Fifteen minutes. That’s how long most new vehicle buyers (60 per cent) want to spend on price negotiations, once the test drive is complete, reports a recent J. D Power and Associates online survey.
“This is likely due to the overwhelming majority of shoppers who build and price their vehicle online before arriving at a dealership,” reports J.D Power in a research note. “In fact, 63 per cent of shoppers say they knew the exact vehicle they wanted (including colour and options) before they set foot in a showroom.”
The point is, buyers become increasingly unhappy with sales staff who cannot or will not come to a deal within 15 minutes of the onset of what many consider to be the dreaded back-and-forth over price. J.D. Power says “buyers have clearly defined timelines in mind, and satisfaction suffers when expectations are not met. In fact, dealer staff would be wise to set the stopwatch at 15 minutes, as overall sales satisfaction with most dealership activities drops significantly after that point.”
Call it the 15-Minute Rule, then. That is, most buyers are willing to take 15 minutes to browse the showroom (sans an interfering salesperson); 15 minutes for the test drive; and 15 minutes to settle on a price. It seems clear that the best, most successful dealerships respect the 15-Minute Rule.
“After a deal is in place, buyers expect to have the final paperwork in front of them quickly,” notes J.D. Power “Again, overall satisfaction declines if they’re kept waiting for more than 15 minutes.”
But there is a key exception to the 15-Minute Rule: vehicle delivery. New owners want to be fully briefed about their new vehicle before they drive off the lot. In fact, when a dealership rushes through the delivery in 15 minutes or less, customer satisfaction suffers. Stores that take 45 minutes to brief a new owner before they take the keys and head off, enjoy a high degree of customer satisfaction.
No question, today’s typical buyer is a time-sensitive consumer who arrives at the dealership well prepared and ready to deal – and most do not want negotiations to drag out for very long. The takeaway for car salespeople is simple enough: respect the customer’s time and knowledge, assuming that he or she arrives well armed with facts and figures. The salesperson who drags out the negotiation, risks angering and thus losing the customer.
Here are details of four deals that seem straightforward enough. Deals of the Week finds it hard to imagine why negotiations for any of the four would drag out more than 15 minutes. As per usual, Deals of the Week obtained pricing information from www.carcostcanada.com, among other sources. Consult your dealer for all the details.
2012 BMW 650i xDrive AWD
- MSRP: $101,500
- Freight, dealer prep, air conditioning tax: $2,095
- Dealer discount (estimated): $4,000
- Factory rebate: $7,500 (Alternate Cash Back factory-to-dealer rebate)
- Taxable subtotal: $100,095
- Total price with 13 per cent HST: $113,107.35
2012 Ford Taurus SEL AWD
- MSRP: $34,999
- Freight, dealer prep and air conditioning tax: $1,650
- Employee Pricing: $2,982
- Factory discount: $4,000 (Non-stackable Trading Dollars factory-to-dealer rebate)
- Taxable subtotal: $29,667
- Total price with 13 per cent HST: $33,523.71
- Factory discount: $1,000 (Costco rebate factory-to-customer rebate)
- Final price: $32,523.71
2012 Mazda6 GT I4 Manual
- MSRP: $29,545
- Freight, dealer prep, AC tax: $1,795
- Dealer discount (estimated): $1,000
- Factory discount: $4,000 (Mazda Retail Cash factory-to-dealer rebate)
- Taxable subtotal: $26,340
- Total price with 13 per cent HST: $29,764.20
- Factory rebate: $1,000 (Owner Loyalty Renewal factory-to-customer rebate)
- Final price: $28,764.20
2012 Toyota Sienna LE V-6 8-Pass FWD
- MSRP: $32,720
- Freight, dealer prep, AC tax: $1,735
- Dealer discount (estimated): $1,100
- Taxable subtotal: $33,335
- Total price with 13 per cent HST: $37,691.15
- Factory discount: $2,000 (Non-stackable Cash Discount factory-to-consumer rebate)
- Final price: $35,691.15
- Can be combined with financing as low as 0.9 per cent for up to 72 months
Pricing information source: www.carcostcanada.com . Calculations based on Ontario customers.
Please note that while the information above is accurate at the time of publication, incentives are given at the discretion of individual dealers, and may be changed or discontinued at any time. Dealer discounts are negotiated with the customer on a case-by-case basis.