Es350'08 Nav/premium Plus+options

[es350md]

Just got one last Saturday, details:

Voice-activated DVD Navigation System

Additional Options:

- Premium Plus Package

- High-Intensity Discharge Headlamps (HID)

- Intuitive Parking Assist

- Full-size spare tire with 17-in alloy wheel

- Rear seat side airbags

- Wood- and leather-trimmed steering wheel and shift knob

- Mats, cargo nets and wheel lock

- All season Mats

MSRP: $42025

Invoice: $ 37351

Paid: $36800 +TTL

OTD: $39373

[beergutvt]

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[beergutvt]

I'm jealous, I got the same car but paid 38k +TTL. I tried getting it for 500 under invoice but Pohanka (Chantilly) wouldnt budge. Though it looks like they got some of there money back in fees. My out the door price was about 40200.

[Over a decade at Lexus]

I guess I could say "good job" on your wonderful pricing on the ES350s that you have purchased but there's more to think about than price.

It's worth mentioning that every time somebody buys a car at or near dealer invoice and then runs around shouting it from the rooftops, you simply DEVALUE everybody else's one year old car something terrible. Not to mention the fact that you accelerate the depreciation of your VERY OWN car!!!!!

When you score a super duper deal like that, I'd suggest you quitely pat yourself on the back for your luck and superior negotiating skills and keep quiet about it to preserve your car's value and the prestige of the brand you presumably like. If this king of pricing goes on for too long, there will be NOTHING prestigious about owning a Lexus!!

Take care and enjoy your ES350s....it's a wonderful car!!!

[SW03ES]

This kind of pricing has been going on for many years. I bought my ES300 near invoice 5 years ago.

While I understand what you are saying and I can tell you're a dealer, the internet and the access people have to pricing information is what gets the news around, posting on a messageboard isn't going to devalue anybody's year old car or ruin the prestige of the Lexus brand. The ES is the entry car, its a volume car. You don't get deals like that on the LS for instance.

[MHU38]

I don't understand why a company that is as established as Lexus doesn't just make all dealers sell the cars for the price on the window stickers. Think about it. If you like the car, and you think it's worth the money, you buy it. And you buy it knowing you got the best deal, becuase they wouldn't discount the cars. It works for Saturn, it works for Harley-Davidson. What kills me is when companies get away with marking up cars from sticker price. I remember going to Honda when the S2000 came out only to find the dealer had a $7000.00 mark up above sticker for the car. I definately didn't want one that bad. I think BMW was doing that for the M5 series too. They should just sell them for sticker and everyone will be happy. Think about all the stress that will be taken away from purchasing a car if you don't have to worry about fighting over price.

[Over a decade at Lexus]

You are absolutely correct, I am a dealer and don't hide that fact one bit.

My purpose for being on this forum is simply to provide an opposite point of view on some of these matters. I see things from a different perspective quite obviously and I thought it might be interesting to the people in this forum to get a glimpse into the dealer's perspective.

I'm all for somebody getting a fair deal. I have no problem with that at all. When all the negotiating is done, both parties should walk away from the table happy knowing that a FAIR deal was struck. The customer should feel like they got a fair price and the dealer should get a fair profit to enable him/her to deliver Lexus levels of service in the future.

The problem I have with all these at or near invoice deals is as follows: When we sell a product at or near cost, it leaves little to nothing to pay our Sales Consultants. When Sales Consultants are unable to earn a living, they seek employment elsewhere in other industries or worse yet, with our competitors. It's getting very difficult to attract and retain PROFESSIONAL Sales Consultants, the kind that you the customers enjoy doing business with, the kind that deliver the Lexus levels of service you've come to expect. At some point, we have to start cutting services to trim cost and this is all a very slippery slope. Just look at what's happened in the computer industry. All the discount pricing on computers has reduced margins to a point where the manufacturers have gone offshore with their support to save money. Do you know ANYBODY who is happy with the support they get from an operator in Bangladesh? It's an extreme example I know but a relevant one none the less.

One thing is for sure though, we as Lexus dealers will continue to strive to provide industry leading service to our customer base!

Take care and happy motoring.

B)

[SW03ES]

I spent several years consulting with car dealerships and I am well aware of the difficulties you mention. Its a tough business, made much tougher by the internet and the "deal at any cost" mentality of the consumer.

However, I don't think theres a lot you can do to combat it...

[Over a decade at Lexus]

That is very true...the "deal at any cost" mentality is pretty hard to combat.

I see my guys work with people for weeks, taking them on 6 or 7 test drives, answering ALL of their questions, giving them all the information they need to make a well informed purchasing decision and then.........the customer calls them a few days later and says they got the car for a couple hundred less somewhere else with ZERO consideration for the fact that my Sales Consultant spent the better part of 8 hours helping them.

I guess it's just a sad commentary on how our society has DEVOLVED in terms of respect and value for people's time and efforts.

Very sad! :-(

[MHU38]

I spent several years consulting with car dealerships and I am well aware of the difficulties you mention. Its a tough business, made much tougher by the internet and the "deal at any cost" mentality of the consumer.

However, I don't think theres a lot you can do to combat it...

Price fixing. If your product is good enough, people will pay for it. I'd like to hear a good argument for why manfacturer implemented price fixing would not work.

