There was a time not so long ago when getting a significant discount on a new Mercedes car was well-nigh impossible. Car buyers knew that motor dealers generally were prepared to offer discounts, often around 10% of the list price, but that these norms did not apply to marques like Aston Martin, Ferrari, Lamborghini, Porsche and Mercedes, especially at the top end of the range. Asking the salesman usually produced a look of amused incredulity (‘You want what…?’) followed by an explanation that Mercedes just didn’t do that, because they didn’t need to.
Those times have gone, but I was staggered to see an advert this week for brand new Mercedes S Class cars, top of the range, new, unregistered, popular colours, regular specification, at just a little more than 50% of the list price. True they were diesel powered, but half price seemed incredible.
Why the change? Partly because sales of new cars have fallen significantly in the last few months. I suspect that might be an unexpected bi-product of the Brexit stand-off. Companies have been cautious in spending money because of Brexit uncertainty, and corporate car purchases are a very significant proportion of total car sales. There will be other factors; diesel is now regarded as the fuel of the devil and deeply unpopular. Big expensive cars are not the status symbol they once were in times of austerity. And the looming introduction of a ban on all carbon producing cars is making people think twice about the choice of their next new car.
But even with the easy availability of big discounts on new cars, surveys show that British car buyers don’t like the process of haggling for a deal. An article in Autotrader magazine a few months ago (read it here) examines the popularity of ‘no-haggle pricing’. Amazingly the article suggests that some buyers will actually pay a premium so as not to have to haggle (really?), and there are now a number of no-haggle dealers who offer their cars at a ‘fair’ price with a guarantee that they will not sell them for a penny less, no matter how hard you try to negotiate.
Of course, even if the no-haggle dealer refuses to budge on the price there is still lots of room for a better deal, for example by agreeing some freebies; extended warranty, free servicing, better financing, cheaper gap insurance and so on. So, for those who find haggling an uncomfortable experience and for whom no-haggle seems like a good option, I’d still have a go at a better deal.
Even today there are some car brands where discount is never offered. Mostly they are in the higher price echelons of the exotic car marques, but there is one mid-price car which you will not get a deal on, and that is the Tesla Model 3, or for that matter any Tesla. That’s because they don’t have dealers. Almost all their cars are sold online. Purchasers go through the same process they would if they were buying something from Amazon. There is no-one to negotiate with and no voucher-code available. If you are referred by an existing Tesla owner, you might get 1000 miles worth of free charging (value about £60) and that’s it. This is not because Teslas are in short supply. It is because they made a policy decision, and as long as they own the distribution channel, stick to the policy and make it impossible for a purchaser to get a discount the policy will survive. But if word gets out that some people did get a discount, the policy will die very quickly.
I’m a Tesla driver. If you want the £60 of free charging I’m happy to refer you when you place your order (I don’t think there is anything in it for me). Drop me a line.
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About the author:
My background is sales and marketing. I read Law at University and worked for 2 major packaging companies for 13 years in sales and sales management. I joined John McMillan and Scotwork in 1984. For the next 25 years together with our colleagues we delivered training and consulting, built the global business and developed the Scotwork product portfolio.