Which is best for you?

What does the average customer really want? Is it ?no haggle, no-dicker, one-price selling?? Or is it ?no-holds-barred negotiation??

Let me explain why I believe no-dicker pricing is unlikely to become standard industry practice, and why there may be less in it for the buyer than you might think.

Many new car dealers have experimented with it ? in one form or another. As entrepreneurs, we try to capitalize on every competitive advantage to earn your business. If we believed this no-dicker pricing system worked, we would implement it. Quite simply, we react to the consumer?s direction. If we didn?t, we?d fall by the wayside.

For decades, and even for generations, negotiation has been an integral part of the automotive purchasing process, just as it is in real estate. Supply and demand controls this competitive environment.

Even department stores and other retailers will sell the exact same product, but at different prices.

For the most part, many of us do want to negotiate. Sure, some of us are better at it than others, but we all enjoy the feeling of ?satisfaction? we get when we?ve negotiated a good deal. We love it when we ask for things to be thrown into the deal, and they actually are!

Customers at ?one-price? dealerships can pay more for their cars than buyers who bargain skillfully. For all of you who enjoy the thrill of a bargain, you could save hundreds of dollars over those who enjoy the comfort of no-haggle pricing. But, remember, the difference in price between these two practices is usually only in the hundreds, not the thousands, as many people think.

Manufacturers set our margins generally between 8-12%. Supply and demand of a particular product dictates our eventual ?transaction price? ? generally between 6% and 8% over our invoice price.

Today in the GTA, only a small percentage of TADA?s 300+ dealers offer one-price selling. Does this tell us something?

Studies and surveys have shown that the dealer?s vehicle margin increased with one-price selling. Hmmm. You?re probably wondering why all dealers don?t offer it. Let me give you some insight.

Remember that new car dealers are independent retailers. We don?t control our MSRP (manufacturer?s suggested retail price), or manufacturers? incentives such as rebates, finance rates, and so on. Nor do we have control over the cost we pay for our vehicles. Every dealer within the same franchise pays exactly the same price for his vehicles. We only control the eventual selling price.

In actual fact, no-dicker pricing could cost you. Remember that no-dicker doesn?t mean ?no profit?. No-dicker dealerships aren?t free of salesmanship, and they don?t refrain from offering you financing, extended warranties, rust proofing, and other services. In fact, if a dealer advertised a ?no haggle? price, yet, while on the showroom floor decided to discount that vehicle for one customer and not for another, this could be considered as a misleading or deceptive advertising practice. We would be bound to that price, without flexibility.

Within each franchise in the GTA, there are a large number of dealers. Some number over 25. Each one is competing for your business. Are you aware that a dealer group cannot get together and agree upon a single price? This would eliminate competition in the market place. This agreement would be illegal, and would be deemed collusion ? it?s in breach of the Competitions Act.

From some dealer?s perspectives, no-dicker pricing means they would not be able to offer their ?dedicated? customers a better price, in appreciation for, say, their loyalty. The advertised price is fixed for everyone.

From another perspective, some dealers find that customers will take their no-dicker fixed price and use it as a starting point at a competing franchise.

Even within the same franchise, car dealers are not partners ? we are competitors.

For those of you who prefer the ?no pressure?, believed to be associated with ?no haggle?, please remember that many of your new car dealers can offer you a ?no pressure? sales process, in addition to allowing you to negotiate ? and feel gratified when you get a better price than was in the window.

Also remember that all available manufacturer?s incentives (low financing, rebates, etc.) are available, regardless of whether you?re at a one-price dealership or not.

Be aware that your vehicle trade-in is probably the most significant factor that could impact your final ?net price? ? regardless of the dealership?s pricing strategy. The value assigned to your trade-in can very substantially from one dealership to the next.

The bottom line is that new car dealers know what their customers want. You want a positive purchase experience where you are completely satisfied with the sales process, the vehicle delivery, and the value you received for the price you paid.

Remember, YOU are in the driver?s seat!