriced cars have a different set of rules. What I don't get is disrespect for those you don't even know. Life's too short.

Am I getting old? Or is this world getting nuttier by the day?

There is no trust on the side of the customer. For their entire lives dealerships have been trying to pull one over on them or people they know. Consequently customers like sales people will use every trick they can to get a better price whether that is playing the sympathy card, as in your example, or something else. I don't foresee the industry moving towards fixed pricing because the automakers need to keep their factories at capacity which means dealerships need to take on inventory. Saturn didn't do so well.

 

[SC Maintenance]

q

Saturn didn't do so well.

They actually did. There fixed pricing was one of the things customers liked most. Its also worked for Carmax and Carvana more recently.

Some customers prefer convenience over price. There is room for both models.

I'll see if I can find some links on Saturn and post a couple.

Edit - here you go - might be behind a paywall - but I think Forbes gives you a couple free. Pertinant parts:

How GM Destroyed Its Saturn Success

A lesson in how to win at innovation in even the most traditional company--and then how to crush that innovation.

www.forbes.com

"The problem, GM and UAW executives came to realize, was the new organizational culture that had been born in Spring Hill. Saturn people didn't think of themselves as GM subordinates or as UAW card carriers. They were Saturn team members with a common mission."

"Three times the UAW International came to Saturn's Spring Hill, Tenn., production facility with its international contract in hand and told Saturn's workers to vote for it. Three times those workers voted no and clung to their memorandum of agreement."

"The only way to overpower such a culture is to draw and quarter it. GM, with the UAW's obvious blessing, broke up the Saturn empire. Production was taken out of Spring Hill and divided among other GM plants. Saturn's workers, now only one small piece of a larger population, became part of the larger GM workforce in their new locations and subject to the UAW International contract."

 

[AdmiralYoda]

My opinion no way reflects all dealerships...just the ones I've dealt with. Every time I've gone to a dealership it has always been a hassle and something was always off. And this is with the new car dealerships...nevermind the used car dealerships.

Two weeks ago I went to look at a used 2021 Chevrolet Colorado ZR2 at a Ford dealership. They encouraged me to do the KBB cash offer online to save time for my trade in. Took pictures and the offer came in at $1,400 which I thought was fair. Made an appointment to see the ZR2 and went there. Mind you this was over an hour away from me house.

I got there and went to the reception desk and said I was here to see a 2021 Chevrolet Colorado ZR2 and the person at the desk "we don't have any Colorados...we sold that one over a week ago". Sensing my frustration the sales manager said "oh no, that's a mistake...it is out back", sat me down and worked some magic and suddenly found the ZR2 and told one of his salesman to bring it out front.

45 minutes later and countless attempts to sell me new and used F-150's the sales manager said... "I'm sorry but bad news...we sold that ZR2 20 minutes before you came in, but we can give you a great deal on a used F-150!" And I left. There went about 3.5 hours of my day.

Also while I was waiting they took a look at the used car and I was told the KBB cash offer is just an estimate and subject to further inspection... and they offered me $400. What was the point of taking 20 pictures and identifying all the flaws for an hour online then?

That truck stayed on the website for another two weeks. Every time I've gone to a dealership it has been a similar experience.

I went to Carmax and bought a no-haggle price 2021 GMC Canyon AT4 with less miles the next day. I probably could have found one at a used car dealership for a bit less after haggling but I've been burnt too many times. No-haggle pricing or forget about it.

 

[Skippy722]

I’d buy a car from your dealership in a heartbeat without any complaints.

When we bought our van I found one at Carmax for $21,500 and e-mail negotiated one for $18,500 at a dealer (Carmax was a 1 owner, the other an CPO but former enterprise rental vehicle). Had I known I’d have been stuck at the frickin dealership with a 3 year old and a 1.5 year old I’d have HAPPILY paid the extra $3,000 for what I know is at most a 2 hour experience (including a decent test drive) at Carmax vs the friggin 6 hours we spent at the dealer.

Similar story with the truck, but I was hell bent on a new one and it was kind a spur of the moment type thing so that one is on me.

Caliber was another similar story. Listed online for $10,000, get to the dealer and it became “well it’s listed at $12,000” Okay fine, we’ll go to carmax right down the road since you won’t honor your online price, they’re only $1,500 more. Okay we’ll do $10,000. Great! And then the finance games begin… also took entirely too long.

But yeah, people are crazy and some people just love arguing…. er negotiating.

 

[b_b]

the only time ive had a positive experience at the dealership was when i bought a high volume model at a high volume dealership. they were lower than anyone else and had all the paperwork ready to go to complete the sale when i arrived. it was extremely simple.

 

[Pew]

It sounds like you run a tight ship but you work in an industry/career where generally the public tends to see dealerships as stealerships, and salesmen as con artists regardless of their honor. The attitude towards dealerships is very similar on this forum [as an example].