Will dealerships soon be a thing of the past? | Column | Articles

I worked at a several dealerships in parts and service. I will never forget the sales people and sales mangers at each one of them laughing and high fiving each other when celebrating them screwing someone who just bought a car. They lived for it.

When I buy a new car, which isn’t often, I arrive informed and tell them I’m ready to buy but I want no games. I have my own financing but am willing to use theirs if they can offer a better deal. I tell them I have a two hour limit once I know they have the vehicle I want. 
 

Mostly what I get in return is games and irritation and a feeling of being berkeleyed. I won’t miss them at all. 

I was recently thinking a out this when driving through Sanford, Fl. On one side of the interstate, a HUGE car lot that i worked at many years ago, previously known as seminole ford, with its grand total of about 30 cars on the lot, the rest just open pavement that used to house hundreds and hundreds of new stock autos. 

across the interstate, a shopping mall that is rapidly heading towards being shuttered. 
 

my thought was smash the 2 together. Lots cant keep more than a few cars on the lot. Most is ordering online and waiting like any newer car buyer has found out.  Shopping mall is about empty. Move the cars inside the big anchor stores that are closed and make it an indoor, medium sized car showroom and ordering/pickup facility.  

granted the service dept is still a thing, but its also detached at this dealership. Close the showroom and lot, move that showroom to the “mall” and lease the showroom/lot property to anyone who wants it. 

Let the sales department die a quick, painful death.

I too worked at several stealerships and experienced the same disgusting sales staff jimbob knew. We had ONE sales guy who was decent and treated all his customers like customers and not ‘marks’. He sold more cars than the other three nimrods. Most dealership GMs are former car salespeople and they do not understand (nor want to) how the back of the store works. But, it won’t keep them from meddling in it, trying to make more money.

Dealers will still be needed for servicing because modern cars are simply too complex for the owner or corner garage to diagnose. But the sales model is irretrievably broken and needs to go away.

There is a definite trend for new OEMs to follow the path that Tesla has been blazing. There are no “dealerships” there are “galleries” and you can only order a car through their internet or phone portal. Apparently that is the workaround to dealer franchise laws in the states that they can pull it off.  Most of the new small EV players are doing that and it looks like Ford may be trying to move that way with at least their EV business with splitting ICE and EV sales.  That said, its gonna be hard for the traditioinal big manufacturers to walk that one back. 

Honestly, I dont call them “stealerships” and “salesweasels” for nothing.  

Call me strange, but I HATE when I go anywhere (department stores included) that I have to chase special “sales” and deal with a commissioned salesperson and negotiate a price.  It doesnt matter,  you always end up feeling like you are getting screwed over somehow, or at the very least SOMEONE is getting screwed over. Call me a bleeding heart, but it shouldnt be that for me to get a good deal that they have to try to Berk Over Ms. Jones over there ( Who NEEDS to buy a car today to replace the one that got destroyed for whatever reason), just so the stealership can make ends meet.   Besides, even if I did get a good deal, you are left feeling like they are hiding some way they screwed you over that would make it a bad deal that you are just fooling yourself over. 

I hate it about as much as politics. 

Since I’m sure they will show up soon, remember that for every “my dealer isn’t bad” story there are at least a dozen absolute horror stories. 

Gnash your teeth about the (admittedly bad) state of dealerships, but as long as there are lobbyists and “middle man” protections enshrined in most state law, dealerships won’t be going anywhere anytime soon.

It is possible for a better experience.

About a month and a half ago I had to replace my truck as it was no longer reliable for the long haul towing to tracks and back that it primarily gets used for. At the time of buying that truck I had been circling the dealership for 2 days waiting for them to close so I could look at it by myself but the place was open till 10pm and I gave up and went in. Got the normal aggressive, blood in the water treatment from the sales guy. Told him I was here to look at this truck and ONLY this truck (Ford at a Dodge dealership). After beating that wind out of his sails (sales?) I looked it over and then there was the test drive where he wouldn’t shut up and I was literally running on E (I believe it went down to 3 miles to E on the test drive). I had some problems that gave me negotiating room and when he was too eager to get my trade in I leveraged for another grand over what they offered. Had to turn down/say no to a lot of valueless add on BS. Overall I got my money’s worth but it wasn’t really a pleasant experience.

Now by contrast just a over a month ago my buying experience when about as ideal as I could have hoped for. I arrived and nobody rushed me in the parking lot. I went and literally crawled under the truck to inspect it/verify condition (no rust) and that nothing was leaky or possibly failing. Then I went inside. I had to get the sales guy’s attention, told him what truck I wanted to look at, he gave me the keys, photo copied my license. We went out to the truck, opened it up, told me what information he had/knew about it while giving the interior, box and under the hood a look over. Then he says it has plenty of fuel in it, just take it for a drive and come back when you’re satisfied…and he went back inside. I had the truck all to myself for the better part of an hour to inspect and test drive to my satisfaction. The only thing I could find wrong with it was out of balance wheels. Deciding to buy it there was no negotiation on price. IMO it was a fair price that I was willing to pay. For my trade in I was honest about it’s problems and realistic in my expectation of value which was no nonsense agreed to. Had my own financing so filled out some papers, signed a check and went to lunch in my old truck while they balanced the wheels and once done was on my way home.

So, if dealerships “go away” (they won’t), how do you test drive?

I’d never buy a car without a test drive.

In reply to Duke :

The theoretical “build to order” future has the dealership with a very small allocation of demo vehicles. Think one high-option and one low-option trim level of every model. You come in, test drive those, then put your order in at the kiosk or online. Obviously the dealership will try and upsell you on accessories, warranty, etc

In reply to Duke :

The Carvana model maybe? They bring the vehicle to you. I think many of the newer model dealerships have a pretty healthy return policy if you are unsatisfied.

I agree – Tesla has made the process easy and ‘how it should be.’   
 

I paid my way through college by selling cars at dealerships.  Last few years, I’ve had two ‘what are you guys thinking’ experiences.  
 

1.  Took my mom to an Acura dealer.  In the rain.  Told the salesman we didn’t want to drive today but we just wanted to sit in a car to get a feel for the size.   He said he would bring one up since there wasn’t any in the showroom but he needed my drivers license   I told him we weren’t driving, just wanted to sit   He said that was their policy   To look at a car i asked?  We left   
 

2.  One of my old favorite Mercedes dealerships always had some drool-worthy cars   My wife and i liked to walk that lot after hours to dream a little.  The last two times we went, a voice announced loud on the speakers that we were trespassing, they were closed and authorities would be called.   I called the next day and the manager said we were welcome after hours – but when I t happened again months later, I scratched that dealership off my ever going back list  

It’s a shame – a business model gone bad and no one will miss it when it’s gone  

I for one hope they don’t go away.  I never go to the dealership for new cars or service so I don’t have to deal with them.  I don’t want them to go away so that the sleezy salesmen stay there and don’t leave to get sales jobs at stores and businesses I do go shop at. 

Duke said:

So, if dealerships “go away” (they won’t), how do you test drive?

I’d never buy a car without a test drive.

 

Pave The Planet – One World, One People, One Slab Of Asphalt

The same way you test drive a Tesla. Go to their showroom and take one of a spin.

Or buy one and return in within 7 days if you do not like it.

We saw a massive variation in dealership experience the last time we purchased a car. Ownership, management, and market dynamics probably all matter, but some of them seemed like reasonable businesses with regular people and others felt like a giant mousetrap staffed by sociopaths. 

One Honda dealership was beyond awful and the other, 30 miles south of us was perfectly normal. 

I have only seen Tesla… boutiques? …galleries? …whatevers? …inside shopping malls.  I guess they have a few demonstrators out in the parking lot?

On the Carvana model, I’m not going through the effort of making them drag a car to my house unless I’m 75% certain I’m willing to buy it, and I’ll never be 75% certain without having already test driven one.

In reply to Duke :

Correct. Here they have a few showrooms, but they also have a few stores at a couple of malls. At the mall you make an appointment and they will have the car you want to test drive out in the parking lot.

When I was shopping for my truck a year ago I had it narrowed down to a Frontier or an Xterra. I had test driven both and decided that I would be happy with either one. When I saw one of the local dealerships had a 2014 Xterra on the lot for what was a little high but reasonable for the times price I went in to look it over. Before we even sat down to negotiate the games started. The whole time I was looking the car over the salesman kept saying “yeah we had a guy in here earlier that was really interested and if you don’t buy it tonight he is coming back first thing in the morning to buy it.” So after I decided it looked up to my standards for a used car we went inside to talk price. As soon as we sat down he had the numbers printed out and the price was inflated over $4K over the list price because of misc b.s. fees. At that point I told him he can call his other customer because that price is $6K over blue book and im not buying. 

When we stood up the “manager” comes over and tries to convince me to take a longer finance term (from 48 months to 84) to get the payments the same as they would be at the lower price because, “That is getting you the payments you wanted at the lower price so why wont you take our deal. Kelly Blue book looks at lots of cars not this one so they don’t know how nice it is.” So I told them good luck and walked out. 

I ended up finding the exact model and color Frontier I wanted at a dealership an hour away, did all the negotiating over email and was extremely happy with that experience.

Two months later that Xterra was still on the local lot. I guess that other guy never showed up.   

I have found that dealerships are very fluid places. For example, I had an old high school friend working as a mechanic at my local Kia dealership and the service manager I dealt with was very nice. I always got great service with no surprises.  When my friend and the manager left, service suddenly went South to the point that I stopped using them altogether. Bought my next Kia from a neighboring state. 

When I bought my Fiesta, the dealer had a long history of poor service and had hired a new GM to turn the place around. Apparently, I was an early customer of the new way of doing things and I received great service during the purchase and initial service visits. Over time however, the GM left and the dealership slipped back into their old ways and lost me as a customer.

