Why this high-volume dealer took plunge into no-haggle pricing

Donna Harris covers automotive retailing for Automotive News.
Come Black Friday, Bill O'Flanagan, president of Reedman-Toll Auto World in Langhorne, Pa., will promote no-haggle pricing on new vehicles for the first time ever. The campaign includes radio, TV, newspaper and Internet advertising.

The dealership has had fixed prices on used vehicles for many years but introduced it on new vehicles two months ago. The move hasn't hurt O'Flanagan's business. He says he has been the top-ranked Chevrolet and Chrysler-Dodge-Jeep dealer in the region. His Subaru, Mazda, Jaguar, Lincoln and Mercury sales aren't hurting either.

What's his pitch?

All the ads will direct prospects to the dealership Web site for the “Lowest Prices on the Internet” for O'Flanagan's area. He regularly checks average grosses for competing dealerships with factory reps and has confirmed his average grosses are indeed the lowest.

O'Flanagan believes it is just the right strategy for the times. Here's why:

• Women buy more than half the new vehicles, and they influence many other deals. Typically, women dislike negotiation.

• People are busy and want to speed up the transaction these days. Negotiation slows it down.

• Car shoppers do most of their browsing online. If the advertising directs people to O'Flanagan's Web site, they can confirm the prices are low.

• People want transparency in their transactions. Many like the offer of a fair, competitive price right up front.

O'Flanagan recognizes that he'll lose some customers for refusing to negotiate prices, but he thinks confrontational selling would lose him a whole lot more. And he believes people will be so happy with the sales experience, he'll win more repeat and referral business.