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Price negotiating a thing of the past??

Old 10-23-2007, 06:35 AM
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Default Price negotiating a thing of the past??

Interesting article regarding the controversy of price negotiating with automobiles and that fixed pricing may be the future. Wonder how long this will take to spill over to boats? Whats the THT perspective on this....Dont hold back...Lets get it out in the open.

http://articles.moneycentral.msn.com...FreeZones.aspx
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Old 10-23-2007, 08:12 AM
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Default Re: Price negotiating a thing of the past??

I can't see it happening long term in the auto market.

We're conditioned as consumers to negotiate those types of purchases.

The dealerships are owned by independent business people who implement their own strategies.

The dealerships will not stand pat on fixed price for what is essentially exactly replaceable at another dealership (I mean a white Camry is a white Camry) if the other dealer decides to negotiate -- and there will always be those who will negotiate to build their volume. Now if the automakers start to strengthen the reward on no-haggle, they might have a case.

BTW, the guy who said that haggling "was un-American," ain't from America. How can you say at the beginning of the article that we used to haggle on horse trades back in the day, but haggling is not part of our culture?

From stock traders to merchants to real estate to baseball player contracts, we prove day-in and day-out that we're all about the deal just like other cultures.
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Old 10-23-2007, 09:59 AM
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Default RE: Price negotiating a thing of the past??


Fixed pricing means you get to haggle over the value of your trade in.
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Old 10-23-2007, 10:34 AM
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Default RE: Price negotiating a thing of the past??

John1 - 10/23/2007 12:59 PM


Fixed pricing means you get to haggle over the value of your trade in.
Yup. Good point.
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Old 10-24-2007, 06:40 AM
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Default Re: Price negotiating a thing of the past??

"Consultant Rikess says salespeople in one-price stores make $50,000 a year, vs. $35,000 for those on commission. "

Anyone who buys in a "no negotiation" dealership or is getting burned according to this. Therefore it will be contrary to market economics to get away from negotiating vehicle price. I guess I just don't understand the logic the writer of the article is applying. He says it is likely dealers will discontinue price negotiation and supplies evidence to the contrary...
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Old 10-24-2007, 10:18 AM
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Default Re: Price negotiating a thing of the past??

starmonk - 10/24/2007 5:40 AM

"Consultant Rikess says salespeople in one-price stores make $50,000 a year, vs. $35,000 for those on commission. "

Anyone who buys in a "no negotiation" dealership or is getting burned according to this. Therefore it will be contrary to market economics to get away from negotiating vehicle price. I guess I just don't understand the logic the writer of the article is applying. He says it is likely dealers will discontinue price negotiation and supplies evidence to the contrary...

I think what it boils down too is this....Less time to make the sale equates to more sales....along with the increase of repeat customers and the increse in service department revenue.
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Old 10-24-2007, 10:29 AM
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Default Re: Price negotiating a thing of the past??

price fixing....hmmmm,, something to think about!
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Old 10-24-2007, 10:41 AM
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Default Re: Price negotiating a thing of the past??

Take it from a X auto dealer, the future of the automotive business is as follows: First of all, the only reason the manufacturers have dealers is not because of an outlet for them to sell their product, it is because of service. I predict within the next 20 years, or less, the manufacturers will be selling their vehicles direct from factory stores located in larger cities throughout the United States. Then, after the sale, when you need warranty service on the vehicle you purchased from the factory store, you will bring it to a factory service center and not back to the place of purchase. For example, if you purchased a Chevy, Pontiac, Buick, GMC, Saturn, etc. from the General Motors Factory Store, your warranty would be handled at the General Motors Service Center. Same for Ford, Dodge, etc. Sound scary, but, I truly believe this will happen in the not too distant future. Secondly, as far as price negotiating, I predict that the prices will be reduced overall, but, will be fixed. That way, you just as well purchase your new vehicle at the closest factory store, because it would do no good to shop around for that new vehicle, the price would be the same no matter where you go. Trade ins would be handled separately. Look around, what is left in retail that is negotiable, not much. Just my outlook on the automobile business from my 25 + years of experience. Doc of the Bay
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Old 10-24-2007, 10:44 AM
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Default RE: Price negotiating a thing of the past??

