Lexus USA Experimenting with Negotiation-Free Dealership Pricing

Posted by Michael on August 6th, 2015

Lexus is currently piloting a no-haggle pricing program with twelve dealers in an effort to improve customer satisfaction. The move, which aims to provide greater transparency for consumers, would be a first in the luxury segment — from Wards Auto:

“We’re not going to force this down anybody’s throat, but we think the marketplace is so transparent it seems like a logical step to us,” Bracken tells WardsAuto after his speech. He says if the program goes national not every dealer will be forced to offer it.

No-hassle car-buying already is in place, and has been for years, at Lexus’ sister brand Scion, where it is called Pure Price.

Negotiation-free pricing at Lexus will work like this: A buyer comes into the showroom, pays a price the dealer has selected for the desired vehicle, gets a walkaround of the vehicle’s features and benefits and then works with that same dealership employee throughout the entire transaction.

The 12 participating dealerships were not announced, but are positioned in both small and large markets. The pricing itself will not be set nationally, with dealerships able to make adjustments based on local conditions.

While Lexus hopes all 236 dealerships across the USA will eventually adopt negotiation-free pricing, the program will not be mandatory.

Along with the no-haggle pricing announcement, Bracken also announced two other interesting tidbits:

  • Lexus will be providing customers with “a more personalized experience” through a program called The Lexus Difference. No additional details were provided.
  • Lexus recently launched a “Ladies Night Out” program where dealers invite female customers into their stores to learn about technology and functionality of their vehicles.
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Comments
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    Levi
  • August 6, 2015
"Ladies out Night" is nice. Target the female, increase brand appeal, sell more, spend on halo cars (Lexus F), get the male interested, increase brand appeal, sell more.
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    Tinhinnh
  • August 6, 2015
Pure Pricing hasnt been a big hit for Scion, why are they implimenting it to Lexus?
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    Mr. Pontiac
  • August 6, 2015
Given that the price of the vehicle is only one part of the total transaction, I doubt if this will eliminate the for customers need to compare total costs among several dealers. Many, if not most buyers have a vehicle to trade in and most dealers have various add-on charges and those will obviously vary, especially trade-in allowances. Toyota Canada tried fixed prices in Ontario a few years ago but ran afoul of price-fixing laws and had to abandon it.
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    MC Witz
  • August 6, 2015
From a sales consultant's point of view, I think this should have been done nationwide years ago. MSRP on a Lexus is already a tremendous value (proven). One price on the best luxury car on the market. Pick the best vehicle for you and be done...can't get any simpler than that. I don't like the vague interpretation that they are broadcasting. It still leaves too much room for confusing the customer.
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    rayaans
  • August 6, 2015
Not going to work at all. Its the stupidest strategy in a car showroom in all honesty. No-one buys a car unless they feel they're getting a good deal - even if they discount the car by $250 it seems like they've given you a deal and makes you feel like theyve done their most at trying to get you a good price
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    Mark ONeil
  • August 6, 2015
No such thing as one price, when a trade in is involved, also PAY the salesman!! Been in the business since 1988, currently at a Lexus store for 13 years. GM and Kia etc. pay big spiffs on EVERY car sold. I am a professional and it is sad to say that I would rather sell a used Lexus, more profit for me. Lexus gives big money to stores that meet their quota on new, but they don't pass it on to the sales force!! Hire professionals like me, watch their CSI turn around! Some of our sales people we have are not qualified to sell a Chevy!
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    Tinhinnh
  • August 6, 2015
Wealthy people likes a good deal too (haggling). This aint gonna work!
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I like this idea. Most people aren't going into a dealer looking forward to "dealing" with the salesperson and finance person. Now, if only Lexus could change the luxury vehicle game by adopting direct sales to customers like Tesla. Now THAT would be amazing.
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    Bulldog 1
  • August 8, 2015
I buy my cars from the number one volume Lexus dealer in the country and I deal exclusively with a VIP manager. I never have to deal with anyone out on the sales floor. I've purchased six vehicles in the last seven years and all of them have been deeply discounted. My two current 2015's were purchased two weeks apart during the month of May and the F Sport was thousands behind MSRP. A one price take it or leave it CarMax experience will unquestionably end my relationship with Lexus. I doubt anyone reads this from Lexus, but if they make that mistake, they will lose their loyal base customers like my family who have purchased eight Lexus vehicles in the past nine years. I've worked in this industry and from both sides of the equation, no luxury automobile manufacturer would survive the implementation of such a strategy over the long term.
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    Mohammed Taha
  • August 9, 2015
We already have this here in the UAE. Probably because the dealer here is a Toyota and Lexus monopoly. However, something like this, in a country with privately owned dealerships, will eventually lead to price fixing. I am generally against dealerships selling cars. I think cars should be sold by the manufacturer. If I'm not happy with my car, do you think the dealership cares? Not as much as Lexus would. There is far too much disconnect between car manufacturers and their customers. What needs to happen is we need the manufacturers on the ground interacting with the customers.

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