Dealership Practices
Intermediate
Joined: Aug 2007
Posts: 288
Likes: 22
From: Pennsylvania
Perhaps some people are confusing dealerships with service centers? Tesla has service centers, where you get service and can view and drive cars. Similar to a traditional dealership, but they generally do not carry inventory. Perhaps used Teslas and demonstrators...
Buyers, remember, you are paying for that big beautiful dealership. A manufacturer direct sales process cuts out the middleman. I have not seen a good arguement in favor of the traditional dealership sales model. It simply adds cost with little or no value added.
Tesla is experimenting with another, more radical approach for test drives. They will lease space in a parking lot or wherever. No personell... You set up an appointment on line. They send your smartass phone an app that allows access to a car. Off you go for your test ride. Now, I see issues for those not familiar with say, a Model 3. "Where's the dang start button?" "How do I find neutral?" "Open butthole?"
Buyers, remember, you are paying for that big beautiful dealership. A manufacturer direct sales process cuts out the middleman. I have not seen a good arguement in favor of the traditional dealership sales model. It simply adds cost with little or no value added.
Tesla is experimenting with another, more radical approach for test drives. They will lease space in a parking lot or wherever. No personell... You set up an appointment on line. They send your smartass phone an app that allows access to a car. Off you go for your test ride. Now, I see issues for those not familiar with say, a Model 3. "Where's the dang start button?" "How do I find neutral?" "Open butthole?"
Lexus Fanatic
Joined: Oct 2003
Posts: 94,223
Likes: 221
From: Virginia/D.C. suburbs
If you buy direct from the manufacture you would be paying MSRP. Until this recent chip shortage people only think that is fair when its a vehicle in high demand or a rare car (that a dealer is asking over msrp for). But if its fair to sell a car under msrp has to be fair to sell one over right? So I don’t know if most people would sign up with that. The other question I would have is who would handle all the financing and title work for buyers? Not everyone is paying cash or using credit union autodrafts. Obviously there are alot of unethical dealers. Current model allows people (once inventory levels are back to normal) to get a better deal.
I don't see anything wrong with MSRP-pricing. That is the way Saturn and Scion worked.....and Saturn was extremely successful until GM management screwed up their product-offerings after 2000. If a vehicle isn't selling well at MSRP, then the manufacturer can always lower it. The alternative is the mess have at a lot of dealerships now.
Another rip-off at dealerships is the Processing Fee (in the past, they weren't too bad, but they have become outrageous in the last few years...close to $1000 in my area). That would also be eliminated by direct-manufacturer purchases.
Lexus Test Driver
Joined: Jan 2007
Posts: 7,460
Likes: 232
From: CA
There is a markup from manufacturer to dealer and then another from dealer to customer. If it comes straight from manufacturer, its actually invoice pricing. The whole concept of MSRP is when there is a middle man. When Tesla / Lucid / Rivian sell you a car, it's just flat retail pricing. It's not manufacturer suggested retail price. It's actually cheaper for the customer as there is no margin stacking from middle men.
If you buy direct from the manufacture you would be paying MSRP. Until this recent chip shortage people only think that is fair when its a vehicle in high demand or a rare car (that a dealer is asking over msrp for). But if its fair to sell a car under msrp has to be fair to sell one over right? So I don’t know if most people would sign up with that. The other question I would have is who would handle all the financing and title work for buyers? Not everyone is paying cash or using credit union autodrafts. Obviously there are alot of unethical dealers. Current model allows people (once inventory levels are back to normal) to get a better deal.
Intermediate
Joined: Aug 2007
Posts: 288
Likes: 22
From: Pennsylvania
MSRP is a meaningless number. Dealers have to pay money to buy then store these cars where they can be sitting around for months at a time. Its a gigantic waste of money and guess who pays for it. Dealers are pissed if there are direct sales because they dont get their overpriced cut
Lexus Fanatic
Joined: Nov 2011
Posts: 35,285
Likes: 310
From: ON/NY
Lead Lap
Joined: Nov 2013
Posts: 4,273
Likes: 1,211
From: IL
We spend as much per month in retail stores combined as we do on our car payments.
We pay MSRP - coupons as we did for the cars - rebates.
We research (slightly) and chose our stores for value every week as we did for the car every 4 years.
No one I know heads to the farm for milk and eggs or to China for the shoes and socks.
Local businesses paying local taxes is not a cabal or price fixing, it is the capitalist system at work.
Profit is not a bad word or concept.
We enjoy some of the best choices in products the world has ever seen!
We pay MSRP - coupons as we did for the cars - rebates.
We research (slightly) and chose our stores for value every week as we did for the car every 4 years.
No one I know heads to the farm for milk and eggs or to China for the shoes and socks.
Local businesses paying local taxes is not a cabal or price fixing, it is the capitalist system at work.
Profit is not a bad word or concept.
We enjoy some of the best choices in products the world has ever seen!
Pole Position
Joined: Jan 2020
Posts: 2,738
Likes: 544
From: CA
I'm not a lawyer, but, as I understand it, Saturn and Scion were not guilty of price-fixing, because they did not collude with any other companies or auto manufacturers to set any prices. Saturn's fixed, no-dicker prices applied only to their products....same with Scion.
Last edited by Wilson2000; Oct 17, 2021 at 05:56 PM. Reason: TYPO
Last edited by bitkahuna; Oct 16, 2021 at 06:44 PM.
It maybe meaningless but its something the consumer has conditioned on for years now. I personally dont think if there werent any Ford dealers that you would get a better deal buying direct from Ford. What would stop them from just increasing their price of what they sell a car to a dealer for? These companies love big profits
Whats going to stop them is there are other car companies that wont jack their prices up, thats what competition is. Ford jacks up direct from factory pricing? Then Chevy and Ram dont.
