Finding any price gouging?

[KaDeTime]

Dealers are not needed in today's life. look at Tesla example you want to look at a car and see it go to a manufacture store you want to order one you order the exact one you want. You don't pay a penny more for what you don't want or for someone to click order car on the web.

Plus i love how you buy a "new car" at dealer with 200 plus Miles that other people "test drove" or the owner had it home few times. From my professional experience trust me we would all benefit if you order a new car from the manufacturer and only purchase used car from the dealer as that is all they are anyway.

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[Jeepsmashin]

 

[Rubiwon]

Tesla has never made a profit. It loses millions of dollars every quarter. If carbon credits go away, every Tesla store would become a forever 21 at the mall.

 

[RussJeep1]

There are industries where manufactures use both dealer networks and their own marketing facilities. It depends on product, and industry and is a function of the nature of what is being sold, the need for the purchaser to try it before they buy it, and the strength and market dominance of the manufacturer.

Dealing with large goods that hone in on highly specific user tastes, like cars, (as opposed to say toasters) someplace has to exist for prospective buyers to metaphorically kick tires.

Additionally in the case of products with large numbers of moving parts, all subject to wear and tear and need for service: automobiles being the near quintessential example of same, there's got to be someplace nearby equipped to service things.

Again, eliminating the dealer is plausible, but eliminating what the dealer does is not, especially in some product markets--much as those which don't apply (often products with high value, small, and limited moving parts to break) are being moved to an internet dealer presence, where inventory can be housed in places where real estate is relatively cheap, often far away from the population centers (while real estate is relatively expensive) in which most of the country live.

For the time being, car dealers, many of which carry numerous brands, and car manufacturers, which make many models, is likely the lessor of all evils in keeping consumer cost lowest for the average consumer..

 

[KaDeTime]

Again, eliminating the dealer is plausible, but eliminating what the dealer does is not, especially in some product markets--much as those which don't apply (often products with high value, small, and limited moving parts to break) are being moved to an internet dealer presence, where inventory can be housed in places where real estate is relatively cheap, often far away from the population centers (while real estate is relatively is likely the lessor of all evils in keeping consumer cost lowest for the average consumer..

Why do you need to keep inventory you order the car exactly you want and it manufactured. Shour you have to wait max two months. Dealers are useless, just extra cost to the purchase of the car.

 

[KaDeTime]

Tesla has never made a profit. It loses millions of dollars every quarter. If carbon credits go away, every Tesla store would become a forever 21 at the mall.

Yes you are right Tesla is a complete failure and so is Apple, and google and don’t get me started with the Microsoft they are completely gone.... can’t believe sometimes what people think.

Do you or your family works at a dealer?

 

[RussJeep1]

The “Adam Ruins Everything” series of videos harnesses its success in large part by channeling into people's frustration with things, who when angry don't sometimes take a step back to examine some of the flaws in the arguments being made.

(Love him or hate him, its widely held by all parties that this was our current President's method of election.)

I think the videos are funny—they have elaborate effects; still more I hate car dealers/sales people. But prudence suggests that I create a verbal version of an “Adam Ruins Everything” video, on none other than....”Adam Ruins Everything” videos themselves—or at least this video.

“ You have no choice in where you buy them (new cars.)”

The marketplace has numerous competitors on the same brand, let alone other brands. Plus, “the marketplace,” as evidenced by dealers like Koons, where people fly in to buy Wranglers these days, is today the entire Continental US if the dealer's price is right.

“If you want a new car you have to go to one of these awful dealerships.”

Yes, dealerships can be a pain. They exist in the car buying world because they are actually the cheapest way, on the whole, at least at the present moment, for manufacturers to market their cars. If/when different marketing models emerge that are better, dealerships will die—or did you think 10 years ago that Macys, J.C. Penny, Sears, etc. would be closing their doors due to the internet?

Dealerships allow for the specialization of labor (making a good versus selling it) which makes for efficiency, which makes for, believe it or not, consumer savings.

You have a job, you're good at it. You ought to be, you've been doing it long enough. You make money and buy the goods and services of other specialists, who because of their specialty can offer the best goods at the lowest prices. You prefer to live in this world versus one in which you must be your own farmer, mechanic, doctor, and iron worker.

“Why do dealerships even exist?”

Because car buying is a process that necessitates that at some point, prospective buyers leave their computer screens and visit a location in which the product is housed. Cars aren't comparable commodities like Dell or HP Computers where simply specifications on hard drive size, and processor speed, etc., may be most of what the consumer needs, and housed on the internet, along with price, to make a purchase decision. There are intangibles like how the car appeals to your sense of taste when you are right in front of it.

“I hate haggling.”

Then go to a dealer who makes good and simple deals like Koons. One catch. You can eliminate a large part of what the dealer is charging you for (marketing) but you can't eliminate what the dealer does (among other things educate you). That you must do elsewhere, or on your own.

“Why does one dealership only sell a particular brand of cars?”

Many dealers sell multiple brands, in the same or different physical locations. Many dealers tend to congregate in the same basic area of a city, which benefits you. And yes, many manufacturers may not like dealers who sell other brands as well, and with enough power, can control this to some extent.