Over my ownership of the Fiesta, I visited 8 different Ford dealerships up to an hour away trying to get decent service…and never found it. I think its a directive to provide bad service from Ford corporate! I eventually found one service manager who wasn’t a crook and while not a great experience, it was at least fair.  I used them for recalls and warranty work but let a reputable garage do everything else. 

When I bought my Elantra N, the dealership experience was great, and service has been great so far as well. I hear horror stories about dealer markups on this car and deceptive practices, but I encountered none of it. My assumption is that it will not last, though I hope it does. 
 

Unnecessary PFA:

I have a good relationship with a salesman at a local dealership, we’ve bought many cars from him over an almost 30 year span. We were in there a few weeks ago to place an order, and he was moaning and complaining about how the OEM (Ford) is trying to squeeze them out and put them out of business. He’s a nice enough guy and I didn’t want to be an shiny happy person, but internally I was thinking “Good. You’re a useless middle man who adds no value”.

Duke said:

So, if dealerships “go away” (they won’t), how do you test drive?

I’d never buy a car without a test drive.

 

Pave The Planet – One World, One People, One Slab Of Asphalt

Test drives are already gone, as I detailed in my Maverick thread. Dealers seem to sell everything they get instantly, and don’t keep anything around for demo. 

When I bought my Jetta TDI wagon new in 2003, the dealer told me, “free inspections for as long as you own the car!”  Hmm… while it’s a bit of a PITA to get to the dealer, might be worth the hassle.  So… Spring of 2004 rolls around and I take the car to the dealer for my “free” inspection. The next day after work (and thus during evening hours), I go to pick up the car – and I’m handed a bill.  (background: in PA, cars get two inspection stickers – one for Safety; brakes, lights, etc – and a second for Emissions; except diesels were exempt at the time) “Oh… only the Safety inspection is free. You have to pay for the emissions inspection.”  But it’s a diesel, it doesn’t get an emissions inspection.  “Sorry… I’m just the checkout person; all of the service techs are gone for the day.”  

I begrudgingly paid the bill since I wanted my car back and I vowed to never set foot in that dealer again.  And I haven’t.  Hard to say how much business they might have lost for that $70 bill. 

I generally hate dealers… 

That said… I bought my last minivan from a Dodge dealer in NJ. The catch was the dealership is owned by a coworker I’m friendly with.  So I basically got the “friends and family” treatment.  I paid a price for the van I was happy with and I’m sure gave them a bit of profit. But most important, there was no B.S. during the entire interaction.  

In 2011 I was buying a Honda Accord LX 5-speed stripper model – not one option.  One Saturday I’m inside talking to the dealer that had 75 automatic Accords and 2 manual tranny Accords.  

They pull it up, drop the keys on the desk and ask if I want to test drive it – nope, already drove one, just give me a good price. 

Ten minutes later another sales guy shows up and says another customer is interested in the car.  Am I buying it?   So I decide the other customer should have it as it all felt preplanned.  

Four days later I bought it.  

I see a lot of this stuff on car forums – people griping about the dealers and how hard it is to get a good deal……so the alternative is you buy it from the mfr for whatever price they want to charge and THAT’S a good deal? Ford makes $15K on Exploders and big trucks, dealers are lucky if they can make a thousand – most people are convinced they should be able to buy the car for less than the dealer pays for it because the dealer gets all sorts of secret money from the mfr……this attitude is why you’re paying $200/hr for service and all the add-ons in finance – they have to make it somewhere, to keep the doors open.

How would your dealership experience go if you just walked in, picked one out and paid sticker for it? Cause that’s what you’re talking about doing once the dealership model goes away….

I used to hear guys all the time talk about how they’ll NEVER pay sticker for a car, to do so is just stupid etc, but that seems to be what you guys are advocating?

I worked in high line car dealerships most of my adult life, did everything from service thru sales and upper management – Porsche+Audi, Jaguar Range Rover, and finally Lexus. There were a few times where a customer came in and said this is what I’ll pay for that car, take it or leave it, and if we took their deal they were extremely disappointed – like somehow they’d left money on the table. They would beat us down to the last penny, then go across the street and pay huge money for rims or stereos or phones.

And when there are no car dealerships, what will you do with your current car? Sell it on Craigslist? FB Marketplace? What’s it worth to you to clean your car, fix all the crap someone will complain about so you can sell it and then finance it for them? 

And you all will be going where for warranty work?

Tesla’s model is OK for their market, but they don’t sell to Joe Sixpack so he can go to work on Monday – and Joe still needs to buy a car and there are WAY more of him than there are Tesla buyers.

I don’t think the dealerships are going away anytime soon, there are millions of people employed by car dealers, where will those people be working if the dealership goes away?

In reply to MiniDave :

It’s not so much the prices paid, it’s the upselling. The general B.S. and sliminess.  

I hated my VW dealership so much that I vowed the car would get traded in for an Acura after the 3rd warranty trip. Fortunately, it never needed any warranty work.  I wouldn’t even take the car to them for recall work.  I managed to find out what the recalls were for and did the work myself if I felt it was needed (one recall I flatly refused to do because I knew what the “fix” was).  For example, buying the brake light switch for $5 and replacing it myself was a lot easier to deal with than taking the car to a dealer. 

I get that a dealership is a business and it needs to turn a profit, but if they want to keep customers, don’t be a dick about it.

MiniDave said:

How would your dealership experience go if you just walked in, picked one out and paid sticker for it? Cause that’s what you’re talking about doing once the dealership model goes away….

Yes that is exactly what I want like 99% of other things I buy. Just have a price and lets pay the price. I don’t want to spend my life haggling.

jimbob_racing said:

I worked at a several dealerships in parts and service. I will never forget the sales people and sales mangers at each one of them laughing and high fiving each other when celebrating them screwing someone who just bought a car. They lived for it.

I think you are confused.  At least the dealerships I’ve worked at the high fives and etc were when someone sold their first car or the oldest lot lizard ( car on the lot the longest with the highest interest cost behind it) had been sold.  It might have been when a salesman who was close to being fired for underperformance finally sold one, got it financed and dodged that bullet for the month. 
   Turn over on sales staff was always about 20% per month. Typically you are required to work four 8 hour shifts  and Saturday which counts as 8 hrs  but usually works out to 10-12  plus typically 2 sales meetings a week.  Where each detail of your monthly progress is laid out for everyone to see. 
   For that you are given minimum wages as a draw against your commission and you have 90 days to get in the black. Failure is termination. 
   They love to hire newbies.  But part of the hiring process is how many friends and family do you have.   None? Lacking prior experience  and a strong reference You won’t be hired.  Each dealership is different. But if you aren’t mentioning 4-6 friends and family typically you won’t make it. 
        
       Salesmen with more than 2 years experience  are rare.  Typically alcoholism,  drug addicted, divorced or in process, or gambling issues.  
      
The problem is most people going into dealerships count on being screwed.  Seldom listen to the salesman no matter how honest he is being with them.  
    The high profits deals are almost always on the used cars.   ( that or rare Uber high performance models).  
     If you come in with a budget to meet the first thing salesmen turn you onto is Demo’s.  Cars used by top salesmen and management.  If they can’t get you on one of those they go straight to used and that’s where second grade math screws the buyers.  
  This is less than that.  Doesn’t have any place to calculate the percentage of used up  except the buyers gut feeling.  Which is why all those parking lot dents are removed, and it’s so shiny and clean.   It even smells clean.  
   But the guy trading it in took a $5000 hit for dents, $1000 hit for worn tires, $2000 hit for dirty, and  a few other losses covered up in the trade in mumbo  jumbo.  
       The trade in guy probably paid a little over $100 over the book cost  so the salesman who sold the new car earned  the minimum spiff  ( cash payout) which is 1099ed 

     When cleaned up and ready that trade in is priced at the market price but that includes $5-7000 in profit for the dealership.  So the salesman who sold the new vehicle got $1-200 while the salesman who sold the used car splits the commission on the used car with the house.  ( typically 30% so he makes $15-2100). 
  Then if he’s clever and semi honest he’ll curb the trade-in ( with the house) on the trade in he just sold and make another $15-2000.   If he’s dishonest he’ll buy it for his “wife, girlfriend, himself”.  And keep all the $5-7,000.    If he’s selling enough cars the dealership will let him do that a few times a year before they fire him.   Marginal guy? He’s out the first time. 

MiniDave said:

How would your dealership experience go if you just walked in, picked one out and paid sticker for it? Cause that’s what you’re talking about doing once the dealership model goes away….

This is exactly how I’ve bought the last two Mazdas, using their S-Plan. 

For the 2021 Rf I just got last year, I was literally in the dealer for <30 minutes.  I had sorted everything out ahead of time with a 5 minute phone call and some text messages.   The worst part of the experience was 15 minutes with the finance guy/sales manager convincing him that I really DIDN’T want their extended warranty crap or any add-ons while my wife sat there amused at his attempts to keep trying.  Yes, I know cars are complicated.  No, I’m not afraid to replace parts. I knew to the penny exactly what price I was going to be paying for the total cost of owning the car before I got down there (tax, title, tags, interest rate on my loan, etc.).  I got a fair price, they got a fair price (I hope, it’s their problem if they didn’t from Mazda Corp).   There was no negotiation further than “my credit union will give me X.XX%, can you beat it with your own financing?”

If I could have done it without the extended warranty fear session BS, I happily would have. 

I’ve bought a frankly disturbing amount of new vehicles from dealers (15ish).  3 times I didn’t feel like I was being agressively lied to or tricked or in some way taken advantage of.  It had 0 to do with the price I paid for a car or got for my trade.  I get it, dealer gotta make money that overhead don’t pay for itself.  I don’t worry about if the price I pay is +/- a few hundred from where I really want to be.  It was just completely due to the way things are misrepresented, upsell at every opportunity, lies from the dealer etc.  It’s just not a pleasant experience. 

