I think you should try it and see what happens lol. Oh and by the way your salesman made a commission on selling you that financing, he was not doing you a favor. That saved you money and made him money...which is totally fine just don't believe there wasn't anything in that for him.

And by the way, I am always great to deal with as a customer, I just know my stuff and negotiate the best deal for myself that I can. I am a second generation salesman and have a ton of respect for salespeople.

I have no doubt I could buy a car for MSRP or a little less in this environment, I would just likely have to get a car from CA or something. The point is, if I'm just going to pay MSRP I'd rather just buy it from the manufacturer directly.

Hence why I said rent controls don't work, but that doesnt mean no regulations work.

I'm not advocating for price controls here, I'm advocating for allowing manufacturers to sell direct to break up the stranglehold dealers have on the market.

 

Exactly. From everything I read, Tesla service is horrible, and there are long waits for warranty service appointments. Its incredible how spoiled we are in the US when it comes to car prices, warranties, and service and take things for granted. Take Russia as an example, I am not sure if they have dealer networks or OEM service centers, but many of the same brands offer much shorter warranties in Russia than they offer in the US, and the warranty requires full maintenance record at the official service centers. Skip a recommended service with all the $1000 "coolant flush" and other bs they charge for, and the warranty is void.

Other words, be careful what you wish for.

 

You know it used to be the same way here right? Until government regulation made that illegal. Its called the Magnussen-Moss act.

 

I agree. Government intervention in price doesn't work well in free markets but deregulating the franchise hold would be perfect. Let the dealers compete with the OEM

 

Not familiar with it, but the warranty policy is set by the manufacturer, not the dealer, and if anything a third party dealer may be more likely to try and push warranty repair even if it the cause is customer neglect. As long as they are being reimbursed by the manufacturer, what do they care.

For instance, my step father once leased a Qx4 and went maybe 40k without oil changes until the engine seized. Reluctantly the dealer replaced the engine for free under warranty, despite it being easy to prove 100% customer neglect, the old engine was full of sludge. An OEM service center is a lot less likely to do that.

 

Yeah obviously you're not familiar with it lol. Thats an example of common sense extremely effective regulation that benefits consumers. You said "be careful what you wish for" but the climate in Russia vs here is a result of the fact that Russia lacks the regulations we have here. Thats precisely why it will never be like Russia here.

And dealers would much rather do customer paid work than warranty work, they get paid very little for warranty work. Dealers are an extremely powerful lobby, and they wanted manufacturers to of course require their overpriced service to preserve the warranty and of course manufacturers wanted many ways to weasel out of the warranty. So, the government stepped in in 1975 and passed the Magnussen Moss Act which regulated warranties in the US and what they could and could not exclude, etc.

Why do you think the vehicle price label is called a "Monroney Sticker"? Because it was required by government regulation and is named after the Senator who sponsored the Automobile Information and Disclosure Act of 1958 so that vehicle dealers had to have a standard way of disclosing what the manufacturer charged for all options and the vehicle to create transparency for the buyer.

There are many, many other regulations which create the consumer climate we have in the US that you are equally unaware of.

 

But again, were these customer unfriendly warranty restrictions set by the manufacturer or the dealer to begin with?

 

Still, working for a commission the guy has an incentive to hustle for his and his customer's interest. If the dealers cease to exist and manufacturers start selling direct, there is no guarantees the customers will actually benefit. Look at Tesla, their prices went up like 40%, their service is terrible, and quality control is a joke.

 

It was collectively between the two.

Sure, I work on 100% commission, I don’t have any issue with that.

BUT, right now it’s costing us 5 figures to pay dealers for the right to buy a car that they have sitting right there unsold, so whatever we may “lose” it’s not going to be that much. And, dealers won’t disappear they will evolve and adapt and will still be there to serve you if there is value there for you.

 

We'll see how things play out in long run. If anything, there needs to be a balance between free market and regulations, and often it is difficult to strike that balance, or balance between any other business relationships for that matter. I mean if dealers exist only because of some archaic laws, more laws compounding regulations onto dealers may or may not end well for the end consumers. As someone raised in USSR and becoming a business owner in the US, I'm allergic to government regulations.

 

There always has to be a balance, but by and large we strike that balance pretty well. We’ve tried deregulation, and the result is always negative when it goes too far.

As for dealers, if there is value there then allowing manufacturers to sell direct won’t hurt them. Remember it’s a REGULATION that doesn’t let manufacturers do that. Allowing them to do so would be DEREGULATION, which you claim to be in favor of. So you should be for this.

 

So in this case the regulation was negative and deregulation is going to be positive?

It's a rhetorical question, I personally have no idea if its going to be good or bad. I know the current mess we're in is the result of government lockdowns, and dealers weathered the impact through most of 2020, so now they are making up for lost business and reduction in sales.

 

Clearly it has exceeded the supply, and what's more, i'm not convinced we've seen the worst of it. Some people posted that I was wrong when I said this last year. But the same factors to keep the scarcity in place are still in place, and some are getting worse.

There's still a semiconductor shortage, it takes a couple years for new plants to come online in that industry, and with a new shortage of the Ukrainian neon needed to make the chips, that could worsen further.

Ukraine is the source for VW Group's wiring harnesses, too. There's no guarantee that will improve soon.

Many shortages for the Asian makes and GM came from SE Asian plants having Covid shutdowns. With new Omicron subvariants rapidly erupting now on multiple continents, sorry, but there's every risk that too can happen again.

The same goes for the ongoing congestion of ports and the lack of truckers qualified to empty their contents.

And from the demand side, the sheer duration of this shortage — already two years and counting — has created pent-up demand that puts even greater pressure on the already limited supply.

I have no more idea about whether car dealers are colluding than I have about the real estate business. But whether they are or not, it's impossible for them to fake the fact that all of them have lots empty of unsold new cars. And that situation, in my humble opinion, is likely to continue more or less indefinitely.

 

There is so much conflicting info out there, I don't even know what to believe anymore. I read the other day the semiconductor shortage is completely fabricated, apparently there are distributors hoarding chips. Not sure how much truth there is to it. There also rumors of entire industries shutting down across Europe due to lack of raw material supplies from Russia and Ukraine.

When it comes to truckers, I read that there is a sharp decline for trucker demand, and in my business shipping rates have dropped sharply - I can have things air shipped from overseas for the same cost as boat shipping just a couple months ago.

The realist in me knows everything can get a lot worse, lol.

 

SW17LS - you're not lacking in confidence about your experience, skills and opinions and basically dismiss anything that doesn't align with yours. perhaps we should just put you in charge of the whole world.