In fairness to manufactures, take Infiniti. This manufacturer wants their dealerships to be upscale. It is precisely why it's an offshoot of Nissan rather than Nissan itself, just as Lexus is of Toyota, and Acura of Honda. They probably don't want Kias (no offense to Kia) being sold at the same place, much as these 2 brands don't much compete with one another.

Book stores, the example used for how life would stink if they only sold a few author's works, sell tiny inexpensive goods that require nearly no service. These book dealers don't need much knowledge of the product, the consumers can rate the product on other's reviews alone, and historic books not withstanding, it's the content between the pages, not its binding etc., that is of interest, so there's little need for upselling the product, like sunroofs in cars.

And the fact is that book stores, because of these facts, are going away in place of the internet. Not only can physical books be sold there, but electronic ones as well. Talk to me when when you can download instruction codes to have 3D printers build us a car—much as small replacement parts ARE taking this route.

“Why can't you just go to a car store, buy whatever brand of car you like, and get a fixed price.”

Because when you ask, “can I get the chrome gas cap cover on the Sport S?” the guy with the name tag that says “Tom” is likely to not know or even be able to go to someone there who can answer that question: there is just too many brands with too much specificity in each. And where do you suggest we house this super store in urban markets, on air craft carriers?

Would you like proof that what I'm saying is true? Have you ever asked a relatively specific question in a big box home improvement store to some kid who doesn't know plumbing from building materials? Yeah, me too.

I know. You retort, “I know more than my dealer selling 1 brand.” I hear you. Can you imagine how ignorant they'd be if they sold nearly all brands?

“Car dealerships get passed down from parents to children.”

And often they're sold too, despite the name on the door never changing, and you never knowing of that change.

“Why can't you buy a car online?”

You can. Bad question. The real question, stupid though it is, is why can't you take possession of a car online. And the answer there is that until we as a society develop Star Trek like transporter equipment you're going to need to go some place to pick it up, and get things like tiny defects dealt with before you drive it off the lot. That place is going to need to pay their electric bill and 50 others to keep open, and fairness dictates that you share that expensive with them in the cost of your vehicle.

Franchise laws: they make dealers sound bad. In fact, franchise laws arose out of anti-trust legislation to prevent manufacturers from having too much power. The “S” in "MSRP" allows dealers the power to sell at different prices, which the manufacturer can only “suggest,” which benefits consumers. If dealers collude on price—yes that would be wrong. But these laws allow dealers to compete, free of too much manufacturer oversight. And when they compete, you win.

“You must be a dealer to sell their brand. “

Only new cars, and for purposes of protecting the image of the brand so that those who represent it are, if not knowledgeable, then at least have a place they can go to get answers.

“It's illegal to open another dealership in that territory.”

This fact does not hurt consumers and protects dealers, which by the way, provide consumer services that in their absence someone else would have to perform and charge for.

Do most of us have to travel that far between dealers of the same brand? How would you like it if you opened a dealership, invested your money, and the manufacture could put in a competing dealership next door?

No smart prospective dealer would go for that. There would be no dealers, and the things dealers do would have to be done by someone else, quite possibly at more consumer cost.

Do different dealers of the same brand not advertise in common social mediums? Would they if there were no competition? And who does competition benefit (in addition to the social medium in advertising revenue) but the consumers in lower prices?

“Manufacturers can't shut down sucky dealerships.” They don't need to. Sucky dealerships go out of business, the marketplace does that for dealers.

“Car dealers have no competition and no oversight?”

When corporate walks into a dealer, everyone there is often on their toes.

“All these middle men do is cost you money.” No, they also provide a service, if nothing else a place to house the vehicle you want to check out and service, even the one that you have done most of the research on your own about. To the rest of us, who don't subscribe to forums etc., they explain vehicle basics, they educate, and they risk you walking out the door and buying from a competitor was they've taught you the ropes.

“If manufacturers could sell to you directly...”

If manufactures sold directly they'd need to provide this service, which would cost money. Another thing. Manufactures might have too much power over consumers. Let me give you an example.

You buy a PC. Sure, they all run pretty much on one monopolist's Operating System (Windows)--Linux notwithstanding, but the hardware manufactures compete for your business.

PCs have their strength and weaknesses as do Apple Computers, the latter enjoying monopolies in both the operating system and hardware space.

If your computer needs service, I assure you that PC makers will be more receptive than Apple. They have to be, they're competing for your hardware dollars.

So for all the money that Adam thinks will be saved if the dealer did their own marketing, subtract from that some intangible monetary amount that their lack of competition will cost you when they are the only game in town selling and backing their product. Sure, they still have to answer to the marketplace of unhappy customers, just as Apple does for users who had to pay for hardware repair that on a PC might have been warrantied, but it comes at a cost to consumers.

Rephrase: the Apple store in the mall costs Apple lots of money in rent and salaries.

“You need a car to get around......”

Not as much in urban areas which are growing in size over rural ones. You don't need a new car. You don't need a particular brand. You need not work with the specific dealer in your area once you've decided on brand.

