Car dealers offer 'no-haggle' pricing New sales method allows buyers to pay set amount without bargaining.

April 07, 1992|By Al Haas | Al Haas,Knight-Ridder News Service

PHILADELPHIA -- When her car suffered a cardiac arrest recently, Beverly S. Gradess decided the time had come to replace it. The idea of getting a new set of wheels was pretty exciting. The thought of negotiating its price was not.

For her, the new car buying charade, with its offers, counter-offers and dramatic side trips to the sales manager's lair, was about as much fun as doing her income taxes in an unheated attic.

"I didn't like it at all," recalled the 28-year-old Philadelphia elementary school teacher. "It was always back and forth, back and forth."

This time, however, things were a little different. Ms. Gradess walked into the Chevrolet showroom in Potamkin's six-franchise complex in Philadelphia and asked to see the Camaros. The salesman showed her what he had with the equipment she wanted and answered her questions. She picked out the one she liked and then found that she wouldn't have to negotiate its price.

Instead of the haggling process, she was confronted with a ticket on windshield that gave the manufacturer's suggested list price for the car, $18,000, and the firm, discounted price Potamkin would sell it for, $15,500. After the dealership's appraiser assigned a $2,000 value to her trade-in, she was left with a quick, clean, un-negotiated deal for $13,500.

In the end, Ms. Gradess drove off without any unpleasant feelings diminishing the fun of being behind the wheel of her sporty new coupe.

"It was very nice," she recalled. "There was no pressure whatsoever, and there was no haggling about the price. They just laid it right on the line."

The "one-price" sales approach recently instituted at Potamkin's complex is the hottest new wrinkle in auto retailing, and in some cases, a source of considerable publicity.

A St. Petersburg, Fla., Chrysler/Plymouth dealer, for example, got plenty of national notice recently when he put one-price stickers on his cars and replaced his 14 salespeople with four greeters who answer questions and provide test rides -- if asked.

Most dealers adopting the one-price strategy have not fired their sales force, however. Like Art Micchelli, the managing partner at the Potamkin complex, they believe the salesperson's product expertise is too important to the customer.

The dealers experimenting with the one-price, no-haggle approach typically see it as a way to increase customer satisfaction. And with quality now the price of admission in the competitive automotive marketplace, many dealers have come to believe that customer satisfaction is going to make the difference between selling and surviving -- and not selling and not surviving.

"Our bottom line is that we want to create repeat and referral business," Mr. Micchelli said. "You can't survive in this business anymore selling somebody a car, making a lot money on them, and then never seeing them again and having them spread the word to 500 of their friends that those guys over there are bad guys.

"We want them to feel comfortable here. . . . We want them to feel they got a good deal, and to be happy with the car. Then, they'll go out and tell their friends and relatives, and come back."

According to Doris Ehlers, an account executive at J.D. Power & Co., surveys by that auto industry consulting firm show a widespread customer distaste for the negotiating process. In some of the customer groups surveyed, 80 percent said they really dreaded bargaining for a car.

Not surprisingly then, she said J.D. Power found that ease of negotiation is one the principal factors in a customer's selection of a dealer.

"And so," she concluded, "one-price buying seems to be gaining momentum. . . . I don't think anyone is saying it will sweep the country. But no one is discounting it as a passing fad, either. "

Ms. Ehlers' forecast of momentum and durability for one-price car shopping is reinforced by the fact that it isn't just occurring at the dealer level. It also is being promoted by car manufacturers.

Saturn has played an important role in the increasingly widespread use of one-price selling by encouraging its dealers to charge the manufacturer's suggested list price.

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