Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
What is the gain from "doing away with" dealerships?
Where do you go for service and warranty repairs? Have the car shipped to the factory? Now that's a great idea.
I am not predicting these in particular, but possible cost reduction opportunities. And it would take time, especially to reduce the fixed costs, just as it has taken many years for many other brick-n-mortar retailers to fail.
You could conceivably do away with most of the sales and office hierarchy.
You could eliminate most if not all the on the lot inventory, the customer is paying that no matter who's carrying the costs (manufacturer, dealer, bank, other)
You could substantially reduce showrooms, just one model of each car, and one of each to test drive.
Smaller showrooms equal lower building costs, building maintenance and utilities. No inventory reduces lot size substantially.
Service and warranty repairs could be consolidated somewhat. GM could service all their makes instead of multiple brand service departments. Many other makes could consolidate too.
Just for starters.
If you don't think it can happen, just think through how brick-n-mortar retailers have devolved. They reduced workforces, reduced inventory (until many stores now have to order what you want as they don't have it), consolidated/closed less profitable locations, reduced ad costs, etc. Every year there are more and more direct sales across more and more industries.
And again, I am not advocating we attempt to force old school dealers out in any way. Just let anyone who wants to sell direct to do so - and let them compete without any protective legislation for either.
As long as people continue to prefer old school car dealers, they'll survive. But they shouldn't be propped up by protectionist legislation.
I simply did a search for vehicle model I wanted, and they were able to find the model I wanted at the price I wanted.
And the vehicle was delivered right to my door step.
Zero involvement with dealership, just the way I like it. No haggling, no stress, no ridiculous games and psychological manipulations.
Will be using this feature again in the future if I need a car. it is true I can't test drive a car, but if it's a brand new car I really don't care about it.
No need for anyone to go to a dealer.
You realize that sale went through a dealer somewhere, right? You basically inserted a middleman into the equation - the credit union - who got that car through a dealer somewhere.
But that's fine - nothing wrong with that if it makes someone happy.
They did lie to you or there was something lost in translation. Making near $4K in finance reserve with factory low-APR programs on anything less that a 6-digit vehicle is just darn near impossible.
You can make that on a car if you mark up the rate a lot - that's about the only way you can get there - but dealers are capped at what they can make when using the factory low APR programs.
Exactly.
Quote:
Originally Posted by iamweasel
You realize that sale went through a dealer somewhere, right? You basically inserted a middleman into the equation - the credit union - who got that car through a dealer somewhere.
But that's fine - nothing wrong with that if it makes someone happy.
They sure did and that credit union loves the fact that he didnt have his loan shopped around to any other banks by some dealer who has several at his disposal.
You must be relatively young. Though it's indeed the norm now, several decades ago it was almost unheard of to take a car home the same day you signed a contract.
I'm almost 60 years old, first new car was almost 40 years ago.
I left with that car the day I bought it, too. Not much choice there, the car I traded was on its last legs.
I'm sure this scenario happens all the time.
Yet people think that persons whose car is dying can wait weeks or months for a new one.
And what about the dealer parts and service departments???
We'll still need parts and service, but why do parts and service have to be part of the dealership model? They don't. There's already a thriving parts industry outside dealers (brick-n-mortar and online), and independent service shops have been around since the beginning of time. Or maybe manufacturers will also restructure their parts and services operations without sales.
What I think most here are saying is just let direct sales exist too. The new car sales department of a conventional dealership may need to change to survive, and allowing direct sales may help induce that change.
I don't think anyone here has said to outlaw dealers, just don't outlaw direct sales (as dealers and some manufacturers are today). It's the same thing that has happened in brick-n-mortar retail for decades, where online has replaced some, but not all of the old brick-n-mortar model. Why should the auto industry or old school dealers be different or protected?
We'll still need parts and service, but why do parts and service have to be part of the dealership model? They don't. There's already a thriving parts industry outside dealers (brick-n-mortar and online), and independent service shops have been around since the beginning of time. Or maybe manufacturers will also restructure their parts and services operations without sales.
What I think most here are saying is just let direct sales exist too. The new car sales department of a conventional dealership may need to change to survive, and allowing direct sales may help induce that change.
