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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.
So? I do not care if it is better or worse for the consumer, the dealership model is idiotic and should be done away with.
You say that, but it does serve a purpose. Warranty work, and convenience. The manufacturers don't want to open their own repair shops.
From a convenience perspective, many people prefer to trade in their old car, and there are sales tax benefits that you wouldn't get selling it to CarMax.
The system doesn't exist without a reason. Warranty work was one of the huge drivers; dealerships wanted protections if they were going to carry out warranty work on cars; protecting their business model was one of them.
It doesn't have to be 'done away with', there should just be the choice. If a manufacturer wants to sell direct to the consumer, that is on them. If they don't, that is also on them. There are plenty of smaller vehicle manufacturers that might not have the luxury of having dealerships all across the country. This way, they could just sell direct to whomever no matter where they live.
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.
You think the MSRP is hard set and cannot be changed if the manufacturer is given financial incentive to lower it?
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.
They have service centers, but those were/are merely places that charge people above market rate prices for labor and excessively marked up prices for parts. They certainly do not provide any benefit over independent facilities.
They were a big money racket for a long time, but I think their time has passed. Hopefully in ten years or so they will be a thing of the past.
I would not be sad to see dealerships disappear altogether.
Interestingly there does not seem to be a lot of alternate uses for dealership facilities. Here in Michigan they closed dozens of dealerships because you would have multiple dealers of the same cars within a few blocks of each other. 5-10 years later, most of those dealership buildings are still empty or have been torn down. I do not see any of them being re-purposed. It sure woudl be grea if they would find an alternate use for them.
it doesn't have to be 'done away with', there should just be the choice. If a manufacturer wants to sell direct to the consumer, that is on them. If they don't, that is also on them. There are plenty of smaller vehicle manufacturers that might not have the luxury of having dealerships all across the country. This way, they could just sell direct to whomever no matter where they live.
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.
They have service centers, but those were/are merely places that charge people above market rate prices for labor and excessively marked up prices for parts. They certainly do not provide any benefit over independent facilities.
They were a big money racket for a long time, but I think their time has passed. Hopefully in ten years or so they will be a thing of the past.
I would not be sad to see dealerships disappear altogether.
Interestingly there does not seem to be a lot of alternate uses for dealership facilities. Here in Michigan they closed dozens of dealerships because you would have multiple dealers of the same cars within a few blocks of each other. 5-10 years later, most of those dealership buildings are still empty or have been torn down. I do not see any of them being re-purposed. It sure woudl be grea if they would find an alternate use for them.
Manufacturers do not have costs associated with retailing a motor vehicle, so if the dealers were eliminated and manufacturers had to handle those costs on their own, that would have to factor in the price of the cars. So the question becomes who can execute a retail network cheaper, a manufacturer or independent dealers? It's not as simple as "get rid of the dealers and the middleman costs."
In fact, as experiments like the Ford Auto Collection showed, the current group of independent dealers made retailing work better than the auto companies could do.
Why? Auto dealerships are a very unique business. Overall dealer profit margins are razor thin. On average a dealership return is about 2% of sales which compared to many other industries is terrible. Dealers have to pinch pennies day after day and even the savvy dealers max-out at 4-5% return on sales. Manufacturers are looking to make returns FAR higher than that, so when they took over dealers the car prices went up and sales plummeted.
I believe any automaker should have the choice of whether to use dealers or not. Whatever they choose, though, should be mandated across the country. (So they can't use dealers in one state but not another.) The market ultimately will show which model works best but unless the manufacturers really learn to act and operate like car dealers need to, I suspect the dealer model will still win-out.
Making a car is a whole different ballgame then selling it, servicing it, and also becoming a used car dealer simultaneously.
So you expect the car makers to open a service center in most towns complete with facilities to do warranty work. Got news for ya Skippy, it ain't gonna happen and you have to be some kind of stupid to want it to happen. For folks in the country, expect to drive a few hundred miles to "order" your vehicle. You won't get to see it until you've signed for it and hopefully it comes in like you want cause you're going to buy it regardless. Otherwise, they aren't going to build it. Where will you look at the next vehicle you "think" you might want. The car maker isn't going to throw a bunch of inventory out there at their expense and wait for you to come in. They have much larger fish to catch than one car. Where will you test drive one? Reminds me of Communist Russia. You ordered and paid for your car there. When it came in, it was yours as the waiting list was so long that you already had made all of the payments. If it was crap, it was yours, too bad. That's what will happen here if the dealers go away. They perform a major service that you have no clue about. Also reminds me of the building materials market. Forever folks would go to the mom and pop lumber yards for their goodies and to get advise about how to fix the house and to work with the materials. Now the big box stores are putting mom and pop out of work. The biggest complaint in the industry- the folks selling the goods have no clue about what they're selling. All of the "expertise" is gone now. Be careful what you wish for, you might just get it.
So? I do not care if it is better or worse for the consumer, the dealership model is idiotic and should be done away with.
I rather like being able to go into a dealership, test drive a car and ask questions about it.
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