The automobile — connected to the internet, powered by electricity, driven with computer support — is evolving faster than at any point in its history. Buying one, though, remains just about the same as always.
But luxury dealers are betting that technology, and a healthy dose of more personal interaction, can vastly reduce bad buying experiences.
“How do I have a sustainable business when everyone laughs thinking about car salespeople?” asked Peter Cooper, owner of Lexus of Lehigh Valley in Pennsylvania. “We’re so out of touch with the consumer.”
Aware that many buyers hate haggling, Lexus introduced a fixed-price programme in May 2016, called Lexus Plus, in which the customer deals with only one person from beginning to end. Only 10 of its 238 dealers in the US are involved so far; another three are preparing to enter.
“Buyers won’t have to wait 45 minutes to see a finance director,” said Jim Dunn, general manager for JM Lexus of Margate, Florida, the world’s highest-volume Lexus dealer, which will offer Lexus Plus. “It’s time to put your best price up front and live with that.”
At Cooper’s dealership, the programme has been well received. Unit sales are up 28.6 per cent in the first quarter compared with the same period last year.
Fixed pricing has been tried — and abandoned — before, most notably by General Motors’ now-defunct Saturn division in the 1990s. Now other companies have similar programmes; Tesla sells its vehicles only at a fixed price, and Costco members can be referred to participating dealers handling a range of brands to pay a pre-negotiated sum.
Not getting a straight answer on price is one reason Will Kunkel, who wanted to acquire three new Audis for his family, left two dealerships in disgust. “The first dealer told me that I had to buy immediately because the car would be gone that night,” Kunkel said. “And the second would only talk about monthly payments rather than price. They may as well call you an idiot to your face.”
Cadillac is testing a programme whereby customers never buy any particular vehicle at all. Instead, they buy rights to a car and can change which one they want to drive using a mobile app. Book by Cadillac, being tested in New York City, offers the ability to switch among Cadillac models up to 18 times per year.
Using the Book app, customers can reserve a vehicle that, if it is available, will be delivered the next morning to the location of their choice. The programme costs $1,500 per month, which includes registration, insurance, service and repairs. All vehicles — including the Escalade, CT6, XT5, CTS-V and ATS-V — have high-end trims, plus a 4G LTE connection and hot spot, OnStar and satellite radio.
About 8,000 people have asked to be part of the programme, the company said. And the high-tech, no-commitment approach has attracted younger drivers: the median age of those signing up for Book is 34, 90 per cent of them first-time Cadillac drivers. “We’re a Netflix for cars,” said Melody Lee, Cadillac’s director of brand marketing.
When customers do go to a dealership to buy, they have often done research online before leaving home, industry experts say. That makes it harder for dealers to keep the upper hand when discussing typical prices, features or available inventory.
“It’s definitely a challenge for dealers when customers have instant access to vehicle information,” said Chris Sutton, vice-president for US automotive retail practice at the research firm J.D. Power.
Alfa Romeo, trying to make a comeback in the US, is arming its dealers’ sales teams with iPads to help them communicate on more equal terms with their customers, said Pieter Hogeveen, director of Alfa Romeo North America.
Lincoln Motor Company, Ford’s luxury division, is approaching the problem of selling to a well-informed, focused public by reshaping a car sale as a luxury experience. Customers don’t want to submit themselves to one salesperson to haggle with, then to a closer and finally to a finance manager, surrendering the better part of a day.
“For affluent customers, time is the key thing; it’s their ultimate luxury,” said Kumar Galhotra, Lincoln’s president. To reduce the time that people spend buying and servicing their vehicles, Lincoln is offering at-home test drives and service pickups and deliveries. Customers can even evaluate a vehicle over the weekend.
Such convenience-based initiatives are part of Lincoln’s Black Label programme, a sales and service package that was first offered in 2014 and is available at 106 of the company’s 800 dealers, in 29 US states. Black Label models have certain levels of trim and are offered in unique colour and fabric combinations. Sales representatives visit customers at their homes or businesses with a sample swatch kit to determine how the car will look inside.
Once purchased, Black Label vehicles are picked up and delivered for servicing, and replaced with a loaner car. Lincoln’s theory is that a good sales process continues after the sale, so the company offers additional features to keep customers coming back. One example: The company is also testing a chauffeur service in Miami and San Diego.
For $30 an hour, drivers will take customers, in their own vehicles, anywhere they wish to go — a useful feature for those who can’t drive after doctor’s appointments or a night on the town or simply have too much to do. The chauffeur can also handle shopping trips or pick up the kids at a soccer practice.
“In the Black Label programme, we’re getting wealthier, substantially younger customers,” Galhotra said. “Compared to the mid-50s age for luxury car buyers in general, our Black Label customers are mostly in their 40s.”
That is the kind of programme that Kunkel, creative director at Grayling, a public relations firm based in New York, would have welcomed. He walked out of two dealerships before finding an online price at a third-party website to lease two vehicles and buy a third.
“I told the dealer I didn’t want to haggle,” Kunkel said. “I was not going to buy mudguards. They said they’re a no-haggle dealership.”
He then got the dealership to agree to his price without even stepping through the front door.
— New York Times News Service
