When Lexus first appeared on the scene in 1989, one thing that was revolutionary about the new Japanese luxury brand was the way its dealers treated customers—nicely. This flew in the face of the traditional, highly adversarial relationship between auto peddlers and new-car buyers that had existed for decades. Now, however, as other dealerships have upped their game with loaner cars, free car washes, Wi-Fi and gourmet coffee in their waiting rooms, and even in-dealership restaurants, the Lexus dealership experience isn’t so special. In an attempt to once again elevate the Lexus experience above that of the competition, the company is going to remove the most-hated aspect of car buying: the haggling.
Starting early next year, Lexus will roll out a pilot program with strict no-haggle pricing. As described by division general manager Jeff Bracken at an auto-industry conference in Traverse City, Michigan, and reported by the Detroit Free Press, the pricing will apply to both new and used cars. The program is highly experimental, and will apply to only a dozen stores sprinkled across the country. Dealers are supposed to let customers walk away rather than budge on the price, and it’s expected that they may experience a dip in sales, at least at first. If the policy ultimately succeeds, it could be expanded. “Based on the results, we’d offer it to other dealers the following year,” said Lexus spokesman Maurice Durand, although dealers would not be forced to participate.
The brand best known for no-haggle pricing, of course, was General Motors’ Saturn. And Saturn did enjoy high customer satisfaction, which is particularly remarkable given that it was hawking subpar cars like the SL and the Ion. The key for Saturn was that no-haggle pricing was the policy across all stores. One couldn’t take the advertised price from one dealer and walk it down the street to another who had promised to beat it. Which is often what has happened when other, non-Saturn dealers have tried something similar. Because as much as buyers hate haggling, they’re usually willing to do it if they can save some money. After all, anyone can enjoy a low-stress, no-haggle car-buying experience at just about any dealership easily enough—just walk in and offer to buy the car at MSRP.
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