I don't think anyone here has said to outlaw dealers, just don't outlaw direct sales (as dealers and some manufacturers are today). It's the same thing that has happened in brick-n-mortar retail for decades, where online has replaced some, but not all of the old brick-n-mortar model. Why should the auto industry or old school dealers be different or protected?
Part of the problem is as cars get more complicated with more computerized controls and emission-related components on them (especially diesels) your independent shops just can't work on these cars as much anymore. Same goes for hybrids and electrics - you think Joe Mechanic down the street is going to be able to fix a Tesla with battery problems or a GM Diesel pickup with DEF System issues? Nope....
The tools and training required to learn how to repair some of these vehicles keeps skyrocketing. In addition, some of these tools are only available to dealers of that particular brand. Manufacturers do not want independent shops messing around inside the complicated electrical/engine/emissions systems so even in states with "Right to Repair" laws the independent guys still can't afford to get these tools, etc. Because of this, the number of independent shops has slowly been decreasing over time on gas vehicles, and has really gone down dramatically on alt-fuel and diesel vehicles. The future may mirror the heavy truck business, where most of the dealers do the heavy repair & electrical work and the independent shops are limited to doing oil changes, brake jobs, etc.
I've NEVER bought any car that I didn't take home the same day.
But I am sure you realize that there are some car brands where that is not possible. It sounds like you have limited yourself to cars that you COULD take home the same day.
You couldn't do that with many of the Japanese Supercars during their hay-day, nor with many high end cars today, they only keep one or two of the expensive (exclusive) cars on the lot.
My local BMW dealer has exactly 1 (one) BMW M8 on the property; it is Blue, if you wanted red, you would have to order one delivered.
What makes you think that you're getting a better deal? In that situation, Ford or Chevy or Tesla will set the price, and that's the price you'll pay. Hint...its MSRP.
Sure, they will throw out periodic incentives, but there is no incentive anymore to compete for your business. If you want a seamless, enjoyable transaction on a new car, walk into the dealer and offer to pay sticker price.
The dealership model is the worst...aside from all the others.
It's better for consumers to purchase vehicles directly from the manufacturer. Consumers will not pay the MSRP, they will pay the dealer invoice. Tne manufacturer sells the vehicle to the dealer at invoice. The dealer then marks the price above invoice and sells it to the consumer. The manufacturer will simply cut out the middle man in the dealer and offer the same invoice price to the consumer. So I fail to understand why you do not think consumers will benefit from purchasing from the dealer?
There are exception when the dealer will sell the car at the invoice price. The most common reason is the dealer receivers rebates or money from the manufacturer to sell a certain model or year. The dealer will pretend they are not making any money because they are selling it to you at or just below invoice. The only the time the dealer offers the car at invoice is if they are trying to make room for newer models.
Quote:
Originally Posted by Coldjensens
dealers buy from the manufacturers, so and price setting by the mfg will occur anyway. The dealer merely adds another layer of profit into the deal on the car. More overhead, marketing insurance, rent, administration, taxes, salaries and profits to pay. Dealers operate with the goal of tricking the consumer into paying as much extra as possible. Difference in dealership prices are not discounts, they only reflect how badly the dealership gouged one buyer compared to another. They certainly do not create any competition that reduces prices. In fact, I do not see that they add anything at all, especially now, when you can just pick out what you want on the internet and have it delivered or go pick it up from a MFG facility.
Everything you said is 100% accurate. I cannot believe this is not common knowledge. People are fooled into thinking they are getting a deal from the dealer versus the manufacturer who will "sell at MSRP" People are really uneducated on this topic. I couldn't believe the OP even posted this. I would have been embarrassed but judging by the responses, a lot of others are equally ignorant.
Dealerships will be a thing of the past. There will be select manufacturer owned centers to test drive vehicles and then people will just order their vehicles on-line. I ordered my last car on-line and it was an amazing and simple procedure with no haggling or games. You get exactly what you want to without having to pay for useless upgrades you don't use.
Last edited by azriverfan.; 04-16-2017 at 04:19 PM..
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
