Car shopping is a stressful process, and the last thing most shoppers want to do is go back and forth with the salesperson (and the salesperson's boss) negotiating the price of the car. The negotiation step in the car buying process can take an hour or longer and after already spending the entire day at the dealership, many shoppers are fatigued. The industry has caught on to this 'negotiation anxiety', and as a result, the no-haggle pricing strategy was born. Although it sounds like a stress-free experience, it won't always yield the best price. If you see "no-haggle" advertised on a car, should you consider it, and does it really block you from shooting for a lower price?
No-Haggle Pricing Programs
No-haggle programs can come in many forms including dealerships that advertise it directly or car shopping sites that offer a similar option. Carmax makes the claim: "Every vehicle you see has a low, no-haggle price, so you can focus on what matters. Of course, our friendly sales consultants will always be there if you have any questions." This is a good example of how the tactic is used to put customers at ease and remove negotiation anxiety from the equation.
In some cases, banks, credit unions, and even Costco offer customers similar no-haggle, no-hassle programs by getting prenegotiated prices from dealers. Shoppers then get a certificate to purchase the vehicle at the preset price. The biggest benefit to no-haggle pricing is the time and stress it can save at the dealership, and in some cases, it can also provide cost savings. According to U.S. News and World Report, their 'Best Price Program' has saved car shoppers an average of $3,206 off MSRP across all vehicles.
Is "No Negotiating" Negotiable?
If you see a no-haggle sign at a dealership or online, you may wonder if the price offered is truly the final price or if there is some wiggle room. In most cases, trying to get the price down on a no-haggle car quote is unlikely to yield much success. This is especially true for a large chain like Carmax that has a company-wide policy. Although the odds that the dealer will budge tip slightly in your favor at independent dealerships, it's still a long shot.
One reason that no-haggle dealers are unlikely to back down is the threat of false advertising. If they promote no-haggling and then proceed to negotiate, they run this risk. Another reason is that word can spread quickly that some customers are negotiating and getting better deals which will devalue the entire program. That being said, it doesn't hurt to ask the salesperson if there is any room for negotiation despite the no-haggle price advertised.
Getting the Lowest Price
Going the no-haggle strategy can be a smart move for some car shoppers while others should take the traditional car-buying route. Shoppers focused on saving as much as possible, or those who enjoy negotiating will be better off forgoing a no-haggle only dealership.
According to Jalopnik, new car shoppers should be careful with no-haggle pricing because they will usually get a better deal by negotiating, while used car shoppers are more likely to walk away using this strategy: "depending on the type of car you are trying to buy the approach can cause some confusion for your average buyer. In short: When buying a new car, “no haggle” dealers can often be beaten by someone else, but the dealers that price pre-owned inventory with a “no-haggle” prices have usually done their homework".
When buying a used car, it's especially important to look at the entire value including the warranty offered and the equipment it has instead of simply looking for the lowest price. Remember that even if you get a quote from a no-haggle dealer, it doesn't stop you from shopping around for a better price elsewhere. Make sure to get multiple quotes for similar vehicles and see how the no-haggle price compares before pulling the trigger.