I would gladly pay 1-2% more to come in, test drive a car, look at options, choose a car, figure out how it’s going to be paid for, sign my name and get my car.  I don’t care if they get the same $1000 net off me, just make it less painful and annoying. 

I don’t know, I’ve never had a bad buying experience at a dealership, because if they start with any bullE36 M3 during the initial ‘just looking’ visit, I immediately walk out and never go back.

Admittedly I’ve never been in a position where I had to buy a car today so I could get to work tomorrow.  Maybe that is more of a luxury than I think.  I also live in an area with 3-4 dealers of any given brand within an hour’s drive, so there’s no need to tolerate that kind of crap, sir.

frenchyd said

I think you are confused.  

Nope. They were celebrating absolutely berkeleying people. I saw the net profit listed on the Reynolds and Reynolds screen in some cases. These people were evil mother berkeleyers.

In reply to nocones :

You are dealing with a fear based system.    Salesmen are fired if they don’t pressure you etc. 

        I do all my shopping on line.  And issues like extended  warranty, etc etc  I deal with them on line where you have all the power. All you have to do is hang up.   

  If I want to drive something first I go in ask for the test drive with the upfront stipulation I’m not ready to buy.   I’m trying to decide between this and a couple of different brand competitors.  I’m not  giving them my keys  for security or a trade in appraisal. I’m not trading this one in ( even if I am ). On the test drive    A red one will be the same as a white or green one. So you don’t have to test drive every dealers car.  

  If I’m going to trade something in don’t try to save time.    It just won’t work that way.  Go back and deal on line where you can just hang up. Tell them you are buying it outright.  Yep lie!    Once you have all the numbers finalized including sales tax and documentation fees license cost etc. 

 Tell whoever you’re working with to print out the numbers and send them to you.   
  Do that with every dealer of that brand of car you can find.  4-5 final numbers.  
   
Start with the best deal first and you’ve changed your mind.  What’s your trade in worth. ( again on line,  take photos, be honest and don’t oversell it, dents take picture,  rips in upholstery  carpet stain,  open the hood with the engine running.  So they can see and hear it.  
 

  Now you’re  ready to buy. Any changes ? Get up and walk away.  

In reply to jimbob_racing :

Ive heard plenty of gloating over absolutely screwing people over. Including the sales manager himself verifying what the salesman told me on this one berked up deal. 
dummy walks in and wants an explorer sporttrac. They work him up the first deal which is of course completely bloated for negotiating room. Its monthly payment was like 650$, probably close to twice a good deal. Dummy says “ok”. Sales manager then has to try to make that number work. He proudly told how he had to add in everything he could, protection package, gap, everything he could do that wasnt super obvious. When done he got close but still could not fluff enough to get to their offer, so they made the guy “happy” by giving him a lower monthly payment while absolutely berkin the life out of him.  He was quite proud of himself. 

these people would work over their own close family members to make profit. 
 

then there is the stuff they would all say about attractive women customers.  Not going into that.

jimbob_racing said:

These people were evil mother berkeleyers.

I’m in industrial sales and I get paid on commission. My last job was a $30,000 base salary and the rest is commission – sell at the highest profit margin the customer will pay and don’t lose the business, also go find new business.  

The pricing is subject to market pricing (what the market will bear) but if you call me Saturday morning I’m juicing the price to cover my services of delivering on Saturday morning.  

So some of this is business in general.

In reply to TJL (Forum Supporter) :

Stupid should hurt. Sometimes that’s physically, sometimes that’s financially.

TJL (Forum Supporter) said:

In reply to jimbob_racing :

Ive heard plenty of gloating over absolutely screwing people over. Including the sales manager himself verifying what the salesman told me on this one berked up deal. 
dummy walks in and wants an explorer sporttrac. They work him up the first deal which is of course completely bloated for negotiating room. Its monthly payment was like 650$, probably close to twice a good deal. Dummy says “ok”. Sales manager then has to try to make that number work. He proudly told how he had to add in everything he could, protection package, gap, everything he could do that wasnt super obvious. When done he got close but still could not fluff enough to get to their offer, so they made the guy “happy” by giving him a lower monthly payment while absolutely berkin the life out of him.  He was quite proud of himself. 

these people would work over their own close family members to make profit. 
 

then there is the stuff they would all say about attractive women customers.  Not going into that.

Yes there are dealerships where that is the norm.  Those are the dealerships where the ink is barely dry on who owns it. Because when the market is down you survive on loyal customers who are treated respectfully.  
       It doesn’t take much to figure out which are which.    No brand is immune from the shake down artists even a good dealership will  occasionally get them.  
   So you can’t be stupid and expect people not to take advantage of you.  Walk in not knowing anything except how to sign your name?   Yes you’ll pay list price and get unneeded extra’s.  But that’s life.  
 Stupid ignorant people pay too much for cars,  houses,  computers, furniture,  and a whole bunch of stuff. 
      I believe I’m an honest person.   But if you come in and want a good used truck.  I’ll tell you you can have a new one cheaper than a 2 year old used one.   If you give me the time required I’ll lay it out for you.   Yep!   The new one is $500 a month the used one is $525 a month. 
   Yes,  the used one will be paid off in 4 years. The new one is paid off in 5 years.  Same equipment I can even get you the same color.  
 OK,  yes let’s drive the used one and I’ll get the paperwork started on it.   
  I want to dope slap them.  Hey! it’s 2 years newer and has a full warranty.  You said you keep your  vehicles 5 years typically.     New vs Used?    Cheaper!!! ?????? 

In my experience, The more “upmarket” a dealer is,  the less they judge the book by the cover, or try to play games.  At the Aston dealer, I’ve shown up in dirty cargo shorts and a t shirt.  They practically begged me to take the new model out for a drive, no questions asked.  At the Chevy dealer, dressed better, they wanted to pull a credit report before even considering it.   Same feeling when “going home to think it over” and when pushing add ons.

Extreme examples, and YMMV, but thats been my experience as a general rule. 

I’ve worked in sales and as a general rule I think that sales professionals get too little respect.  But I think the reason for it has a lot to do with the way that car salesmen and dealerships handle customers.  There are some lines that get crossed all the time by car dealerships that  should never be crossed by truly professional sales people.

OK:

– portraying your product in the best possible light

– negotiating price vs. utility to optimize the value equation for the customer

– creating urgency to get a transaction done

– upselling features that may create extra value for the customer

NOT OK:

– arbitrarily manipulating price then obfuscating your work behind an impenetrable wall of documents

– bait and switch

– fear tactics; selling solutions to false/imaginary problems

– predatory lending tactics

– misrepresenting features or deficiencies

– etc.

At the end of the day, sales ethics is a thing.  In more professional business settings it’s a hard requirement.  It’s a shame that most people’s view of salesmen is based on car salesmen.  There are some good ones out there but IMO they are few and far between.

I’ve said it before but:

Teslas are specialty products, they are *different* than most cars in the market and people are willing to jump through hoops to purchase them.

Most cars in the market are not specialty products, they are commodities.  This means that people don’t really care which one they get, as long as the price is reasonable and it meets their needs.  Manufacturers have much less leverage when selling these products than when selling specialty ones;  the more headaches they put in the way of a potential customer buying one, the more likely that customer is to go to their competition.  Why would Joe Consumer wait a few weeks to get a Camry when Honda is willing to sell him an Accord today?  You’ve been able to order cars for decades and basically nobody does it, despite the ability to get exactly what you want and usually at a discount.  The convenience of NOW is important.

So no, dealers aren’t going away for the new car market in general.

codrus (Forum Supporter) said:

You’ve been able to order cars for decades and basically nobody does it, despite the ability to get exactly what you want and usually at a discount.  The convenience of NOW is important.

In my experience, special ordering meant paying sticker price.  Negotiating on something the dealership had already invested in and was paying interest on is how you got discounts, because they had capital tied up in that inventory and their ROI was dropping every week it sat on the lot.

Nowadays, it seems you pay sticker or higher for everything and you hope you like what you can get.

In reply to cbaclawski :

I bought my Nissan Frontier used from a Porsche dealership and it was the best car buying experience I have ever had. No games just right to the price and after we got everything figured out over email I was in and out of the dealership in 30 minutes after the test drive and looking it over. 

My experiences with car dealers at the sales level and at the service level here in central va has been abysmal. Both areas of several dealers i have had association with have been openly dishonest and combative to deal with whether it was during the purchase process or during warranty claims. I’ll never buy another new subaru from the local dealer because both sales and service make no effort to truly serve the customer. Their attitude about handling a warranty issue on the BRZ i owned was so negative and combative that I will never darken their door again for service or ever buy another vehicle from them. The local Toyota and Honda dealers also get similar negative marks for bad behavior. If every one of them went out of business here it would be of little consequence other than giving me cause to smile and raise a toast to justice done.

Duke said:

codrus (Forum Supporter) said:

You’ve been able to order cars for decades and basically nobody does it, despite the ability to get exactly what you want and usually at a discount.  The convenience of NOW is important.

In my experience, special ordering meant paying sticker price.  Negotiating on something the dealership had already invested in and was paying interest on is how you got discounts, because they had capital tied up in that inventory and their ROI was dropping every week it sat on the lot.

Nowadays, it seems you pay sticker or higher for everything and you hope you like what you can get.

 

I’ve always special ordered everything I bought.  I’ve always got the dealership down to to a few hundred dollars of profit.    Oops!  In 1967 I tried to buy a COPO  Corvette for $100 over invoice.   And wasn’t able to complete the deal back then because I hadn’t figured out how it works between the dealership and the factory.  
  I later did just that, ( figure out the process).   
  Yeh,  I worked for dealerships and know how dealerships work.  So ask if you want to know how it all works.  

codrus (Forum Supporter) said:

I’ve said it before but:

Teslas are specialty products, they are *different* than most cars in the market and people are willing to jump through hoops to purchase them.

