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Automakers Look for Ways to Bypass the Classic Dealership Experience

June 28, 2017

The thought of visiting a dealership to talk about buying a car provokes feelings that range from positive to foul for drivers. Everyone seems to have some uncomfortable memories about a car salesman or the buying process in general. That process just isn't very comfortable because it involves negotiation. There's no certainty and there's not enough information to make us feel confident throughout the process. And sometimes, sales reps aren't very patient. Automakers have recognized this and are coming up with new ways to sell their cars.

Fixed Price

Last year, Lexus introduced "Lexus Plus," which averages local prices to find the market price of a vehicle. The vehicle is then sold at that price, no negotiation required. It's meant to give buyers an experience that befits a luxury brand. Lexus Plus is available for new and pre-owned vehicles. Buyers don't need to navigate the typical salesman, manager, then finance course. They deal with a single rep, who helps with the entire process. They also work with a single rep during service visits. Unfortunately, only about a dozen dealerships offer Lexus plus, as of early July 2017. However, Lexus expects more dealerships to sign up for it. Click here for a list of Lexus Plus dealers.

Fixed price auto sales isn't a brand new concept. Saturn did it in the 90s and retailers like CarMax do it now. Tesla sells brand new cars at a fixed price.

Added Convenience

Lincoln has also identified an opportunity to give potential buyers a little more peace of mind. As part of its Black Label program, buyers can take a car home and test drive it for a day or a weekend. They don't even have to visit the dealership, as the sale rep will visit them at their home or office. They also get pickups and deliveries for service arrangements. Black Label, like Lexus Plus, is only available at participating dealers. As of now, coverage is quite limited.

This kind of direct approach could be the direction the industry goes as the programs become more and more mainstream. Right now, it's a luxury thing but that could change.

Car Sharing

Companies like ZipCar deal in car sharing services, where drivers pay a low monthly rate (around $7) which gives them access to a rental vehicle whenever they need it. They still have to pay an hourly or daily rate, though, which starts at $8.50/hr or $69/day. Drivers can often save money this way, compared to owning a vehicle.

Zipcar is a typical car sharing program, but Cadillac is doing something different. It's called Book by Cadillac and it allows drivers to switch between Cadillac vehicles up to 18 times per year, using the program's app. Once they choose another vehicle, it will be delivered the next day. It costs $1,500 per month but includes insurance, repairs and registration fees. All vehicles in the program include a 4G internet connection, OnStar and satellite radio. Currently, Book is only available in New York City.

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