Dealers getting caught and fined. Anyone hear of this before?

[av8or]

I agree with you. I think the biggest consideration is lack of market competition personally. You know how it goes, you give a inch & they take a mile. Direct would eventually cost the same as it would at the dealer.
Either way only time will tell! I for one, like my job & say they keep it this way for a bit lol.

I believe the competition comes from the products themselves just like all other products. We don’t need dealerships for other products to spark competition. The manufacturer has to make a good product competitively priced or it won’t sell. Ford makes a truck and sells it to the dealer for a lower price than the dealer will sell it to me for. How does this cost the consumer less than if ford could sell it directly to me? it was necessary before the internet and farther back when transporting a car or travel was a bit more difficult. It’s simply not needed anymore and trying to protect it a waste of time, energy, and money.

IMO and I welcome them all.

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[RandyMarion CDJR]

I believe the competition comes from the products themselves just like all other products. We don’t need dealerships for other products to spark competition. The manufacturer has to make a good product competitively priced or it won’t sell. Ford makes a truck and sells it to the dealer for a lower price than the dealer will sell it to me for. How does this cost the consumer less than if ford could sell it directly to me? it was necessary before the internet and farther back when transporting a car or travel was a bit more difficult. It’s simply not needed anymore and trying to protect it a waste of time, energy, and money.

IMO and I welcome them all.

I agree with your opinion here more so than my own! Just makes sense.

Do you think if the market were to shift to this, that discounts would remain intact after a few years? We have all seen the market disruption caused by the chip shortage, and the most likely permanently remaining price hikes as a result. Not much to stop manufacturers from doing roughly the same. Regardless, we would see a much more uniform market when it came to fees/ add ons/etc. which is always a plus especially for those with lackluster negotiating skills.

 

[rikity]

The problem that most of you have with car dealerships boils down to what you are paying. As long as the structure exists of holdback, dealer bgp, invoice and msrp there will be a fluxuation of what you are paying. You're getting angry because you think that the cost of a $60,000 Jeep is $30,000 and they are making a 50% profit and then a profit on window tint, anti theft and other junk adds. When the day comes that there is no longer a discount for calling or visiting 20 stores, then you can widdle away at the hostility towards the dealership model.

Selling direct really only works for a handful of people. The part that really doesnt work is the secondary market. Any of you trade anything to buy a Tesla? How many people want to sell their own car every time they need to get a new one? How many people wont buy a used car privately because there is very little regulation?

Manufacturers are making inroads to a semi-direct business model of ordering online and picking it up at a dealer, or having it delivered like a pizza (months or years later). There are a lot of buyers that dont have the luxury to wait for an order to be built and shipped though. What are you going to do if your vehicle gets totalled? Pay for a rental for a year waiting for your order? Or worse its a business vehicle and you cant do your job for months because you dont have a truck. Thats where we are right now, dealers dont have vehicles on the lot to buy so you have to order it. Ford shut down orders for Super Duty's for the 2022 model year. So even if you have the time to wait, you cant order one for 6 months and then you have to wait 6-9 more months for it to arrive.

There is no good answer here. Carvana sounded like a great idea, but they have a major problem and they are hemorraging money because its not working. Its going to be really hard to find a one size fits all direct to customer business model that works.

 

[Senrusho]

Thats a dangerous road to go down.
May as well get rid of ALL salespeople altogether and buy EVERYTHING on line via Amazon and the like.
How many jobs will be lost if we went that route?

Why should that matter? They don't do a whole lot other than suck money out of the consumer (and many are downright scummy). Direct sales should be cheaper as there is one less business that needs to add their profit margin into the mix best case, and one less business to SCALP you in the worst cases.
As far as the job market question is concerned it would surely be a net loss, but not a total loss. the manufacturers will need to add to their workforce to include both more technical positions to manage the added processes, and more customer facing positions to help people who have questions. Dealer networks will also still have to exist in some capacity for service.
I don't understand why protecting a bad, anti-consumer, industry for the sake of the few jobs it creates should be seen as a valid argument.

 

[Hennessey17]

I found an old article from 2017 where there were 6 states remaining that you couldn't buy direct. I'd expect a couple more have fallen since then.

Tesla worked with their laywers to very carefully structure it. They don't run dealerships. They have galleries, where you can see a car. You can not buy the car that is in the gallery. The people there can't sell you a car. You have to go home and buy it yourself online. They have service centers, located seperately from the galleries...also not dealers. So they have carefully constructed the process to work around the dealer laws. I expect Rivian is following a similar path.

Wisconsin is one of them. Cannabis is still illegal as well. So people just drive to IL for both. And WI misses out on the taxes (at least on the weed)... some states prefer to shoot themselves in the foot...

 

[SickArcher02]

Direct to consumer sales of automobiles is not something I see happening anytime soon nationwide. Why not? Quite simply because to own a dealership you have to be really rich. To own a chain of dealerships, you have to be filthy rich. If there’s one thing that rich people are willing to spend lots of their money on, it’s protecting their ability to remain filthy rich and get even richer.

Enter lobbyists. They are paid obscene amounts of money by filthy rich dealership owners to distribute to more rich (usually) people to make and enforce legislation to protect their ability to be the only means of selling automobiles to consumers. Some, like Tesla for example, come around every so often challenging the status quo attempting to sell directly to customers. In most cases like that attorneys general like Ken Paxton in Texas (who coincidentally just happens to be facing a stack of federal corruption and bribery chargers) slap it down. They are getting a piece of the same pie the dealership owners baked for the lobbyists, politicians, and judges.

