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Consumer Reports study (m) (archive)

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Posted by Mofongo on September 27, 1999 at 20:54:25:

In Reply to: Value Pricing - This may be war!!! posted by MikeW on September 26, 1999 at 23:40:00:

When Saturn first came out and Ford was also pushing their "no-dicker sticker", Consumer Reports did a study and compared "no-dicker" cars prices with cars where they sent in professional hagglers to cut a deal. Basically, they found that the average person ends up paying less when the sticker price is non-negotiable...this is because the dealerships no longer inflate the sticker in order to "make you a really good deal on this baby here if you by it today". An "average" person is a serious car buyer who has looked around at the (only) local dealerships and knows enough to try and hold out a little against dealership pressure and try to talk them down a little, but who hasn't done enough research to figure out the invoice price or an acceptable profit margin.

On the other hand, if you were willing to do the research, negotiate effectively and shop around, they found you were substantially better off going somewhere where the price was negotiable.

I would think the latter applies to most of us here...so a fixed-price strategy by BMW would not benefit us. On the other hand, I can definitely see the logic in a premium car company's marketing strategy. If BMW is trying to make the buying experience be as painless as possible (at least to you...the agony experienced by you checkbook is still the same :), then removing one of the ways that dealerships can pressure you makes sense. It should be noted, however, that Ford tried this approach and found that they sold more cars in the long run *with* high-pressure dealers, and have long since abandoned their "no-dicker sticker."

Mofongo



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