Good post Doc..
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Old 10-24-2007, 11:26 AM
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Default Re: Price negotiating a thing of the past??

I myself don't see your logic Doc. Right now as it stands there basically isn't a dealership which makes money off their front end (new vehicle sales) or used vehicles as far as that goes. So why would the manufacture pick up the loss of carrying the debt? If the manufacture picked up the expense of carrying the non-sales wouldn't the price of the vehicles HAVE to go up?

IMHO sales are sales and business owners are business owners.....business owners will always find a way to be one step over their competition. ~~~......here buy my vehicle and I'll give you and your wife a three day vacation in sunny Florida...... .


I'm not surprised to read such garbage. It's like the real estate industry up here. With the computer so wide spread the real estate people expect the serious buyer to do all the work........the sales person just sits on their fat ass_ and waits for the buyer to make a purchase so the sale person can rake in their 10 - 15 - 20k commission! Isn't it the way things work...pay me more money and expect me to do less work.
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Old 10-24-2007, 01:09 PM
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Default Re: Price negotiating a thing of the past??

I have recently been looking at buying a '00-02 BMW Z3 as a play car. So looking at all of the on line price guides, I thought I had a pretty good idea of what one would be worth. I haven't been able to find one for sale from a private owner (within a decent distance) that had the options and color I wanted.

I have been able to find a few at local car dealers, but have been turned down by no less than 3 dealers on 3 different cars, having offered them clean, full retail value for their car. Only ONE dealer ever even bothered calling me back, but that was in hopes that I might buy a completely different brand and style of car from them. Their idea of price negotiation was to take as little as $200 off asking price(dealer 1) to as much as $800 off asking price (dealer 3). And keep in mind, these asking prices were already several thousand above what any of the on-line pricing guides said they should be.

Maybe it is the model/style of the car I am looking for. Maybe the pricing guides were way off (I doubt it though). So is negotiating the cost of a car--even a used car--a thing of the past? Apparently, in some areas of the country, it is. Often when I see what people SAY they pay for something on here, I seriously question if what they are saying is true.
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Old 10-24-2007, 01:29 PM
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Default Re: Price negotiating a thing of the past??

Joe - 10/24/2007 4:09 PM

I have recently been looking at buying a '00-02 BMW Z3 as a play car. So looking at all of the on line price guides, I thought I had a pretty good idea of what one would be worth. I haven't been able to find one for sale from a private owner (within a decent distance) that had the options and color I wanted.

I have been able to find a few at local car dealers, but have been turned down by no less than 3 dealers on 3 different cars, having offered them clean, full retail value for their car. Only ONE dealer ever even bothered calling me back, but that was in hopes that I might buy a completely different brand and style of car from them. Their idea of price negotiation was to take as little as $200 off asking price(dealer 1) to as much as $800 off asking price (dealer 3). And keep in mind, these asking prices were already several thousand above what any of the on-line pricing guides said they should be.

Maybe it is the model/style of the car I am looking for. Maybe the pricing guides were way off (I doubt it though). So is negotiating the cost of a car--even a used car--a thing of the past? Apparently, in some areas of the country, it is. Often when I see what people SAY they pay for something on here, I seriously question if what they are saying is true.
Used cars -- sorry, pre-owned -- will always be a tougher negotiation than new because the car itself is unique. There aren't that many 2005 white Camrys with leather and 32k miles. So the dealer knows that they don't need to be as flexible -- especially in the CPO arena where the car is in good shape and has the warranty backing. A new Camry, go to the next town and get the exact car. Leverage shifts a little to the buyer.

Now couple that with you looking at a Z3 and it gets ratcheted up a notch.

Had the same experience with a '01 540i. Car had 19k miles and was clean. Edumnds and KBB.com said it was worth $24k. They were asking $30k. I offered $24. They countered with $27k and a bath on my trade. I walked.

But the dealer held the cards because it was going to be hard to find that car, that condition, those miles. And he knew it.

BTW, car was sold less than 2 wks later.

