| ost people, the idea of haggling for a new car leaves | | | | make an average profit of $1500 per vehicle. The |
| them with a sinking feeling. It seems that no matter | | | | dealer sells the first vehicle and makes $1500 – |
| how much we learn about the car, the options and the | | | | right on target. On the next vehicle, the dealer may |
| pricing, we are never quite certain that we have | | | | only make a $500 profit. On the third vehicle, the dealer |
| actually gotten the best deal. We leave the dealership | | | | makes a $2500 profit. |
| with a vague feeling that we have overpaid for our | | | | Even though the profit on each car (and by extension |
| new car. | | | | the selling price) is different, the average profit is $1500 |
| Until fairly recently, there was no remedy for this | | | | – still right on target. The first person paid an |
| particular ailment. If you wanted a new car, you went | | | | average price, the second person got an excellent |
| to the dealership to haggle. General Motors came up | | | | deal and the third person overpaid. |
| with a new idea. | | | | Fixed-price dealerships set goals the same way. |
| In 1990, the first Saturn vehicle rolled off the assembly | | | | However, since there is no negotiation, the $1500 profit |
| line. The car itself was fairly revolutionary, but what | | | | is built into each car's price. If you are person one or |
| caught people’s attention was the way the | | | | three, that’s fine. If you are person number two, |
| cars were sold: All Saturn dealerships offered fixed | | | | though, you just paid $1000 more for your car than |
| pricing. You could walk into any Saturn dealership and | | | | you would have at a traditional dealership. |
| the price of the car was on display for all to see. | | | | This does not automatically mean that you are better |
| Everyone would pay that price, and that price only. No | | | | off at a traditional dealership. You need to take a good |
| haggling. | | | | look at yourself. If you are willing to educate yourself |
| It seemed like a dream come true. In fact, the idea | | | | before heading to the dealership and are reasonably |
| was so popular with consumers that other dealerships | | | | confident in your ability to negotiate, a traditional |
| began to offer “no-haggle” pricing. It is | | | | dealership will likely yield a better deal. However, if you |
| now estimated that about 25% of new car purchases | | | | are nervous about negotiating or simply don’t |
| take place at fixed-price dealerships. But do these | | | | want the hassle, the fixed-price dealership is for you. |
| types of establishments really offer a better deal than | | | | This does not automatically mean that you are better |
| other dealerships? Well, it depends. | | | | off at a traditional dealership. You need to take a good |
| From a strictly financial point of view, you will likely get | | | | look at yourself. If you are willing to educate yourself |
| a better deal from traditional dealership than you will at | | | | before heading to the dealership and are reasonably |
| a no-haggle shop because of the way the dealerships | | | | confident in your ability to negotiate, a traditional |
| set their sales goals. Traditional dealers set average | | | | dealership will likely yield a better deal. However, if you |
| profit goals, not specific goals per vehicle sold. | | | | are nervous about negotiating or simply don’t |
| For instance, the dealer aims to sell three cars to | | | | want the hassle, the fixed-price dealership is for you. |