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Discussion Starter · #1 · (Edited)
Looks like things are moving toward the Saturn model of a fixed lower price all the time instead of the inflated price that you have to try to chip down. Would make car buying a lot less hassle.

SUSAN TOMPOR: Give auto buyers what they want: Everyday low price


July 27, 2005

Oh, we're all savvy consumers.

We scan the car ads in the paper. We look at Consumer Reports. We go online for multiple dealer price quotes.

We see if our neighbors, who work at car companies, know of any deals. We dig up those hidden rebates.

We prowl. We scour. We know the game.

But quite honestly, we're exhausted. None of this -- even uncovering those hidden rebates -- is really any fun. It's way too much work.

Yep, the bargain-hunting consumer is sick and tired of the never-ending hunt.

So what do buyers want? Seems like the automakers have found a winning formula: One low price + a lot less hassle = lots of happy customers.

Want a radical idea?

"They need to make the employee discount the new MSRP," Art Spinella, president of CNW Marketing Research, said last week.

Could it happen? Could the manufacturers' suggested retail price drop nearly as low as the employee discount price?

I don't know. But I'd say Spinella is right on the money.

The best new gimmick may be no gimmick. A lot less hassle. A lot more everyday low prices.

There's no question that all the new deals are popular with customers. Just look at the incredible success of General Motors Corp.'s sales strategy this summer when the automaker made headlines by extending employee discounts to everyone.

GM started the employee-discount deal in June. Ford Motor Co. and DaimlerChrysler AG's Chrysler Group followed this month.

And, believe it or not, auto sales are expected to be stronger -- perhaps hitting a four-year high -- in July because Ford and Chrysler joined the fray. Even foreign automakers are benefiting.

Merrill Lynch auto analyst John Casesa predicted this week that sales would jump to a seasonally adjusted selling rate of 18.6 million units, the highest level since October 2001, when zero-percent financing was launched by GM after the Sept. 11 terrorist attacks.

Experts such as Robert Hinchliffe of UBS Investment Research contend the automakers will suffer later this year once the deals end.

And like zero-percent financing, Hinchliffe wrote, "we question whether the current employee pricing is a onetime event ... or if it is simply the next step of more to come." Some dealers say they think the deals will last through Labor Day.

"That's what consumers want. They want a Wal-Mart kind of pricing structure," Spinella said.

Thanks to everyday low prices at many different kinds of retailers, the psychology of bargain-hunting consumers has shifted. They're embracing painless, less-stress-filled ways to shop.

Oh, sure, we enjoy comparing prices and saving money. We like our extra perks, like a dealer offering free oil changes on a new car. We like to feel we got a good deal.

We just don't want to spend day after day trying to chase down a deal.

And we don't want to spend three hours in a car dealership buying a car, as many people do, according to Spinella's research.

So I'd say car companies, while late to the game, must realize that the time has come to slap sticker prices on vehicles that are a lot closer to what people would actually pay for the car or truck.

Sure, we know we're not going to get a super-low price on the next super-hot car. Who, honestly, would expect that anyone and everyone would be able to nab an employee-discount price next month on a Pontiac 2006 Solstice roadster?

So hot cars -- like hot fashions -- can still carry high price tags. But a value-priced sticker on a minivan?

Come on. Time-strapped, budget-driven moms and dads deserve it.

GM is planning to roll out a value-pricing structure for its 2006 cars. I had hoped to get GM to talk a little more about how that plan could work. And I wanted to know how it might reflect GM's success with the employee-discount plans.

But GM didn't want to disclose its plans right now. I'm sure we'll hear more about that one in the next few weeks.

Yet this idea of pricing a vehicle to sell to start with has merits -- and I've got to believe that GM and other automakers know it.

"If GM did it as a regular thing, I think the whole industry has to do it; that includes the Asian brands," Spinella said.

GM, of course, knows about no-haggle pricing -- it was the hallmark of the Saturn brand. But one fair price or one no-haggle price doesn't mean that consumers will be able to stop shopping.

They'll still need to do their homework.

"People assume that everything is fixed," said Jesse Toprak, senior analyst with the consumer Web site Edmunds.com.

But even with a so-called no-haggle or value price, consumers will need to research the value of their trade-in; shop around for car financing; negotiate the price they pay for any after-market equipment, like special wheels, and shop around for any extended warranties.

All are areas where the dealers still have room to negotiate -- and make money.

"Dealerships can charge whatever they want for the warranties," Toprak said last week.

Consumers are savvy.

They know that unless they're buying a super-hot, super-sexy car, they do not have to pay anything close to the manufacturer's suggested retail price.

So today, many folks already go online and dig up the invoice price -- typically what the manufacturer charges dealers for a vehicle.

And savvy shoppers know that they can negotiate up from the invoice price -- not down from the MSRP.

So let's quit with the games already. Let's get some price points that are real in the first place.

As shoppers, we'd rather walk in and buy it.

Why do you think lots of folks flock to Wal-Mart? Why do women love Ann Taylor Loft? Why do we hang around the aisles at Target?

Instant bargains, baby.

And, for the most part, few regrets.

Weeks later, you're not obsessed with thinking about how much money you coulda, woulda, shoulda saved, if only, if only, you had waited until the next round of rebates.

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7,468 Posts
I wouldn't complain, and I would think it would help raise the automakers overall satisfaction ratings too. People seem to really like the employee discount prices because there is no hassle to it. The automakers should take the hint!
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