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Chrysler Copies From Saturn’s Playbook

Posted in auto industry, Car Buying, Fiat, News by Kurt Ernst | February 2nd, 2011 | 9 Responses |

Fiat's 500 will get 'no haggle' pricing. Image: Chrysler Group

Remember the launch of Saturn, the “different kind of car company”? Remember how the Saturn buying experience was going to be unique, complete with modern and inviting dealerships and no-haggle pricing? If you’ve missed that since the demise of Saturn, I’ve got some good news for you: Chrysler is implementing “no haggle” pricing at Fiat dealers. Their strategy behind it is sound: the target market for the Fiat 500 (Generation Y) doesn’t like to negotiate pricing. Instead, they want to know that the price they’ll pay is the best deal, and that no other Fiat 500 buyer in the U.S. will get a better price (please note that I’m keeping my skepticism in check). In the words of Laura Soave, head of Fiat North America, “The pricing is the pricing. The younger generation doesn’t haggle. They don’t feel comfortable with it. They hate the experience.”

That’s a pretty broad generalization, and I’ve got plenty of Gen Y friends who’d disagree with the statement. Still, I applaud anything that makes car-buying a more pleasant experience, as it seems to have gotten even more nasty and confrontational in recent years (or maybe I’ve gotten more nasty and confrontational in recent years). In any case, the limited number of Fiat franchises, and the limited amount of inventory they sell, will ensure that Chrysler can monitor which dealers are playing by the fixed pricing rule. While manufacturers can’t legally set selling prices for dealers, they can control inventory for dealers who don’t play by the rules. Chrysler has a set policy that Fiat dealers can’t advertise the 500 below the established MSRP, but I doubt that policy extends to cover ADM for dealers who want to pad profits on early delivery vehicles.

What’s your take? Do you enjoy the hand to hand combat of car buying, or would you rather be told what the price is up front. When a salesman says, “this is my best deal,” do you believe him or do you keep working it? Would “no haggle” pricing influence where you bought your next car?

Source: Left Lane News

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9 Responses

  1. Don Ready says:

    …I give the salesman 2 chances, and I am clear about it when I first walk in. The initial price offering, and a secondary price offering with a managers approval. No more games at that point, if I do not like what I hear, I head for the door. Their loss- I am not the guy they make a ton of money off of, just the guy they move a unit off of the lot to.
    I have been quite sucessful with this technique, and usually get the car for what I feel comfortable paying, and thats the main point.

    • Kurt Ernst says:

      Don, I use a similar strategy and I agree on the results. I have no patience for the “let me talk to the manager” game, so I usually give them a spreadsheet with what I’m willing to pay for the car I want. The only answer I expect from the sales rep (after consulting with his manager) is “yes” or “no”.

  2. inthebuff says:

    I hate the hand to hand combat. I’d rather the dealer be an honest broker (if that’s even possible, given the reputation of car salespeople).

    When I lived in the Baltimore/Washington area, I used a buying service that had negotiated prices with all the dealers in the area. I picked out the car, got the price, walked into the dealer and bought my car.

    My recent experience with a new car purchase was that I wanted to trade a high end used car (a T-bird) for a relatively mid-level mini-suv (Xterra) that had been sitting on the dealer’s lot for 3 years.

    Not only did I get the bait and switch, I got the “I have to talk to the manager” routine, and there was no trade as was the premise of me coming to the dealer in the first place – they wanted $6K in addition to my car. This was a year ago and you could hear the crickets chirping in the dealership.

    I know that people have to make their money, but I don’t like people lying to me when we’re out to make a deal. If they couldn’t swing the deal I offered, then they should have said that.

    The best part is … we walked away without saying a word, called a dealer an hour away, and got a used Xterra with only 8100 miles on it, that has been perfect. The buying experience was much better.

    We made a deal and it was stuck to.

    If Fiat/Chrysler can keep with that model, then good for them. I imagine that they’ll have to get a whole new workforce. Any one with experience..need not apply.

    • Kurt Ernst says:

      Buff, I’m sure there’s still some Saturn salespeople looking for work…

      It’s odd, but I find car buying in FL to be much more confrontational than car buying in the NYC area. That’s the opposite of what you’d expect, but I guess buyers are easier to exploit down here.

  3. This is an excellent idea. As a customer I detest the thought of car haggling, actually for my last car I negotiated with the “internet manager” online via e-mail and I only agreed to step inside the dealership once he agreed on that particular car only. I cannot negotiate in person at all as the process gives me anxiety.

    I would PREFER to buy somewhere with a no haggling, one price only for all consumers type of deal but it has to be a brand that I’m interested in and I prefer luxury cars.

  4. Jen says:

    The thought of this already has me anxious for our upcoming purchase(s). I am not a negotiator by any stretch but I intend to deal only with the internet department when the time comes. I appreciate that there are now sites like dealerratings.com because that helps. The dealership where I plan to shop for our Mazda seems to get great reviews (and I’m already on excellent terms with their service department) so I’ve got my fingers crossed. But I’ll admit, the idea of a place like CarMax (if we ended up in the market for something used) where the price is the price is appealing (my beef with them is, I want to see the car in person before I commit to paying the huge fee to ship it across the country)

  5. Kurt Ernst says:

    Jen, I wouldn’t trust DealerRatings all that much. I tried to write a review about a bad experience I had with a local Toyota dealership, but my review kept disappearing. Dealers get to question any comments they don’t like, so you’re not going to get a true picture of how good or bad their sales department is.

    • Jen says:

      I suspected that could be the case as well. I looked at it more to see if any names consistently popped up as being helpful, courteous, etc. I figure it’s not perfect, but it’s better than nothing.

  6. eddie_357 says:

    Generation Z loves to haggle then tweet about it