Should vehicles just have a set price?

[disneysteve]

this breed another socialism view of things. This is hard to do especially in the competitive market like the auto industry. Not all cars are created "equal".

Isn't socialism when the government controls everything? I'm not suggesting that the government set the prices but that each individual dealer sets the prices. That isn't socialism at all. The dealers would be free to charge whatever price they wanted to charge but just pick a price and stick with it.

if the product is sold by a salesman, there is negotiating room.

I would modify that to "if the product is sold by a salesman who works on commission". Not all sales people do. Its been my experience over the years that it is the commission that creates wiggle room in the pricing. If the salesperson is willing to take a smaller commission to make the sale, he will lower the price. I've always preferred shopping at places where the sales staff is salaried and not commission-based.

I remember years ago I was in a stereo store and asked a salesman how much a particular item was (nothing had price tags). His response was, "Are you buying it today?" I walked out and never returned. If you can't tell me how much the item is, I'm not interested in buying it.

[segmond]

Jim, do you have any idea why autos are the only item that get sold this way? The system isn't set up to haggle at the supermarket, the department store, the dry cleaners or the restaurant. How did it come to be that cars get sold through negotiation? Has it always been that way? Did Henry Ford sell his Model Ts that way?

By the way, there are dealerships (besides Saturn) that do fixed pricing.

autos are not the only things, you can go to a department store and negotiate the price off a TV, fridge.

I have negotiated the price of a toll booth a few times, and sometimes didn't have to pay. I negotiate price at supermarket/stores when I go to buy food items, how? don't go to walmart, go to a smaller store, if you can talk to the owner, they are always willing to give you a discount. If I go to buy a pizza and it's $16, I always say things like, I have only $15, and you will be surprised, most times than not, they will forget that $1.

You can negotiate cost of taxi-cab, your haircut.

There is a book, "You can negotiate anything" by Herb Cohen, read it.

[disneysteve]

I retract my comment about things not being negotiable.

You've all pointed out various things that are, and reminded me of the same. There have been numerous times where I spoke to a store manager or owner to adjust a price, particularly if I was placing a large order. And, of course, there have been times when I paid cash to get a discounted price.

As Emily Litella always said, "Never mind."

[Thriftina]

Ah, one of the many reasons I deal with repo lots. The cars there are already thousands of dollars below the NADA bluebook values.

To those who are good with negotiating- what do you say? How do you know for sure you're getting a deal?

[GREENBACK]

A few things have been mentioned here that can be negotiated but not routinely. I don't think the manager of a dept. or grocery store expects that a large percentage of people walking thru the door are going to haggle over price. Car dealers expect most of their customers to do this and it's reflected in artificially high sticker prices.

One item that is haggled very similarly to cars are firearms. This is especially true in more rural areas.

[tripods68]

Isn't socialism when the government controls everything? I'm not suggesting that the government set the prices but that each individual dealer sets the prices. That isn't socialism at all. The dealers would be free to charge whatever price they wanted to charge but just pick a price and stick with it.

That's what "Tier" pricing is all about. You pick the price model/option you want. That is a known price ahead of time when you go website like Honda or Nissan and select specific models and options.

The problem of the fixed pricing concept and why it wouldn't work, it doesn't allow dealers to expand profit margins based on market conditions (ie, inventory demand). All dealerships have carrying-cost. The longer the cars seats on the lot, the more it cuts in dealearship profits. They either have to discount heavily or sell it at a invoice price which by the way is a loss. GM for instance has offered millions of rebate in the past and will continue to do so unless BK, so dealership can entice consumer to spend. That's good for everyone. But that losses have to be recovered somewhere somehow. For instance, if they are making profit on certain models they probably won't discount those models (remember Prius last summer). To balance the carrying cost vs profit, some dealers only carry certain profitable models. This time around green like hybrid are good, but not so much on gas-gazzling SUVs especially if consumer expect higher gas prices in the next year or so. It's all about the competition. Of course you already know that

Actually most dealerships sees the greater profit on servicing cars.

[Multima$tery]

The thing is that Cars and other Big Ticket items will likely always be subject to haggling. It can't be compared to regular shopping like going to Walmart. The auto industry is a Highly competitive commi$$ion driven industry. If they just spit out set prices then there would be no need for car salespeople. It would just be a retail store like Walmart, and that's not gonna happen with Big Ticket items like cars. There's just too much money at stake.

True it can be unfair to people who don't know the first thing about negotiating/ haggling - but a lot of things in life are not fair. Actually the best way to deal with car salespeople is not to haggle at all. Just act nonchalant. Don't let them be able to read you, play them like a Poker Game and you can come out on top in the price game. I do this in a lot of my buying rendezvous (not just cars) and have landed some great deals!

