Remunerator News

Apr 20 2021

What the New Dealership Fixed Pricing Model Means for You

Multiple car brands including Mercedes Benz, Honda, and Subaru, have announced that they are introducing a new car pricing model, fixed pricing, across their dealerships. This pricing model is already seen across Tesla dealerships, where a non-negotiable price is advertised on their website and within dealerships.

What is fixed pricing?

As the name suggests, dealerships will now sell cars nationwide at one price driveaway pricing. Therefore, the price of a car across the country is standardized regardless of what dealership you are walking into or how experienced you are in negotiations.

In this new shift, the car manufacturer will own all vehicle stock in the national network as opposed to dealers buying and on-selling the stock on their showroom floors.

How will it affect you?

The new pricing model has been introduced with the aim of improving customer experience and shifting from a ‘volume-driven business to a quality business.’ Ultimately moving brands to a more upmarket approach.

The new simplified process for buying a car removes the need for negotiations that many customers dislike and dread. The exercise of shopping around at different dealerships will be eliminated entirely. The price of your new car will remain the same whether shopping online or in a dealership.

The new pricing structure rollout is scheduled to be adopted by Honda from July 1 this year. Mercedes will be following closely behind from January 1, 2022.

As a result, smaller dealerships in the metro area are expected to close their doors. Honda will reduce the number of their dealerships from 106 to around 90. It is unknown how many Mercedes dealerships will close. This means that customers will face travelling further for routine maintenance and to visit a dealership.

Many dealerships and the Australian Automotive Dealers Association (AADA) opposed the move as many customers rely on the ability to get a discount on such a significant purchase.

A drop in sales for the brands adopting the fixed-price model is expected. Generally, customers appreciate the right deal just as much as the right car. It is likely that customers will flock to competitors of Mercedes and Honda where they are offered special discounts.

How can you secure a discount with on a car with fixed pricing?

A novated lease with Remunerator still allows you to experience discounts on your new car, regardless of the pricing structure used by the dealership. We give you access to fleet pricing on new cars and open you up to GST savings on the purchase of your new car.

Talk to our novated leasing specialists today on 1800 501 703 or to learn how much you can save on your new car.