Most cars in the market are not specialty products, they are commodities.  This means that people don’t really care which one they get, as long as the price is reasonable and it meets their needs.  Manufacturers have much less leverage when selling these products than when selling specialty ones;  the more headaches they put in the way of a potential customer buying one, the more likely that customer is to go to their competition.  Why would Joe Consumer wait a few weeks to get a Camry when Honda is willing to sell him an Accord today?  You’ve been able to order cars for decades and basically nobody does it, despite the ability to get exactly what you want and usually at a discount.  The convenience of NOW is important.

So no, dealers aren’t going away for the new car market in general.

 

Well put.   
 One further point.  Dealerships are a cushion.   Factories need to keep producing to be efficient and excess inventories need to go someplace and dealer lots are the answers.  
      If we all place our orders directly with the factory.  The factories will need to start and stop based on popularity of the vehicle and the economy.    Economically that won’t work.  

ShinnyGroove (Forum Supporter) said:

I’ve worked in sales and as a general rule I think that sales professionals get too little respect.  But I think the reason for it has a lot to do with the way that car salesmen and dealerships handle customers.  There are some lines that get crossed all the time by car dealerships that  should never be crossed by truly professional sales people.

OK:

– portraying your product in the best possible light

– negotiating price vs. utility to optimize the value equation for the customer

– creating urgency to get a transaction done

– upselling features that may create extra value for the customer

NOT OK:

– arbitrarily manipulating price then obfuscating your work behind an impenetrable wall of documents

– bait and switch

– fear tactics; selling solutions to false/imaginary problems

– predatory lending tactics

– misrepresenting features or deficiencies

– etc.

At the end of the day, sales ethics is a thing.  In more professional business settings it’s a hard requirement.  It’s a shame that most people’s view of salesmen is based on car salesmen.  There are some good ones out there but IMO they are few and far between.

Well put.   I went into car sales because I was a car guy.  I wanted to help people make smart decisions.  But most people didn’t want that.  They wanted the Blue one with the payments of $XXX PER MONTH. 

    I quickly learned that 2 years was the absolute outside limit if you wanted  to preserve who you were and not give in to the more baser urges and pressures in the business 

I was lucky in that someone I sold a car to ( actually a fleet of cars)  hired me because of my skills and ethics.  That moved me up the ladder.  
  

Duke said:

codrus (Forum Supporter) said:

You’ve been able to order cars for decades and basically nobody does it, despite the ability to get exactly what you want and usually at a discount.  The convenience of NOW is important.

In my experience, special ordering meant paying sticker price.  Negotiating on something the dealership had already invested in and was paying interest on is how you got discounts, because they had capital tied up in that inventory and their ROI was dropping every week it sat on the lot.

Nowadays, it seems you pay sticker or higher for everything and you hope you like what you can get.

My experiences with ordering something that was in general availability have been that the dealer was very willing to deal on it.  They know that price is pretty much the only thing they have to work with, because someone who’s willing to wait for a special order isn’t likely to be fazed by the idea of driving to the next-closest dealer to get a better one.  They take a deposit and it’s an easy, no-work, guaranteed sale.

Duke said:

I have only seen Tesla… boutiques? …galleries? …whatevers? …inside shopping malls.  I guess they have a few demonstrators out in the parking lot?

On the Carvana model, I’m not going through the effort of making them drag a car to my house unless I’m 75% certain I’m willing to buy it, and I’ll never be 75% certain without having already test driven one.

 

I guess it depends on the area but in alberta in Edmonton abd Calgary they appear to be similar to a normal dealership atleast in appearance. Dint know how much product they have or if it’s all just demos but they did take over the location of a former infini dealership here in Edmonton.

ChrisTropea said:

In reply to cbaclawski :

I bought my Nissan Frontier used from a Porsche dealership and it was the best car buying experience I have ever had. No games just right to the price and after we got everything figured out over email I was in and out of the dealership in 30 minutes after the test drive and looking it over. 

Chances are you dealt with one of the many decent honest salespeople.  
while others on here have dealt with the other type of salesperson.  
     I’m curious  why would one person always have a bad experiences  while others have good experiences?  
   Is it possible  that the one group  comes forward with an open mind rather than convinced they are going to be screwed, that might have something to do with it?  

frenchyd said:

Chances are you dealt with one of the many decent honest salespeople.  
while others on here have dealt with the other type of salesperson.  
     I’m curious  why would one person always have a bad experiences  while others have good experiences?  
   Is it possible  that the one group  comes forward with an open mind rather than convinced they are going to be screwed, that might have something to do with it?  

IME, “luxury” brand dealerships (like Porsche) tend to be a lot less slimy than less expensive brands.  They’re not going to give you a better deal, but they tend to be more polite and less dishonest about it.

In reply to codrus (Forum Supporter) :

I agree in general but the attitude you approach and the person you interact with are always the determinate factor. 

Frenchy makes a good point, except the same things happen at highline dealerships too. Case in point, I “upped” a fellow at the Porsche+Audi dealership one day, introduced myself and asked how I could help him. First thing he says – not his name or hello or anything – is, “I don’t expect you to tell me the truth, but….” I admit I almost lost my cool, but I stopped him right there and said You don’t even know me and you’re accusing me of lying to you? Let’s start again, my name is……

He backed off immediately and I sold him a new Audi for his wife. Musta worked, cause I later also sold him a new Porsche, and cars for three of his kids over the next couple of years. He also brought me his business partner, several  associates, neighbors and friends.

I worked at that dealership for over 5 years and more than half of my sales were to repeat or referral customers. There were times when I literally had no time to up new customers cause I was so busy with those….

Those guys who just want to beat you up for the “best deal” aren’t really buyers in my book. If they do wind up buying a car they’ll be miserable shiny happy people the whole time they have the car, wanting – no expecting – you to throw them freebies every time they walk in the door…… and they never bring you more business because they’re scared to death that someone will get a better deal than they did. Don’t need ’em, send them over to the Chevy dealership.

I had a well know local attorney come in and offer me half price on a new Porsche Turbo – those cars were extremely limited in those days and we had to make each one of them count. His logic as he explained it to me was that we would easily make plenty more back because all the people who saw what he drove wanted one too. The old “you can make money on the next guy, not me” routine. I told him I wouldn’t do that, but would sell him the car at sticker, and for each one of those people who came in and said they wanted to buy a Porsche Turbo because he had one – and did – I would rebate him $5K.

last I saw him he was still driving his old clapped out Caddy.

In reply to frenchyd :

I go into every car dealership/ attempted purchase from dealership with the same attitude. I assume they are trying to screw me over but I know what I want to buy and I know what I am willing to pay. 
The local dealership was extremely rude and tried to screw me over with slimy sales tactics. 
I went into talking with the Porsche dealership with the same process and was treated with respect. 

My last new car dealership experience:  games, lies, hours of my time wasted. 

My last dealership experience, a local father/son lot with maybe only a dozen cars at a time:  “Test drive it. If you like it, we’ll talk. If not, thanks for considering us.”  Decided to buy it. “Well, it’s been here awhile…I’ll knock another $200 off if you agree to take it today.”

We still have it (2010 Jetta wagon). 185,000 miles on it now.

My wife’s friend from junior high married into a car salesman family.  All the brothers worked at a Dodge dealer and some have moved on to owning dealerships.   The guy we know has easily worked 30+ dealerships the past 40 years; salesperson along with being a manager then demoted back to sales.

It’s a butthead industry that treats the employees like crap too.

We were finally able to buy a new Accord Hybrid this year, after wanting one for a year or so with no new cars available.

We paid MSRP, and got a good number for our trade.

For the first time in my life, I felt like MSRP was a good deal. But if that’s the case, it now seems to negate the benefit of the dealership. Test drives are nice, but if there are no new cars in stock to drive, that falls by the wayside. Other than that, I have found few positive experiences at any dealership over the past 30 years.

I’m ready to buy a new Civic Si, but there are none available. If I can find one at MSRP, I’ll take it, based on what I’ve read about the car here on GRM.

At this point, do I need a dealership? Honda finance might get me half a point better on the rate, although financing deals never seem to align with the specific models that I’m interested in, but the convenience of my Credit Union usually tops that difference anyway.

Bring on the Tesla/ Carvana experience. I’m ready.

I find these threads humorous every time they come up. 
 

We live in a time when we celebrate and demand having options in how we communicate, how we shop, how we make purchases, etc., but we argue for a “one size fits all” approach when it comes to our opinions on the value of dealerships. 
 

Dealerships are not obsolete, and not a thing of the past. They are just a different way to buy, and some people DO prefer them. 

Can anybody offer a review of Hennessey Honda in Woodstock, GA?

In my fantasy world, the Dealership Experience would be replaced with rack of paper brochures and an online parts counter.

Woody (Forum Supportum) said:

In my fantasy world, the Dealership Experience would be replaced with rack of paper brochures and an online parts counter.

That’s a mighty big risk. Call it a $30,000 plus gamble.   The specs might be appealing. The pictures might look good.  One car was once defined as long, low,  and luxurious.   Welcome to the new Edsel. 
      It really depends on who is doing the testing for everyone.   Do you have farmer Brown who thinks anything more complex than a Ford Model A is too fancy.  Or some bored debutant who is a very angry  the rear view mirror won’t cover her whole face so she needs to tilt her head up and down to check her makeup?  
  Maybe it’s an academic engineer who is thrilled the crankshaft pin diameter is exactly the square root of Pi ? 
  But none of them have your shape and won’t realize your knees hit the dashboard  or the steering wheel blocks your view of the speedometer. 
  Maybe your wife might not like how to adjust the seat or kids have trouble getting the seatbelts fastened?   
     Now you can try to sell it, take the depreciation hit, and gamble again on another car?    
 