Even the richest man in the world lost this fight because there’s only one of him and thousands of dealership owners and conglomerates against him. Remember, rich people tend to only be willing to spend lots of money to stay rich or get richer, not to benefit the filthy unwashed consumer.

Because capitalism.

Because capitalism....provides an open market for many automakers and vehicle models. Capitalism is why Tesla exists as does Jeep, Ford, etc...

Because capitalism - you have a $50K+ Rubicon as opposed to a $25K Honda Civic like everyone else would have under a socialist economy.

It's incorrect to blame a capitalist market for politicians and lobbyists. That's like blaming a symptom for causing a disease. It's the politicians who allow the lobbyists to sway their vote. The same politicians and the same lobbyists would be pulling the same shenanigans in a socialist economy.

 

[Av8Chuck]

I have not read all of the posts so sorry if this has been covered. A lot of people are conflating Direct Sales (Online) and Distribution models (Dealerships).

If you purchase a car online who will provide the warranty service? There's no free lunch here, margin needs to be built into the cost of the car to cover warranty and build quality issues of new cars. Most luxury brands like Porsche or Jaguar provide no maintenance warranties where the purchaser doesn't pay for any maintenance for three to five years. I recently had an HP Fuel pump grenade itself and the motor had to be replaced, costs $28K and took two months. Covered under warranty. I wish it hadn't happened but honestly I didn't care, didn't cost me a penny and I got to choose a different Porsche to drive every week.

Almost every industry where the Internet has decimated the distribution of products the quality of the support has gone way down and the cost for support way up. Manufacturers need a strong distribution channel, you can argue that dealers suck, then don't buy from them, find a dealer that doesn't suck.

Sure, you can purchase a Tesla online but you can't get it service online (diagnosed and firmware updates yes) but you have to take it to a Tesla Service Center (which looks remarkable like a dealership) and recently in Southern California a lot of Tesla dealerships are starting to pop up.

 

[narcotik33]

Thats a dangerous road to go down.
May as well get rid of ALL salespeople altogether and buy EVERYTHING on line via Amazon and the like.
How many jobs will be lost if we went that route?

Who cares if it makes it more affordable

 

[Vinman]

If you’re out of a job how does that make anything more affordable?

And you can bet your ass that if the dealership pays $40k for a vehicle then marks it up $5k to make a profit deleting the dealership out of the equation will let the manufacturer sell it directly to the public for $45k

Who cares if it makes it more affordable

 

[AFD]

When I bought my Jeep the first thing I said to the salesman was I’m talking out the door price and I don’t care how you get there. Kind of hard for them to add the “hidden fees” and “extras” after that.

"Sure thing buddy, your Sport JL is only $199/mo for 300 months, 'out-the-door', all fees, taxes, interest and trade included."

 

[Nitehawk92]

I do not trust anyone who makes more money by charging me more money. People will do to you what you let them do to you. The Internet age has made car buying a much more pleasent process. I bought a car without even visiting the dealership or talking on the phone. The car was actual at a different dealership, and they transferred it to their dealership (back in 2014). I emailed 8 dealerships in the Dayton, Cincy/Columbus area specifying exactly what I wanted and what I was willing to pay for it. Six dealerships said to come in and we could talk about it, and two dealerships told me they would meet my demands. I told them I was not willing to pay more than $25,000 for the car and they got me out the door at $23745. I was pleasantly surprised that they didn't get me out the door at $24,999.99. Matt Castrucci down by the Dayton Mall in Centerville Ohio. But I still do not trust car dealers, and used car salespeople are the worst.

 

[Vinman]

"Sure thing buddy, your Sport JL is only $199/mo for 300 months, 'out-the-door', all fees, taxes, interest and trade included."

Yeah, except I paid with a cheque, no monthly payments, trade-in or interest.

 

[AFD]

Yeah, except I paid with a cheque, no monthly payments, trade-in or interest.

Yeah, same. Just saying they'll try to obfuscate their numbers any way they can.

I'm legit amazed at some of the people I talk to that really don't know what they just paid for a vehicle (or how much they received for a trade), other than the monthly loan payment amount due for an obscene term.

 

[COBill]

If you purchase a car online who will provide the warranty service? There's no free lunch here, margin needs to be built into the cost of the car to cover warranty and build quality issues of new cars. Most luxury brands like Porsche or Jaguar provide no maintenance warranties where the purchaser doesn't pay for any maintenance for three to five years. I recently had an HP Fuel pump grenade itself and the motor had to be replaced, costs $28K and took two months. Covered under warranty. I wish it hadn't happened but honestly I didn't care, didn't cost me a penny and I got to choose a different Porsche to drive every week.

Dealerships can transition to manufacturer service depot.

Lose the sales side, but enough people will bring their vehicles in for service at $150+/hour (as they do now) to keep that side of the business afloat.

Also, of note is that Porsche does not provide free maintenance; from time to time they've paid for the first, but that was a promotion.

 

[Speedneed]

AFD you nailed it! I was in a related business, can confirm that most consumer cars and trucks are sold based on monthly payments regardless of actual price or ultimate cost. It’s very sad.

I don’t think Carvana or Amazon- style shops are comparable, since they aren’t really risking their brand beyond a few forum posts or Yelp reviews. They’re just other car dealers, online. Tesla is the direct to customer model.

I for one would buy direct from a manufacturer over a dealer in a heartbeat.

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