[GREENBACK]

Maybe the haggling/negotiating game will one day be a part of the finance classes that are taught in school(I know, I'm dreaming for the moment). Would be helpful.

[Russell]

It's probably already been mentioned here but most if not all business-to-business items have negotiable prices. That's not usually the case for most of the retail-to-consumer items. In my field, IT, when I buy some equipment with a list price of $600k I usually negotiate it down by 40-70%. If you pay list price I'd love to resell equipment to you and hence the whole reseller business. Buy cheap-er sell high-er.

[maat55]

I want to edit what I said earlier. I'm not saying that there necessarily needs to be a fixed price on a car and that every dealership must charge that exact same price (I think my earlier comments made it sound that way). What I'm saying is that each dealership should have a fixed price. Let them decide what that price would be. Dealership A might price a specific car at $20,499. Dealership B down the road might price the exact same car at $21,050. Dealership C across town might charge $19,999. But all 3 of those prices would be fixed. If you walked into any one of those places, you'd know exactly what the car would cost. So before going shopping, you could make a few phone calls or go online to the dealership websites and find out who had the best price. It would be no different than what we all do today with other big ticket purchases. Buying a new TV? You may check Best Buy, WalMart and Target and go to the one with the best price. What you don't do is walk into WalMart and haggle over the sticker price.

Remember, part of the car price is commission. The reason the price changes is due competition between salesmen. One salesman may need a sale more than another. Not so at Walmart or Bestbuy.

[jIM_Ohio]

Maybe the haggling/negotiating game will one day be a part of the finance classes that are taught in school(I know, I'm dreaming for the moment). Would be helpful.

Most of it is personal comfort.

My wife was cringing when I used the car negotiating techniques I mentioned in another thread.

If you don't feel uncomfortable, you are not negotiating hard enough. That is the advice which made me a better negotiator.

[disneysteve]

The problem of the fixed pricing concept and why it wouldn't work, it doesn't allow dealers to expand profit margins based on market conditions

For instance, if they are making profit on certain models they probably won't discount those models (remember Prius last summer).

Just because there is a fixed price, doesn't mean they couldn't put certain models on sale, have rebates, put coupons in the Sunday paper, etc.

If a certain model is hot, don't discount it. Set the price higher. If other models aren't moving, put them on sale.

[tripods68]

Just because there is a fixed price, doesn't mean they couldn't put certain models on sale, have rebates, put coupons in the Sunday paper, etc.

If a certain model is hot, don't discount it. Set the price higher. If other models aren't moving, put them on sale.

I already addressed those questions in my comments in some way which by the way I agree with you:

"The longer the cars seats on the lot, the more it cuts in dealearship profits. They either have to discount heavily or sell it at a invoice price which by the way is a loss."

if they are making profit on certain models they probably won't discount those models (remember Prius last summer)."

[jIM_Ohio]

Just because there is a fixed price, doesn't mean they couldn't put certain models on sale, have rebates, put coupons in the Sunday paper, etc.

If a certain model is hot, don't discount it. Set the price higher. If other models aren't moving, put them on sale.

The problem with rebates is it then discounts the value of every car already sold. Granted it was a honda salesman which explained this to me... but there is a reason honda rarely if ever gives a rebate.

GM sells the 2007 cavalier and I am guessing it "sells new" for 13k in 2007. If the value of the car 2 years later is 7k, it lost 6k from depreciation.

GM sells the 2009 cavalier for 14k right now (guessing). It offers a rebate of 2k to bring its value down to 12k. The value of all the used cavaliers went down a fraction of the 2k rebate as well (why buy used for 7k when a new one is 5k more and will only depreciate 6k in 2 years).

[GREENBACK]

Just because there is a fixed price, doesn't mean they couldn't put certain models on sale, have rebates, put coupons in the Sunday paper, etc.

I think they currently do some of this anyway so why not use this to their advantage. Their whole culture is commision driven and I'm not saying that's wrong. I'm simply looking at it from a different angle and a lot of them probably have as well and decided it's not the most profitable way to operate the buisness.

I think you could fix the price where the salesman gets his share and everyone else gets their profit and they attract a lot of customers because they don't play the same old tired game.

I personally will haggle for a good price with the best of them if that's what it takes but as stated in my original thread, it's not a very attractive system to those lacking the skills to negotiate. I feel that they could attract a pool of customers that are seeking (new buzzword)......transparency. They already know the price point where the deal ends anyway so why play games.