Ever get service from the manufacture via phone? Sure you have. “For the Northeast representative press 1, for Hawaii and Alaska press 2............you're average waiting time is (pause) 3 hours 7 minutes and 22 seconds”

Car dealerships work for the same reason Democracy does. In the words of Winston Churchill, “it's the worst form of government, except for all the others.”

 

[KaDeTime]

Russ do you work at a dealer and is a slow sales day?

 

[MOKE]

Tesla has never made a profit. It loses millions of dollars every quarter. If carbon credits go away, every Tesla store would become a forever 21 at the mall.

While shown as a cash flow lost, the money is generally reinvested into the company. You would have to take a look at all their assets and intellectual properties to see they are very profitable.

 

[BillyHW]

If the current dealership model is so great, why do they need so many laws to keep it in existence?

If the current dealership model is so great, why isn't Tesla begging to operate under the same model?

If the current dealership model is so great, why are they so afraid of actually having a free market in the car industry?

 

[KaDeTime]

If the current dealership model is so great, why do they need so many laws to keep it in existence?

If the current dealership model is so great, why isn't Tesla begging to operate under the same model?

If the current dealership model is so great, why are they so afraid of actually having a free market in the car industry?

Thank you Billy

 

[RussJeep1]

Russ do you work at a dealer and is a slow sales day?

I am not in any way affiliated with the auto industry. These are economic facts. It is though a slow day in the Northeast where I reside, with snow fall only exceeded by wind, and being a shut-in the norm.

 

[KaDeTime]

I am not in any way affiliated with the auto industry. These are economic facts. It is though a slow day in the Northeast where I reside, with snow fall only exceeded by wind, and being a shut-in the norm.

Take the Jeep and have fun I used to love the snow trails

 

[RussJeep1]

If the current dealership model is so great, why do they need so many laws to keep it in existence?

If the current dealership model is so great, why isn't Tesla begging to operate under the same model?

If the current dealership model is so great, why are they so afraid of actually having a free market in the car industry?

The same questions could be asked of an electric utility. Why all the regulation of price, the law and rules? This must be bad if all these rules are needed to keep in it existence.

Like the dealership model, having one electric delivery is the best model. In the case of the utility, with its one set of utility poles and wires, it turns out to be is the best model for the consumer.....one which economics refer to as having naturally ever decreasing average costs. To say it another way, once the infrastructure is established, adding the next customer costs pennies and each customer's portion of the infrastructure's cost goes down.

But the problem with this is that the utility is granted a monopoly that without laws could overcharge customers.

Similarly, for the time being the dealership model is actually the best one, even if it operates as a regulated competitive entity, not a regulated monopoly--see the speech in the thread above. But in the absence of legislation, either side of the dealer, the manufacturer or the consumer could abuse, or be abused by the dealer...so there are laws--and laws don't mean a market is bad. There are plenty of laws that empower and limit manufacturers, dealers, and consumers.

If the current dealership model is so great, why are they so afraid of actually having a free market in the car industry?

Because, to your point, dealers want to get their hands on a portion of the profit chain. But--and this is an important but--that doesn't mean they don't also provide a necessary service, perhaps just that they take advantage of consumers lacking in knowledge. Laws could change that. But to get rid of dealers all together because some do this stuff to some customers would be throwing out the good that dealers do with the bad--of, if you're familiar with the expression: "throwing out the baby with the bath water."

That they overcharge, or are much more of a waste (but by no means complete waste--you need to see the car before you buy, you need service) for astute consumers like you and me: duly noted.

(See my talk above on why PCs are better warrantied than Apple computers and about the risk of putting repair and hardware sales in one entity's hands.)

Tesla doesn't want to go down the independent owned dealership route. That of course doesn't mean there won't be dealerships or that this model may in hindsight and in the long run prove the best one for Tesla, or not change. It's just that Tesla wants to own their dealerships. It may prove very expensive for them to do that, or not.

I know----broken record on my part: you can eliminate the middle man, but you cannot eliminate what the middle man does.

Stepping back and looking at this model rationally is what I seek to do. Make no mistake, I hate most car salespeople. I enjoy making them squirm when they try to get one over on me.

Once I went to buy a vehicle with practically face war paint on. The salesman passed me a piece of paper with the exact percentage off Invoice I expected.

It was almost a let down.

 

[RussJeep1]

Why do you need to keep inventory you order the car exactly you want and it manufactured. Shour you have to wait max two months. Dealers are useless, just extra cost to the purchase of the car.

KaDeTime: you an I are astute enough buyers that we may need nothing more than an order taker to get our car for us. We go to dealers (hopefully) like Koons with simple and cost effective pricing models that pass along to us the savings of them not having to take the time to explain things to us.

But we did want to see the car before buying, right....at least most of us did. Someone's got to share the costs of housing said vehicle.

Now--for the rest of us less knowledgeable in not only vehicle feeds and speeds, but the buying process, the dealer needs to educate, take time, and for that they deserves a fair fee. And certainly, to I think you're point, not for dealers to take advantage of consumers.

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