Datsun310Guy said:

My wife’s friend from junior high married into a car salesman family.  All the brothers worked at a Dodge dealer and some have moved on to owning dealerships.   The guy we know has easily worked 30+ dealerships the past 40 years; salesperson along with being a manager then demoted back to sales.

It’s a butthead industry that treats the employees like crap too.

My local Chevy dealership hired me as a salesman straight out of the Navy.   By the second month I was top salesman. In the third month President Ford visited his brother and a few days later 19 of the sales staff were laid off including me.  And then the recession  hit.    I wound up running a gas station. 

Woody (Forum Supportum) said:

We were finally able to buy a new Accord Hybrid this year, after wanting one for a year or so with no new cars available.

We paid MSRP, and got a good number for our trade.

For the first time in my life, I felt like MSRP was a good deal. But if that’s the case, it now seems to negate the benefit of the dealership. Test drives are nice, but if there are no new cars in stock to drive, that falls by the wayside. Other than that, I have found few positive experiences at any dealership over the past 30 years.

I’m ready to buy a new Civic Si, but there are none available. If I can find one at MSRP, I’ll take it, based on what I’ve read about the car here on GRM.

At this point, do I need a dealership? Honda finance might get me half a point better on the rate, although financing deals never seem to align with the specific models that I’m interested in, but the convenience of my Credit Union usually tops that difference anyway.

Bring on the Tesla/ Carvana experience. I’m ready.

Woody, it sounds like you are.  Why not try a Tesla?  
       I hear it’s a good car, the price is in line with its value.  And you can buy it the way you want to?  
    Why be loyal to Honda?   Back in the day Chevy was a good car, people bought a lot of cars from Chevy. But then Honda came out and over time they switched  to Honda’s and Toyota’s.  
 Maybe it’s time to move on?  

MiniDave said:

Frenchy makes a good point, except the same things happen at highline dealerships too. Case in point, I “upped” a fellow at the Porsche+Audi dealership one day, introduced myself and asked how I could help him. First thing he says – not his name or hello or anything – is, “I don’t expect you to tell me the truth, but….” I admit I almost lost my cool, but I stopped him right there and said You don’t even know me and you’re accusing me of lying to you? Let’s start again, my name is……

He backed off immediately and I sold him a new Audi for his wife. Musta worked, cause I later also sold him a new Porsche, and cars for three of his kids over the next couple of years. He also brought me his business partner, several  associates, neighbors and friends.

I worked at that dealership for over 5 years and more than half of my sales were to repeat or referral customers. There were times when I literally had no time to up new customers cause I was so busy with those….

Those guys who just want to beat you up for the “best deal” aren’t really buyers in my book. If they do wind up buying a car they’ll be miserable shiny happy people the whole time they have the car, wanting – no expecting – you to throw them freebies every time they walk in the door…… and they never bring you more business because they’re scared to death that someone will get a better deal than they did. Don’t need ’em, send them over to the Chevy dealership.

I had a well know local attorney come in and offer me half price on a new Porsche Turbo – those cars were extremely limited in those days and we had to make each one of them count. His logic as he explained it to me was that we would easily make plenty more back because all the people who saw what he drove wanted one too. The old “you can make money on the next guy, not me” routine. I told him I wouldn’t do that, but would sell him the car at sticker, and for each one of those people who came in and said they wanted to buy a Porsche Turbo because he had one – and did – I would rebate him $5K.

last I saw him he was still driving his old clapped out Caddy.

The Lawyer got a good settlement with about 1/2 of what a Porsche turbo costs. He was just trying to Lawyer the rest of the way there.   He’s a flawed guy. Not all people are like that.   Most people can be decent if properly dealt with.  

The service sales scams are an cousin to odious and predatory new car sales models.  Besides having purchased new cars in the last decade, I formerly worked in new and used cars sales at two different new car stores for nearly two decades.  The people who owned and operated the stores I worked at, were decent folks.  However the basic sales model the large majority of car sellers embrace is to use the car sale as bait to gain the opportunity to capture credit insurance, finance and dealer added accessory business.  Before recent covid markups began, the income from these additional sales was nearly always greater than the profit from the car sale alone.  It’s a bad, yet incredibly persistent sales model.  Today, buying a vehicle and then leaving with your vehicle (or our signed order) is impossible in nearly all car stores – without first being forced to endure a finance, credit insurance and dealer added accessory pitch.  Imagine when buying an appliance or really any other consumer good, having to endure a second, post sale presentation for finance (even after making it clear you have your own), credit accident/health insurance and myriad accessories.  A primary reason these arcane retail practices persist are outdated state franchise laws that prohibit manufacturers from selling cars direct to the public.  These state laws are anti-competitive.  Whatever basis originally justified enacting these laws, the harm to consumers no longer supports them.  But for timid legislators and an incredibly powerful new car dealer lobby, we would at least have the option of buying factory direct.  Unfortunately, the current corporate mantra to not leave a cent on the table permeates new car dealerships and as such, without competition outside the tightly controlled franchise environment, the sales and service gamesmanship auto sales and service consumers get bombarded with will persist.

Woody (Forum Supportum) said:

In my fantasy world, the Dealership Experience would be replaced with rack of paper brochures and an online parts counter.

It pretty much is, if you’re willing to pay MSRP, as you found out. That’s the funny part, Tesla and Saturn charge MSRP and “it’s so transparent” yet any other dealer at MSRP is “screwing you” somehow. 
 

Plenty of people spend a lot of time worrying if the guy down the street got “a better deal” for some reason. His deal has 0 relevance to my life. Maybe he paid less, maybe he didn’t, I don’t care. 

Exactly.

That and the rise of info on the internet is what has changed the landscape of new car sales – everyone is convinced that if they can’t get it for less than the dealer paid then they are getting screwed. So, if the dealer can’t make money on the front end, they have to get it somewhere and that’s finance, insurance, service and parts.

That’s part of why you’re paying $150-200/ for shop labor these days.

And I still say those of you who think you would have a better experience if you could just order a car from the factory are dreaming……because they don’t come out of the factory perfect, someone has to do the finish work, and someone has to service it later, and do warranty repairs. You think a shop can survive on the piddling droppings you care to bestow on them? If there are no dealerships, there is no service……ask some of the folks who have needed work done on their Tesla how that’s gone?

I’ve read stories of folks who have waited weeks because they had a flat, wrecked the wheel and couldn’t get another one and so on.

I’ve never had a bad dealership experience, I go in, buy my car, let the F&I guy know that I don’t need any packages, write a check for the car and leave. Easy peasy. I also let them know if they have a better finance deal than I have already in hand that I’ll go with theirs – that happened once on a used Audi I bought, Audi had a better deal than I could get thru my bank or CU, so I signed up…..still easy peasy since I put about 1/3 down. 

I do know that there are some “bad” dealerships out there, with ruthless shiny happy people who try and beat you down, but an informed shopper still has all the power.

Steve_Jones said:

It pretty much is, if you’re willing to pay MSRP, as you found out. That’s the funny part, Tesla and Saturn charge MSRP and “it’s so transparent” yet any other dealer at MSRP is “screwing you” somehow.

That’s because the normal dealer obfuscates the meaning of MSRP and has spent decades making sure most of us understand that it’s got merely a passing relationship to the actual value of the car, while places that only sell at MSRP only sell at MSRP.

Putting a finer point on it, you are describing two different scenarios: one is a stated price which is what you pay. The other is a stated price and the suggestion that the discount/markup/adjustment/deal is reasonable and that you should trust the dealer about that change, in the face of plenty of evidence that you shouldn’t. These two versions of MSRP are not equivalent.

If you look at two places that sell at MSRP, you can comparison shop.

I don’t care whether I got a better deal than Dwight down the street. I care about the very real possibility that I’m paying a dealership hundreds or thousands of extra dollars for the service of obfuscating the market and being professional negotiators, neither of which are services I care to pay for.

MiniDave said:

And I still say those of you who think you would have a better experience if you could just order a car from the factory are dreaming……because they don’t come out of the factory perfect, someone has to do the finish work, and someone has to service it later, and do warranty repairs. You think a shop can survive on the piddling droppings you care to bestow on them? If there are no dealerships, there is no service……ask some of the folks who have needed work done on their Tesla how that’s gone?

Why can’t a factory store have service, like the Apple Store?

The problem is dealers are another middle man between the customer and the manufacturer. And their lobbying power has prevented OEMs from setting up their own shops.

Like how movie theaters don’t make much money on ticket sales, so they charge $40 for popcorn.

MiniDave said:

And I still say those of you who think you would have a better experience if you could just order a car from the factory are dreaming……because they don’t come out of the factory perfect, someone has to do the finish work, and someone has to service it later, and do warranty repairs. You think a shop can survive on the piddling droppings you care to bestow on them? If there are no dealerships, there is no service……ask some of the folks who have needed work done on their Tesla how that’s gone?

You don’t think there’s any other possibility for a service tier other than “dealership?”

Using Tesla as evidence that factory direct service is impossible is unconvincing to me. There’s a lot about Tesla that’s problematic.

As an aside, I also cringed at the suggestion of Apple as an example of store with service facility. I’m sure we can do better than the “genius bar.”

You can’t convince me that there isn’t enough savings in removing the dealer layer in favor of a small retail space and a few demo parking spots to allow manufacturers to either roll out proper repair facilities (which don’t need to pay retail-district rent), or to allow for independent business to contract that niche of delivery prep, warranty, recall, and authorized repair.

I feel like we’re hearing contradicting arguments that no part of a dealership really makes money, and each of them is subsidized by the others. I love sleight of hand, but I do not bet on three card Monty.

