Lexus Testing No-Haggle, One-Price Selling

May 9, 2016
steve@automotive.ventures

Lexus is testing no-haggle, no-negotiation car buying at 11 of their dealerships in an effort to make the buying process faster and less stressful.

A handful of Lexus dealers will eliminate the back-and-forth price-negotiating process by having a non-negotiable selling price for each new and used vehicle, as well as service packages.

Each vehicle will have the sticker price along with the no-haggle price posted on the vehicle’s window. The new sales program, called Lexus Plus, will kick off next month.

“We feel it is an opportunity to create a different type of experience, where basically consumers will have a negotiation-free shopping experience,” says Matt Kaleba, Lexus national manager for future retailing and incentives. “So all pricing will be upfront, that is for sales and service, and then you will have a single person to help you through the sales experience.”

Eleven of their 236 dealers will participate in the pilot Lexus Plus program. The first dealer will start selling vehicles through the no-haggle process beginning in mid-May. The remaining 10 dealers are expected to launch Lexus Plus by mid-July.

Lexus Plus will be offered to other dealers if the program is successful – and the plan is to allow each dealer to decide whether they will participate. Still to be determined is whether the term “upfront pricing” or “negotiation-free pricing” will be used to identify Lexus Plus pricing in advertising.

While Lexus Plus will speed the sales process, dealers adopting Lexus Plus won’t necessarily have the lowest selling price on a particular vehicle in their geographic market.

“There are some people where the price is the absolute most important thing and they are willing to go dealer-to-dealer and spend their time trying to cut the best price they possibly can,” Kaleba said. “But we think there are more and more consumers now that see the value in an upfront price and the value in their time.”

He expects Lexus Plus to eventually be adopted by other dealers. No time frame was given.

One change under Lexus Plus will target the number of dealership personnel coming in contact with the customer.

Instead of dealing with several people during the typical sales process, Kaleba said one sales consultant will be with the customer “from A to Z, from beginning to end,” helping to select the vehicle, review the payment options and deliver the keys to the buyer.

“This model will allow consumers to have a relationship with a person within the organization on the sales side, an advocate if you will, one person who has your best interests in mind,” Kaleba said in an interview. “We think it is certainly something that will be a differentiator in the market.”

Kaleba said it is difficult to estimate how much time will be eliminated with this no-haggle, no-negotiation selling policy.

“I think J.D. Power did show that it can take two to four hours to get through the sales experience,” he said. “We think this will help cut that time down dramatically. Negotiation-free can save so much time and so much stress by just having a price posted and not having to go back and forth.”

Lexus is not the first automaker to try no-haggle, no-negotiation selling. General Motors’ ill-fated Saturn brand launched one-price selling in 1990.