A NEW WAY TO BUY CARS

The end of haggling with dealers is nigh in some showrooms, as car makers adopt a direct sales approach. We find out why

- Claire Evans

EVERYONE LOVES A discount, but haggling over the price of a new car in a dealership isn't something most buyers relish. What Car?'s online New Car Buying service takes the hassle out of haggling, but the days of negotiating for better deals could soon be numbered, because some car makers are taking direct control of the sales process.

This relatively new sales method is called the 'agency model', in which you in effect buy your new car directly from the manufacturer, rather than from a franchised dealer, as has traditionally been the case.

Although new cars have a recommended retail price, it is currently just that - recommended so it's not necessarily the price you'll end up paying. At present, franchised dealers buy stock from the manufacturers at wholesale prices. They apply a margin or percentage to that price which is their profit on the sale, and they can decide to offer discounts to buyers by giving away some of the margin.

Conversely, with the agency sales model, the manufacturer owns the vehicles that you'll see in dealer showrooms, sets the prices for them centrally, organises the finance and sells the cars to buyers. The dealers are still involved, acting as agents who facilitate the sale by helping the customer to choose the model and specification of their car, providing test drive opportunities and dealing with the handover process. Instead of making a profit on each sale, though, the dealer gets a service fee for looking after the customer.

The upshot of this is that the dealers can't offer discounts beyond any offers issued by the manufacturers, so there won't be any point in trying to haggle with them or pit one against another to negotiate a better deal.

On the flipside, it means the price you see online or at one dealership will be identical to that at another one, so you don't have to worry that you're not getting the best deal.

Why things are changing