Not what I’m saying at all…..what I did say is that since dealerships have a difficult time making money on the actual sale of the car, they have to get it from other sources – like finance, insurance, parts and labor. and I didn’t say Tesla’s service was impossible – difficult and not a good experience either – tho they’re trying. But imagine how it might change if they start selling Ford or Chevy volume of cars?

As to a small lot with a few cars and a service center – no – even if the factory owns it. And in the volume of cars sold that Ford or GM do, it would have to be huge if you’re going to eliminate all the dealerships. 17 million new cars a year sold in the US……that is a HUGE number…..

I see it as a dream of those who just can’t deal with modern dealerships. I understand the frustration, it isn’t pleasant if you let them dick you around, and my hope is that the dealerships who practice that kind of hardball selling just finally collapse. But I think the idea will turn out to be worse than the way it’s done now.

And what will you all do with your trade ins? CL? FB Marketplace? You can do that now if you want, but most don’t – and for a reason – they’ll be doing all the  hard work the dealerships do by themselves, and then dealing with the shiny happy people who want to offer them half, want to make payments and so on. It’s not pleasant either……

I’ve pointed out before, the manufacturer has no interest in direct to consumer, as the dealership is their customer, not the end buyer. Ford has 3000 customers that each buy an average of 550 vehicles per year. They have no interest in 1.7M customers that each buy 1. 
 

It’s much more efficient to sell 1 guy 500, than 500 people 1 widget no matter what business you’re in. 

MiniDave said:

…

Those guys who just want to beat you up for the “best deal” aren’t really buyers in my book. If they do wind up buying a car they’ll be miserable shiny happy people the whole time they have the car, wanting – no expecting – you to throw them freebies every time they walk in the door…… and they never bring you more business because they’re scared to death that someone will get a better deal than they did. Don’t need ’em, send them over to the Chevy dealership.

I’m one of those guys that just wants the best deal.  I don’t want to hassle with negotiating prices with the sales guy, who defers to the sales manager to jack up my offer and waste as much of my time as he can so I’m “invested” in the deal, or the finance department who wants to sell me a bunch of stuff I don’t want and to tack on dubious “fees”.

My last few cars have been Mazda S plan with various rebates and that simplifies things.  No negotiating, and there’s a local dealer nearby with a sales guy that minimizes the hassle.  But before that I bought about ten cars online, almost all for invoice or below, and all negotiated over a wire.  I absolutely do not want to deal with commissioned sales people and their managers and the finance guy.  I’m not naive about how things work.  A close family member was a sales guy, then service manager that rose to be GM of the biggest dealer in the state and I heard lots of dealer/sales stories, starting when I was a kid back in the sixties.  Things haven’t changed.

Steve_Jones said:

I’ve pointed out before, the manufacturer has no interest in direct to consumer, as the dealership is their customer, not the end buyer.

Ford would seem to differ on that point.

https://arstechnica.com/cars/2022/06/ford-wants-to-sell-evs-online-only-with-no-dealer-markups-says-ceo-farley/

I’ve lived in and around the IT sales world for a couple decades and I don’t really think the new car dealers are anything special in terms of the sales process if you take a bit of a macro view of it.  Like in anything, some folks are going to try to take advantage as much as they can while others are going to work a little harder to make their profits by providing good service.

Think about this, though: how many things do you buy that cost more than a single paycheck and that the expectation is you’re supposed to haggle?  For most folks, it’s your car and your house and my guess is that people generally buy cars more often than they buy houses in their lives.  So really the car-buying experience is the one opportunity to really deal with a sales process and it’s typically a large percentage of your income that you’re dealing with. 

A commissioned salesman at Best Buy might talk you up or down the model line, but the price is the price and in the end you’re out, what, a few thou for a TV or fridge?  But at the car dealer folks go in with the expectation that if they don’t do some good negotiating, the dealer will, in their mind, “take advantage of them”. 

In my B2B sales experience from both sides of the table, there are an equal number of horror stories of sales reps gouging customers, selling things that customers don’t really need or want, and playing all sorts of dirty tricks to get the deal closed as I think you’d find with car salesmen.  But on the flip side, I’ve dealt with a majority of reps who want to get the deal done by making sure that the customer is getting good value for their money and is treated right so that they don’t have to coerce them to come back.  And my guess is that those stories would also appear in equal percentages among car sales interactions but they make really boring tales to tell at parties.

I’ve only had the dealership experience 5 or 6 times and only one of those crossed a line that I thought was distasteful: I was cross shopping a Subaru Legacy Brighton wagon with a Saturn SL2.  On my way to sign the paper on the Saturn, I stopped at the Subieship and told them that if they could hit a certain dollar amount I’d buy today, otherwise I was on my way to buy the SL2.  They said they couldn’t do it, so I thanked them and left and bought my car.  The next day the salesman called me and told me that they’d be willing to hit my number.  When I told him that I had already bought he told me that Saturn had a 3 or 7 day return policy (which was absolutely true) and that I could just take the car back to them and then come and buy the Legacy.  Certainly not an egregious affront to morality or anything, but I certainly wasn’t going to do that!

I bet you don’t want to hear about the other 4 or 5 times that I bought cars from dealers and nothing exceptional happened other than I arrived home in a car different from the one I left in.

Yeah, some of the folks in there are absolutely predators and willing to try any trick to get as much out of your wallet as they can.  But there are some decent folks in there as well.

I don’t know that a company-owned store would be all that much better or worse than a franchise dealership.  People that I know who have bought Teslas have been happy with the experience.  And the Carvana model seems to work okay for a lot of folks.

In reply to wae :

So the Subaru dealer needed to hit a number to get your business, but you walked into Saturn and paid sticker price. Saturn had a bigger markup than Subaru ever did, but convinced the public they were “different”. 

wae said:

I’ve lived in and around the IT sales world for a couple decades and I don’t really think the new car dealers are anything special in terms of the sales process if you take a bit of a macro view of it. 

In my B2B sales experience from both sides of the table, there are an equal number of horror stories of sales reps gouging customers, selling things that customers don’t really need or want, and playing all sorts of dirty tricks to get the deal closed as I think you’d find with car salesmen.  But on the flip side, I’ve dealt with a majority of reps who want to get the deal done by making sure that the customer is getting good value for their money and is treated right so that they don’t have to coerce them to come back.  And my guess is that those stories would also appear in equal percentages among car sales interactions but they make really boring tales to tell at parties.

Here’s a primary difference:  In the B2B sale there’s usually a professional purchasing department looking out for the interests of the buyer and the organization should be setting the rules of engagement.  There’s still a lot of shenanigans that go on, but it’s on a different level.  (Like sending the the VP of IT to the superbowl ahead of the acquisition cycle).

This is different than an average car buyer that is pretty clueless about how the whole process works and just want new wheels they can afford vs. slimy sales professionals (not suggesting all car sales people are slimy, but far too many are…)

In reply to Steve_Jones :

Yeah, it wasn’t really an even comparison.  AWD v/s FWD, wagon v/s sedan.  My number I was willing to pay on the Sube was more than the nut for the SL2 so I was stretching my budget a little to go up to that and didn’t really think they’d be able to go that low.

But, you’re spot-on about how Saturn worked.  Everything sold at MSRP, but the car was priced okay.  It’s been a minute, but I think it was lower than what you’d be able to negotiate a Corolla or Civic down to but more than a Neon or a Cavalier.  Personally, if the price is fair, I’m okay with not having to negotiate it down.  To me it’s not about how much money the other guy makes as long as it’s a fair price.  Right now, it sounds like a fair price for a car is MSRP if you’re lucky and usually MSRP+. 

But like you said, when you go in primed for a fight, it’s got a higher percentage of being an unpleasant experience.  At least with Saturn you knew that the sales process was going to be more about add ons, financing, and adding option packages and stuff more than a game of trying to figure out how low they’ll go while they try to guess how high you’ll go.

Jesse Ransom said:

Steve_Jones said:

I’ve pointed out before, the manufacturer has no interest in direct to consumer, as the dealership is their customer, not the end buyer.

Ford would seem to differ on that point.

https://arstechnica.com/cars/2022/06/ford-wants-to-sell-evs-online-only-with-no-dealer-markups-says-ceo-farley/

A previous Ford CEO said the same stuff, and put a lot of things in place to do so. Every dealer was required to have certain website, and process, because Ford would be 100% direct to the consumer within 2 years. 
 

That was in 2002…..

In reply to Steve_Jones :

A fair point, though I think you’d agree that doesn’t sound like “no interest.”

In reply to Jesse Ransom :

I agree, but I see it more as they’re telling the public what they want to hear, for the benefit of the shareholders…

As long as there’s “a plan in the works” people move along to the next thing

wae said:

In reply to Steve_Jones :

Yeah, it wasn’t really an even comparison.  AWD v/s FWD, wagon v/s sedan.  My number I was willing to pay on the Sube was more than the nut for the SL2 so I was stretching my budget a little to go up to that and didn’t really think they’d be able to go that low.

But, you’re spot-on about how Saturn worked.  Everything sold at MSRP, but the car was priced okay.  It’s been a minute, but I think it was lower than what you’d be able to negotiate a Corolla or Civic down to but more than a Neon or a Cavalier.  Personally, if the price is fair, I’m okay with not having to negotiate it down.  To me it’s not about how much money the other guy makes as long as it’s a fair price.  Right now, it sounds like a fair price for a car is MSRP if you’re lucky and usually MSRP+. 

But like you said, when you go in primed for a fight, it’s got a higher percentage of being an unpleasant experience.  At least with Saturn you knew that the sales process was going to be more about add ons, financing, and adding option packages and stuff more than a game of trying to figure out how low they’ll go while they try to guess how high you’ll go.

