Negotiation-Free Pricing Works for World’s Largest Lexus Dealership

Lexus JM Lexus Plus

WardsAuto has an update on the Lexus Plus negotiation-free pricing program and how it’s working at JM Lexus, the brand’s largest volume dealership in the USA:

“Anybody that’s bought a car from us, I haven’t heard a discouraging word at this point,” [JM Lexus vice president and general manager Jim] Dunn tells WardsAuto in an interview. “As I tell them why we are doing this and what are the benefits for you, they understand it’s time to really do something different.”

“We see if they’re not going to have to go to five or six different dealerships anymore, and they’re really only shopping one, or up to one-and-a-half stores these days, that the consumer wants something different. And we’re listening.”

Dunn says his fellow Lexus dealers are watching and waiting, but he thinks they will opt for Lexus Plus eventually.

“The guys in my (dealer) group, they know at some point it’s going to be incumbent upon them to do the same thing,” he says.

Lexus USA vice-president of marketing Cooper Ericksen also addresses the issue of non-negotiable pricing in a large market like Southern Florida:

“(Undercutting) has happened, it will happen. But again the real value proposition comes in where ultimately a customer is going to make a decision: Is it worth it for me to go dealer-to-dealer, to call and to email and to text, and to negotiate and spend all the time to go to all these different dealers looking to save a small amount of money?”

He notes every dealer pays the same amount for a vehicle and has the same amount of profit margin, so if Lexus Plus models are pre-negotiated at market-based prices, the gap between what they can be sold for and what a buyer will pay a Lexus Plus store is small.

Meanwhile, Dunn believes JM Lexus’ “world-class service” will trump any small pricing difference between it and other South Florida Lexus dealers.