[SW03ES]

I'll let the dealer respond to that too.

Its not that simple, and the franchise dealer owners don't really want it to be that way otherwise it becomes more difficult for them to compete with other dealers of the same brand and other brands who WILL deal on the price. Dealers are independently owned, and their franchise agreements don't give the manufacturer the power to decree something like that.

You mentioned that you think its wrong for dealers to ask more than MSRP on hot cars. Why? Its the same as when you ask for LESS than MSRP on less hot cars. Its supply and demand. You say if your product is good enough people will pay for it, then why shouldn't a dealer mark a car up $7k if the market will support that?

Also for a luxury brand like Lexus volume is lower and profit margins are higher than a mid to low market brand like Saturn. They need to move inventory to turn a profit whereas the inventory automatically moves for Saturn.

You'd have to have an industrywide shift towards no haggle pricing for that to really work for car salespeople and dealer owners, and in order to accomplish something like that you'd almost have to violate antitrust laws.

That is very true...the "deal at any cost" mentality is pretty hard to combat.

I see my guys work with people for weeks, taking them on 6 or 7 test drives, answering ALL of their questions, giving them all the information they need to make a well informed purchasing decision and then.........the customer calls them a few days later and says they got the car for a couple hundred less somewhere else with ZERO consideration for the fact that my Sales Consultant spent the better part of 8 hours helping them.

I guess it's just a sad commentary on how our society has DEVOLVED in terms of respect and value for people's time and efforts.

Its a real shame. I'm in the real estate business and its difficult for us too. At least with us we retain customers through the process by legal contract and because we offer liability protection, representation, and negotiation skills on their behalf. For people who are retail, like car salespeople, its really tough.

[MHU38]

I never said it would be easy. There isn't as many Lexus dealers as there are other brands. I'm sure there is some type of rule implemented from one franchise building across the street from another. So I don't think that would be too big of a problem. If the prices are all the same, the consumer just buys from the dealership closest to home. Whats the term for spending your money in your own community? I know there's a name for it. As far as competing with other brands, it's like comparing apples to oranges. Does somebody say they will spend $5000 more for a 3 series BMW than an IS because BMW is willing to negotiate price? And if Lexus is a better car than BMW or Mercedes or whoever, and the price is usually lower than a comparable competetor, than they shouldn't need to negotiate any further. And I understand what you mean about hot cars. But you don't see Lexus doing that with the IS-F. If you want one, you simply wait your turn on a wait list. I personally don't want to be the buy that paid $1000 for a generation one XBOX360 to have it at Christmas when I can pay retail if I wait until Febuary. Maybe that's not the best example, but hopefully you understand my humble point of view.

[SW03ES]

I do, but you don't have the knowledge of how the car industry works that I do. Its more complicated than you realize. You're talking about a paradigm shift in how business is transacted, the role of the car salesperson, how they are compensated, etc.

For instance, a lot of these high end car salespeople have relationships with customers over the long term, and what they build that relationship on is a discount when they purchase new cars, they're not going to want to explain to their customers they cant do that anymore. All the dealers are independently owned businesses, so you can't collude to fix prices...thats price fixing and its illegal. Its complicated.

[Over a decade at Lexus]

Good discussion guys!!

This issue is sooooooo complex as to almost be impossible to explain here accurately. To start with, the manufacturer of a product can set and MSRP but can not issue a decree stating that you have to sell for that. That's illegal and the Federal Government would have an anti-trust suit against you so fast it would make your head spin!!

"How does Saturn do it?" you ask. Well, I'm actually quite qualified to answer that question as prior to my involvement with Lexus, I was a General Sales Manager for two different Saturn Retailers. The short answer is they don't sell all the cars at sticker price nor are they forced to by the manufacturer. The "Retailers" have simply agreed that they will sell the cars for MSRP, no more, EVER and that they understand they CAN sell for less if they want to. That's what keeps the Feds out of it. The fact that they can sell for less if they want to.

In the beginning there was a ton of controversy surrounding this issue with Saturn and the Feds did investigate and found no collusion existed because the stores could sell for less if they wanted to, the manufacturer did not FORCE them to sell for MSRP or penalize them if they didn't. The key to making it work was that the Retailers just kind of all decided to stick to it for the most part. There were some places in the country where they didn't and still don't but it's kept pretty quiet and those Retailers are less than popular at gatherings of Saturn folk!! Another good example is Apple Inc. Have you ever seen an Imac or Ipod on sale ANYWHERE, even WalMart? Nope, and you won't either.

Aside from having a committed dealer group, you need to have a manufacturer who agrees and understands that they have to be much better at keeping supplies just slightly less than demand. Apple gets that, Saturn gets that, Toyota/Lexus DON'T for the most part.

As to dealers not wanting it because they can't compete for the business....I disagree. I would love to compete against other makes and my fellow Lexus stores based on SERVICE, not on price. If fixed pricing were to EVER happen, we would all have to shift our focus from price to building value in our product and ourselves and we could no longer use the crutch of low price to make up for lack of knowledge or lack of expertise as we do now. The side benefit to this would be that the customers would see a marked improvement in the level of service they would get as we would all have to up our game substantially.

I think that covers most of it......heck I've been typing so long now with interruptions, I forgot all the points I wanted to make!!! :-)