For car shoppers, the most painful part of the process is negotiating a price. Many buyers have previously suffered through an interrogation-like experience, waiting for endless hours while the salesman and his boss play good cop-bad cop over your car deal. But getting a fair price doesn't have to be this agonizing. With a no-haggle price program, car shoppers walk into a dealer knowing exactly what they will pay. These programs also save more than just money by helping you save time spent at the dealer. "It is time consuming to research your vehicle. It's time consuming to go to a lot of dealers and get a lot of quotes," says Alan Ohnsman, a spokesman for TrueCar. With a no-haggle program, he says you get a much better buying experience that is simple and efficient. Learn more about what no-haggle price programs are (and aren't) to decide if this tool is right for you.
What is no-haggle car buying?
No-haggle price programs give customers a guaranteed price for a specific car at a specific dealer. Some dealers publish these preset prices right on their websites. Other services – including Edmund.com's Price Promise, TrueCar and the U.S. News Best Price Program – send you quotes from different dealers. Some banks and credit unions, and even stores like Costco and organizations like AAA, offer no-haggle price programs to their customers. To use a no-haggle price program, go online and enter in the model and options you want; dealers then send you their quotes. When you find a deal you like, print the certificate and take it to the dealer where you’ll test drive the car and finalize your purchase.
The advantage of using a no-haggle price program is that you know the price upfront. Because you skip the headache of back-and-forth negotiations, these programs also reduce your anxiety over getting a good deal and the amount of time spent at the dealer. "A lot of people prefer an easier process, a simplified process. And that's what our service fundamentally is designed to create," says Ohnsman. "You know a decent price, you have the information on the options on the vehicle and the additional fees – all that is known in advance. It's really trying to give the consumer a time savings and make sure that there really are no surprises in the process."
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Consumers save an average of $3,300 off the Manufacturer's Suggested Retail Price (MSRP) through no-haggle price programs, according to Ohnsman. He also estimates that those using the TrueCar service complete the purchase process in about half the amount of time. Keep in mind that your exact savings will depend on the dealer you are working with and the vehicle you are buying.
Avoiding the bait-and-switch
In order to promote the lowest possible price, dealers have been known to advertise the very basic version of a model, deleting options like air conditioning. This practice makes it appear as though you are getting a big bargain when you are instead seeing a bare-bones vehicle. With a no-haggle program, the risk of being snared in a bait-and-switch scheme is removed because the quote you receive from the dealer is linked to a specific car. A reputable program validates this by printing the car's stock number or vehicle identification number (VIN) directly on the price quote.
"There's a lot of problems people have with retail shopping," says Edmunds.com Senior Retail Editor Matt Jones. "One of them is getting a real price. The second is getting a real price on a real car, not a hypothetical, not a conjecture car. Something that actually exists. The Price Promise program we have at Edmunds.com is tied in to the dealership's inventory, so when a person says, 'I want the blue Civic with the navigation,' it is for the blue Civic with the navigation that's currently on that lot."
If the vehicle you want isn't in stock, Ohnsman says dealers connected with TrueCar or the U.S. News Best Price Program will order the vehicle for you. “If you're prepared to wait a little longer, they will get you exactly the vehicle you want at the price quoted."
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No matter if your price quote comes from contacting a dealer directly or using a third-party program, the price is set by the same source: the dealer. So how does that produce a lower price for you? Dealers know that you will likely compare the price they send you with the average amount paid for that vehicle in your region. They also understand that they will be competing with any other dealer that sends you a quote.
"The dealerships know that a customer is going to use a tool like Edmunds.com’s True Market Value to already know where the market is," explains Jones. "If you're going to have a customer who says, 'I know that this Honda Civic is going to be sold for [x amount of dollars],' why start them at $3,000 above that, just to get at the number the customer is going to be at anyway?" The attitude for dealers participating in these programs, he adds, is, "We know you're going to negotiate down anyway. Let's just get that out of the way."
Should you use a no-haggle program?
Some shoppers remain doubtful that a no-haggle price program can save them more money than if they negotiate on their own with the dealer. Spending about half an hour to get a guaranteed price for a new cars seems too simple to be true, says Jones, noting, "People will be surprised at how easy and how little contention there is."
Jones also notes there is one type of person who may want to pass on using a no-haggle program. "Some people really enjoy themselves when they beat the dealer," he says. "If you're a person who needs to beat up the dealer, [these programs] might not be for you. … You may be able to spend several hours negotiating to get $200 bucks less."
For people who do want to negotiate their car price, Ohnsman says consumers can get a price certificate and still try to talk the dealer down to a lower price if they choose to. The point, he says, is that if you feel through your research that the price on your certificate is fair, then you don't have to worry about convincing the dealer to take off a few hundred extra dollars.
"The reality is that customers want a good price. They want a very fair price, obviously, but they also don't want to go through a bunch of hoops and hassles to get there," says Jones. "This seems to offer a lot of shoppers the perfect combination of great pricing and low stress."
If you want to give a no-haggle price program a try, the U.S. News Best Price Program saves users $3,279 on average off of MSRP. Be sure to also follow us on Facebook and Twitter for more car shopping tips.