I went into the Saturn Dealer who didn’t have what I wanted but jumped right on getting it from another dealer who did have it.  And they delivered it to my dealer while I was doing the paperwork.  Because of the miles added in delivery they gave me a $300 discount which saved me a little more in sales tax.  
I received was nothing but respect and helpful.     

Jesse Ransom said:

In reply to Steve_Jones :

A fair point, though I think you’d agree that doesn’t sound like “no interest.”

Also, a number of states have laws making that essentially impossible for internal combustion vehicles.  AIUI, those laws are (at least in many cases) written such that either EVs don’t count, or they don’t count if put them in a new “brand” rather than putting “Ford” on the outside.

As I said earlier, I don’t see how the Tesla model of multi-week waits between purchase and delivery is going to work to sell commodity vehicles.  That doesn’t really say anything about the ownership of the “car lot” though — you could replace franchised dealerships with Ford-owned “car lots” with test-drive-and-buy-same-day in the style of the Apple store and it would work fine.

One guy just wants “the best deal”, another just wants a “fair price”, but no one knows exactly what those are, do they?

In one case a guy can get in on a special mfr’s plan, what would he consider the best deal if he couldn’t?

Another says a fair price currently is MSRP, but what will it be in 2 months, and how is that determined?

This is my point, every one wants a “deal”, but when everyone starts buying at MSRP from the mfr, will you all be getting “a deal”, the “best” deal, or a “fair price” by your own definitions? At that point will you still be able to negotiate? anything? or will you be getting “screwed over” just like you feel you are now?

And still no one has addressed the elephant in the room, what do you do with your trade in?

Someone pointed out that Ford (or any MFR) would rather sell 500 cars a year to 3000 dealerships than 1 car to 1,500,00 people……and you’re right. Same goes for trades, no mfr is going to deal with your trade in.

I bought my first new car from a dealer in 1976 and had no idea what I was doing, but I sold it back to them a year and two trips to the body shop later…,

2001 I bought a Ford Focus from a dealership with 5-year, zero interest. I never took it back to the dealer after I bought it. 
 

I took my wife’s E46  convertible to a dealer with a top issue and they quoted a $3,000 repair that wouldn’t have fixed it. I ended up fixing it with a $3 roll of wire from Autozone.

I’m currently talking with a dealer on a new Ford Ranger. The owner is an SCCA member and racer, and came with many recommendations, so I’m optimistic.  

I don’t want a “deal”, I want a vehicle. I don’t know why this is so hard for some people to understand.

There is a portion of society that likes doing the dance of negotiation, but I truly believe they are the minority. Most of us would rather just show up, see the price, and decide if it’s worth paying or not.  If the dealer model goes away, then MSRP is no longer ‘suggested’,  it becomes the default price.

Have you ever shopped racing equipment? Ever notice how every place sells the same harness or whatever for the same price unless it’s an old item on closeout? You either pay the price, or you buy a different brand. Doesn’t matter who you buy it from, so the service you get will matter more than the price. 

In reply to ddavidv :

Every vehicle has a price posted. You can decide if it’s worth paying, or try to negotiate, but it’s right there. Dealers need to post competitive prices online because the competition is on the same web page, yet the first thing 99% of people say walking in is “I know you can do better”. At that point the dealer is not playing games, the customer is. People here accept the price Carmax puts online, but not the one the local Ford dealer puts online, why?

I generally don’t buy from dealers, either new or used.  I bought our Cayenne diesel from the dealer, it was slightly used.  I think I could’ve done a bit better on it price wise but at the same time I wasn’t jerked around and it was a clean transaction.  On my R I did buy it brand new and got a slightly better (maybe $300) deal on it than my friend, I used USAA’s pricing tool.   Again, pretty easy transaction.

For the Land Cruiser I found it privately and then used a local car broker to handle the transaction.  Why?  Well, they handled all the paperwork, transporting it from California to Colorado and took in the R on trade, so I got the tax savings.  Well worth their fee, at least to me…

ddavidv said:

I don’t want a “deal”, I want a vehicle. I don’t know why this is so hard for some people to understand.

There is a portion of society that likes doing the dance of negotiation, but I truly believe they are the minority. Most of us would rather just show up, see the price, and decide if it’s worth paying or not.  If the dealer model goes away, then MSRP is no longer ‘suggested’,  it becomes the default price.

Have you ever shopped racing equipment? Ever notice how every place sells the same harness or whatever for the same price unless it’s an old item on closeout? You either pay the price, or you buy a different brand. Doesn’t matter who you buy it from, so the service you get will matter more than the price. 

  A car may be a commodity at one price and a bargain at a lower price.  When I’ve bought in the past I usually found out the price the dealer paid and offered that.  Or ordered one for slightly over invoice.   
    Working for dealerships I understand never to trade in a car.

    I broke that rule once in my life.  I had a basic Nova that cost me $100, dragged it home and fixed it at no cost, just a few hours. 
  Then spent another few hours cleaning it, detailing it.   
 It was my wife’s car for the summer and she loved it.  The right size, an automatic with power steering and brakes.  And a pretty sunshine yellow she loved.   
      In October I bought a few year old Corvette and forced the dealer to give me $600 for it against a price below wholesale on the Corvette.  Reminded him of floor plan costs over winter.   Corvettes are lethal in the winter on snow or ice.   
 

MiniDave said:

One guy just wants “the best deal”, another just wants a “fair price”, but no one knows exactly what those are, do they?

In one case a guy can get in on a special mfr’s plan, what would he consider the best deal if he couldn’t?

Another says a fair price currently is MSRP, but what will it be in 2 months, and how is that determined?

This is my point, every one wants a “deal”, but when everyone starts buying at MSRP from the mfr, will you all be getting “a deal”, the “best” deal, or a “fair price” by your own definitions? At that point will you still be able to negotiate? anything? or will you be getting “screwed over” just like you feel you are now?

And still no one has addressed the elephant in the room, what do you do with your trade in?

Someone pointed out that Ford (or any MFR) would rather sell 500 cars a year to 3000 dealerships than 1 car to 1,500,00 people……and you’re right. Same goes for trades, no mfr is going to deal with your trade in.

Tesla takes trade ins and so does Rivian.  No reason there needs to be an independent dealer to handle the trades. Tesla, it appears, just sends the cars to auction.

As someone who negotiates for living I have a different take on these interactions.

I let them know what I do for a living and ask them where they need to be. If they can’t work with that I thank them for their time.

We haven’t bought a car in 8 years but those interactions were fine. On my wife’s Santa Fe I called out the sales manager on a mark up they added. He hesitated and I asked him if that’s were their margin was. He confirmed it was and we had a nice pleasant conversation after that.

We have impeccable credit which nets better treatment.

A few years back we went to look at a used car for our son and the dealer had a couldn’t be bothered attitude. It was pretty much a den of douche baggery. I also got the impression that this dealer was one of many that grind the sales staff.

If cars weren’t a necessity dealers would have to work a little harder to treat people better. 

With all that said I don’t see dealers going away anytime soon.

ddavidv said:

There is a portion of society that likes doing the dance of negotiation, but I truly believe they are the minority. Most of us would rather just show up, see the price, and decide if it’s worth paying or not. 

While I agree about the minority/majority comment, I worked at the largest nationwide no-haggle used car dealer for a decade. The number of people that came in expecting to haggle, despite a national no-haggle advertising campaign, was mind boggling. Many of them would be absolutely irate when we wouldn’t budge off our price. To some extent, haggling, at least on cars, is baked into American’s DNA 

I like haggling over the price when buying a new vehicle.  All of those people that can’t be bothered to work a little to get a better deal on a huge purchase leave some room for me to get a better deal. If we all paid the same price, I’d be paying more. Thinking through my history, I’ve had the full spectrum of experiences. . The one thing I have never done was reward a bad dealer with a sale. Thinking back though, I don’t know how much the differences in my experiences had to do with the different dealers or my different tactics. 
 

I’ve never bought a vehicle on the first try. I’ve tried to buy at local dealers, both out of convenience and to support the local community, but it has never worked out. My first trips to the dealer are to confirm the make, model, and options that I want. Until that is decided, I don’t want to talk about the sale. Nothing to talk about until I make my decision. Take care of me and respect my wishes, I’ll come back to you. Try to sell me whatever is on your lot despite not being what I’m looking for, and you are just wasting both of our time. Once I know what I want, I research to find out what I want to pay. I am very direct- this is the vehicle I want, this is what I’m willing to pay. I just need a yes or no, and I will purchase or move on. I’ve never had that work locally, but I’ve had a 100% success rate when casting a wider net. I don’t know if my local dealers just suck and I found good ones by searching, or if those other dealers treated me better because they knew I was serious, or if it was a little of both. But I’ve bought all of my cars from dealers 1-2 hours away after I found the specific car I wanted, called them, told them what I wanted to pay, and said I’d drive over and buy. Every time it was an easy buying experience with the car ready and waiting for me with the bare minimum BS. I have often received calls back from my local dealers accepting my price days later- after I’ve already bought elsewhere. 

calteg said:

ddavidv said:

There is a portion of society that likes doing the dance of negotiation, but I truly believe they are the minority. Most of us would rather just show up, see the price, and decide if it’s worth paying or not. 

While I agree about the minority/majority comment, I worked at the largest nationwide no-haggle used car dealer for a decade. The number of people that came in expecting to haggle, despite a national no-haggle advertising campaign, was mind boggling. Many of them would be absolutely irate when we wouldn’t budge off our price. To some extent, haggling, at least on cars, is baked into American’s DNA 

It started with horse trading back in Pre biblical  times. So yes,  it’s engrained in most of our DNA.  
      I’ve noticed a trend in millennials to look for the easy way as if it’s an entitlement.  Go to college on a student loan rather than working and saving for college.   Buying from Amazon, rather shopping locally.  Having food delivered rather than cooking it. Etc. 
   I realize that sounds like Keep off my grass  or I want to limit choices. I think it’s an accept the fact that most of us aren’t entitled and need to scratch out a living and savings  simply give you more options and choices.    