Negotiation is ... well, negotiable.
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Old 10-24-2007, 01:57 PM
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Default Re: Price negotiating a thing of the past??

It could be the car, i guess. But even at clean full retail, i'm certain they are making money because even though they are selling it at a higher asking price, I'd bet they didn't put more than average trade value into it. And how much in demand is a 6-8 year old 2 seat convertible? I really thought offering full retail was doing something. Apparently it wasn't. Oh well--I don't have to buy one, and can just live without it.
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Old 10-24-2007, 04:08 PM
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Default Re: Price negotiating a thing of the past??

I am currently looking for a new to me vehicle and the MO has been the same. I will continue to hold me ground though. I have never had a dealer give me more than trade in on a car, have never really heard of it either. The price guides are usually compiled from actual sales much like home appraisals and should be accurate in your area unless the vehicle is very unusual. I believe that it is a game to them and sometimes they get caught up in negotiating and lose sight of the selling cars bit, much like getting over excited when bidding on ebay or such. Recently after two months of playing games with a dealership on a truck they sent it to auction and sold it for $1000 less than me initial offer. Business wise I thought it made no sense to take less money after holding it for two months.
But my favorite is when you bring a pocket full of cash to negotiate a paid in full deal and the salesman wants to discuss how much I can afford a month!
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Old 10-24-2007, 05:23 PM
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Doc of the Bay - 10/24/2007 10:41 AM

Take it from a X auto dealer, the future of the automotive business is as follows: First of all, the only reason the manufacturers have dealers is not because of an outlet for them to sell their product, it is because of service. I predict within the next 20 years, or less, the manufacturers will be selling their vehicles direct from factory stores located in larger cities throughout the United States. Then, after the sale, when you need warranty service on the vehicle you purchased from the factory store, you will bring it to a factory service center and not back to the place of purchase. For example, if you purchased a Chevy, Pontiac, Buick, GMC, Saturn, etc. from the General Motors Factory Store, your warranty would be handled at the General Motors Service Center. Same for Ford, Dodge, etc. Sound scary, but, I truly believe this will happen in the not too distant future. Secondly, as far as price negotiating, I predict that the prices will be reduced overall, but, will be fixed. That way, you just as well purchase your new vehicle at the closest factory store, because it would do no good to shop around for that new vehicle, the price would be the same no matter where you go. Trade ins would be handled separately. Look around, what is left in retail that is negotiable, not much. Just my outlook on the automobile business from my 25 + years of experience. Doc of the Bay
I agree. The same thing is happening in the Ofiice Equipment (copier)industry
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Old 10-25-2007, 10:22 AM
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Garett, I agree with you that the dealership does not make any money of the front end (the actual sale of the vehicle). This is due to the fact that competition will not allow the dealership to make a big profit on the sale of the vehicle, with a few exceptions. So, the dealer must make his profits on the back end (the after the sale items: financing, life and accident and health insurance on the loan, extended warranties, added accessories, etc.). The maunfacturers would be able to turn a profit with factory stores due to a set price and no competition. I will disagree with your statement that the dealer does not make money on used vehicles. This is where a considerable amount of money is made, especially when a used car is traded on a new car, then that used trade in is sold and another trade is taken in with that sale and so on. Garett, you refer to my comments a garbage. Well, the future of the automobile industry will prove if my predictions are reality or not. Time will tell. Thanks for your opinion, Doc of the Bay
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Old 10-25-2007, 10:30 AM
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Default Re: Price negotiating a thing of the past??

Doc, agreeing with your point about used cars...in my example above with 540i, I'm betting the dealer made a ton of money.

I had hit Galves (thanks for the tip THT) and they probably gave $22k for the trade. Let's say I accepted the deal at $27 with my car (which they valued at $5k). They get $22 cash from me which offsets their outlay. Plus they have my car which dealer retail comps at the time was between $10-11k. So if they were to flip it to a wholesaler anything they got was gravy -- pure profit.

Used cars/trades is where they make a ton of margin.
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Old 10-25-2007, 10:36 AM
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You are correct mb. There is a bowl full of gravy made on used vehicles at automobile dealerships. Thanks, Doc of the Bay
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