tex2670

Independent dealers aren't going anywhere, and the government isn't going to regulate them out of business.

But I feel like there should be some "disclosure", similar to when you are getting a mortgage, that shows you all the add-ons and charges the dealer is going to try and extract from you. They purposely wait until you are in the F&I office to spring some of these on you, because you've been worn down by then. Especially the buyer who is buying that day, just walking on to the lot. I saw it last year when I helped my MIL buy a car - sitting at the dealer for 2.5 hours, and having them try and slip a $1000 wheel and tire protection package by her without saying a word.

AMIRZA786

I totally respect your opinion on dealerships @Hoovey689 , and I agree that it would be a much better situation if the dealerships were under the manufactures control, but unfortunately they are not. They are independent franchises that need money to run, and more than that, they need profits. Remember the "I drink your milkshake" scene in There will be blood? Just like the movie, they take a long straw and (figuratively) drink your milkshake. In my mind, its basic mathematics. The manufacture sells a car for $20K, the dealer tacks on $10K, you negotiate and get maybe $5K off, and you end up paying $25K in the end. Where's the deal in that...please someone help me understand....

In case you haven't seen There will be Blood:

Margate330

Lexus dealer down here in S. Florida is no haggle last time I checked on a price of a used car.
I'll put it this way... not going to find any deals there.
The price is firm regardless of peeling clear coat, bald tires, leaking struts, cracked leather seats, multiple accidents reported on carfax, it doesn't matter, they won't take off a penny.

SW17LS

Issue is many car dealers will no longer sell cars for MSRP, you have to negotiate and scour the country to get one for MSRP.

If I'm going to have to do that much work to get a car for MSRP, I'd rather just pay MSRP to the manufacturer.

patgilm

I think if a manufacturer has its own stores/dealerships then a consumer only pays one price like Tesla but if it has to compete with distributors/retailers/dealerships you likely will be able to pay less at the distributor/retailer/dealership because they can offer discounts. Using the Best Buy analogy, I am always able to get Apple products on sale there vs buying directly through Apple. Also, I don’t care to buy directly through Apple since I can get any warranty service through Apple regardless of where I buy from. My last AirPods were $50 off at Best Buy, no discounts through Apple at the time.

Going back to the dealer model for service, there is a benefit sometimes for warranty work since my dealers have been able to fight for me with the manufacturer to cover something under warranty and it works out for them since they get paid by the manufacturer. With my recent experience with going through the manufacturer on something that should have been a warranty item, the manufacturer said they wouldn’t cover it and there was nothing I could do about it but pay for it.

JeffKeryk

The market sets the price. The dealership is an added cost which is reflected in the sales price; working for free or at a loss is hardly good business.
It is important for car companies to make a profit so they can improve their products and grow the business. Dealers do not improve the product; they are simply middlemen is fancy buildings.

tex2670

Ok but for a car purchase, people are still going to want test drives. And inventory will still need to be kept locally. Which means that the direct-sale model means the manufacturer inheriting those dealer overhead costs.

AMIRZA786

Before I bought my Polestar, I setup a test drive online. They gave me a choice of coming to their San Jose space or them bringing the test drive vehicle to my work. Here is my thread on this:

https://www.clublexus.com/forums/car...estar-2-a.html

patgilm

Same here, I scheduled a test drive with Tesla just like anywhere else. It was less than ideal because Tesla’s customer service sucks but test drives shouldn’t change unless the demand is so high that there are no cars to test drive. In my case I had to test drive a Model 3 because there weren’t any Model S’ to test drive anywhere due to demand and all were customer ordered cars.

tex2670

Ford ain't Polestar. They do not have the capacity to do this for every customer like a small brand with a limited lineup does.

tex2670

Again, this does not translate to a manufacturer like Ford. "Oh, hey, sorry, we don't have any F-150s available, so here's your EcoSport for your test drive."

Tesla's model works for Tesla because of its size and it's limited lineup of EV cars.

AMIRZA786

That's an excuse to me. If a small company like Polestar can do it, a huge conglomerate like Ford can do it. You can set up "spaces" for people to go to test drive, or in places where it's viable you deliver the vehicle for test drives. That's what scheduling is for

iMSQ

1. Y is 5-9% of MSRP
2. dealer gets from manufacturer some $$ back (incentives): dealer holdback (1-3% of MSRP) + floor plan assistance amount and advertising association amount (around $1k)
3. customer will be charged X if buy directly from manufacturer. win-win case - manufacturerdoesn't pay $$ from point 2 above and customer doesn't pay Z

IMHO dealers shouldn't sell cars above MSRP. car servicing and maintenance should be their main source of income (dealers charge "per hour" 2x of indy shop price), not the brand new car sales

New car market is not a fair market - manufacturers can sell to dealers only, and then dealers dictate the final sale price to customers. As a result, manufacturer has the same amount, customer pays more, and dealer has a huge profit.

tex2670

Perhaps you missed the context of my reply, where someone was suggesting eliminating franchised dealers, and selling direct to consumers?

But I disagree with your premise. Sure, if you live in a town where there's one franchised dealer, and you want THAT car, you may be stuck. I live in metro Philly, and there are 8-10 Honda, Toyota, Chevy, Ford, etc. dealers to choose from. In normal times, trust me, those dealers do not have any upper hand if you reach out to as many dealers as possible to get the best price. Current supply shortage, of course, excepted.

iMSQ