GRM Forum 2022: Dealers and their crooked-ass salesmen are the biggest douchebags in the world and deserve to die.  Here’s all my bad experiences, I can’t wait till  they’re gone. The manufacturer direct model will be so much better.

GRM Forum 2032: Remember the good old days when you could test drive to your heart’s content, drink free coffee while negotiating the price down and walk out with a sweet deal?  Some of those salesmen were great guys who went to bat for us, here’s all my good experiences. These manufacturers are totally screwing us. I sure miss the good old days.

In reply to Peabody :

GRM Forum 2035: isn’t it sweet that we can order our George Jetson Copters from our phone and get it delivered?  Shoot, I’ve been waiting for this since 1970.

You’re both wrong, sorry.

GRM Forum [insert year here]:  Depreciation is for suckers.  Only idiots buy new cars.

Also GRM Forum [insert year here]:  Why U no make cars we want?

Steve_Jones said:

In reply to ddavidv :

Every vehicle has a price posted. You can decide if it’s worth paying, or try to negotiate, but it’s right there. Dealers need to post competitive prices online because the competition is on the same web page, yet the first thing 99% of people say walking in is “I know you can do better”. At that point the dealer is not playing games, the customer is. People here accept the price Carmax puts online, but not the one the local Ford dealer puts online, why?

The last time I tried to buy a car at the price the dealer put online, the fine print was two miles long and nearly impossible to read on their terrible website.  In order to get that price I would have had to have been at least a former military service member that also graduated from college in the last 6 months.  Borderline predatory practices.

While I was there talking to them about that, I test drove another car.  I liked it, but I didn’t pursue it in any way.  They asked me what it would take to get me to leave with that car, and I threw out a number.  They took it.

I didn’t walk in demanding better.  I walked in hoping to get the berkeleying price they posted.  Am I happy I got a “deal” on the car I did buy?  No.  I’d much rather there be a posted take it or leave it price, and zero sales people to deal with.

Name any normal retail purchase where people say “man, I wish this was more like buying a car from a dealership.”

If that were the case for anyone but dedicated hagglers, I’d think there was some possibility that we’d miss dealers when they’re gone. But it’s just not the case. It’s a model that most people hate, and mercifully hasn’t spread to many other things.

I really don’t get all this.

There is a sticker price on every car.  Decide if the vehicle is worth that much to you, including any dealership paperwork fees.  Then pay that amount and don’t ask for a discount if you don’t want to haggle.

If it’s not worth that much to you, don’t buy it.

And like someone (I believe frenchy) said above, don’t reward douchebag dealers with your business.

Jesse Ransom said:

Name any normal retail purchase where people say “man, I wish this was more like buying a car from a dealership.”

If that were the case for anyone but dedicated hagglers, I’d think there was some possibility that we’d miss dealers when they’re gone. But it’s just not the case. It’s a model that most people hate, and mercifully hasn’t spread to many other things.

When you buy a house, the seller has an asking price.  You can agree to that asking price right off the bat, or you can offer less and see if they bite.

We typically buy Apple computers and have since the mid-’80s.  Apple does not allow third-party sellers to discount their products below the Apple MSRP.  So we’d shop the free accessory packages between sellers.  I got a lot of free equipment thrown in just for asking.

There are plenty of bigger-ticket commercial items and services that are subject to price negotiation, if you want to.

But you can always pay full advertised price if you don’t want to negotiate.

ProDarwin said:

Steve_Jones said:

In reply to ddavidv :

Every vehicle has a price posted. You can decide if it’s worth paying, or try to negotiate, but it’s right there. Dealers need to post competitive prices online because the competition is on the same web page, yet the first thing 99% of people say walking in is “I know you can do better”. At that point the dealer is not playing games, the customer is. People here accept the price Carmax puts online, but not the one the local Ford dealer puts online, why?

The last time I tried to buy a car at the price the dealer put online, the fine print was two miles long and nearly impossible to read on their terrible website.  In order to get that price I would have had to have been at least a former military service member that also graduated from college in the last 6 months.  Borderline predatory practices.

While I was there talking to them about that, I test drove another car.  I liked it, but I didn’t pursue it in any way.  They asked me what it would take to get me to leave with that car, and I threw out a number.  They took it.

I didn’t walk in demanding better.  I walked in hoping to get the berkeleying price they posted.  Am I happy I got a “deal” on the car I did buy?  No.  I’d much rather there be a posted take it or leave it price, and zero sales people to deal with.

I agree with all of this, but the rules were spelled out.  It is changing though, a lot of manufacturers are mandating you can only advertise a price with rebates that everyone qualifies for, then list “qualified” rebates (military, college) below.  The main issue is if a dealer advertises price X without every rebate and dealer Y has it online with every rebate people get mad at X saying they’re a rip off.

mattm said:

MiniDave said:

One guy just wants “the best deal”, another just wants a “fair price”, but no one knows exactly what those are, do they?

In one case a guy can get in on a special mfr’s plan, what would he consider the best deal if he couldn’t?

Another says a fair price currently is MSRP, but what will it be in 2 months, and how is that determined?

This is my point, every one wants a “deal”, but when everyone starts buying at MSRP from the mfr, will you all be getting “a deal”, the “best” deal, or a “fair price” by your own definitions? At that point will you still be able to negotiate? anything? or will you be getting “screwed over” just like you feel you are now?

And still no one has addressed the elephant in the room, what do you do with your trade in?

Someone pointed out that Ford (or any MFR) would rather sell 500 cars a year to 3000 dealerships than 1 car to 1,500,00 people……and you’re right. Same goes for trades, no mfr is going to deal with your trade in.

Tesla takes trade ins and so does Rivian.  No reason there needs to be an independent dealer to handle the trades. Tesla, it appears, just sends the cars to auction.

So, Tesla doesn’t need dealers, but their model includes selling all their used trade in cars to….

…dealers?

What happens to the Tesla model if there are no dealers?

You’re not gonna get dealers out of the equation when it comes to used cars. 

In reply to SV reX :

At the risk of starting to sound like the crazy guy who hasn’t showered in three presidents standing on the corner screaming that the end is near…. 

I think that the manufacturers see used cars as a problem that they’d like to solve.  Kind of like how the DeBeers people have convinced everyone that the diamond is “forever” but what absolute buffoon would try to give his fiancee a rock that had previous sat atop another finger?

While it may not be some mustache-twirling evil scheme that’s been mapped out step-by-step, I think we’re seeing signs that the days where you buy your car and own it until you don’t want it anymore are numbered.  Once that happens, you really don’t need the independent dealers as much.  Sure, the manufacturer doesn’t want to deal in the used market as it exists right now, so let the indys – franchise holders with your brand or not – take those trade-ins and auction them to each other and sell them, undercutting your product on price all day every day. 

The first thing that they’re doing is trying to get people to purchase their car to order and then have it shipped to their local dealer where they take delivery.  You don’t really need an independent dealer to make that happen.  You can have a small(ish) retail location that serves as a place for the truck to unload, hold the car for a week or so until the customer picks it up, and some offices to do the paperwork.  Sure, the trade-ins will come but you can load those up and send them to auction and the used dealers will buy them up.  Maybe you partner with your existing franchise dealers and instead of having them order truckloads of vehicles that are looking for a buyer, they can deal in used cars, get a fee to deliver new cars, sell financial products, and perform service.  Hell, maybe you can even use that as a non-customer-facing location to simply put cars on Carvana-like carriers and deliver directly to the consumer.

Next up, they’re working really hard to get into the MRC business.  As a manufacturer, they don’t want to have to rely on making a number of new sales every month, they want to have subscriptions with revenue that comes in from the existing customer base every month.  So we get heated seats subscriptions, mandated OnStar (they’re probably recognizing that revenue over a period of time as opposed to all at once, if I had to guess.  I’m no CPA or MBA, but if they just wanted people to get used to OnStar, raising the vehicle price by that much would do the trick; I think you have to separate that cost out in order to recognize it as a pre-payment on a recurring monthly revenue item), and it’ll continue from there.  They’re going to walk consumers in to this regime slowly and easily and let all the rage blow off when it’s just heated seats.  But once it’s considered “normal” and people just shrug and buy it anyway they’ll apply that to pretty much anything they can.

Once we’re accustomed to paying our “options subscription” every month, the manufacturers will start telling us that maybe this model or that can’t really be “bought” anymore, but it’s lease-only with no buyout option.  See also: The GM EV1 as well as more recent news with manufacturers making the process expensive or written out by contract.  That’s kind of a waypoint, I think, and it could be a way to handle franchise dealers – you’re not really selling new cars like you used to, but you can re-sell or re-lease the captive lease returns.

That’ll only last until the manufacturer transitions to a “mobility subscription” model.  Buy a car?  Lease a car?  Oh, no, we don’t do that anymore.  You simply pay a monthly fee of $Texas for a set term and you’re renting the car from us.  After that term is over, you bring it back and we rent it back out to the next person until the asset is fully depreciated.  Since every feature on the car – I mean, Mobility Device – is subscription-based, all the next customer needs to do is choose which option packages they want added to the base subscription and they can drive it off the lot.  Something breaks?  Well, I’m sure that since you don’t own the asset anymore – the manufacturer would hold title, naturally – the provisions of the Magnuson-Moss Warranty Act no longer apply.  You have no right to repair something that you don’t own, right?  So now you are responsible for keeping your mobility device in good repair and it must be brought to the manufacturer’s facility – maybe they own it, maybe that’s what the current franchise dealer transitions to – for any sort of maintenance or service.  Once fully depreciated and no longer worth continuing to rent out, scrap it.

Anyway, that’s my tinfoil hat theory.  There’s some holes there: what do the books look like if the manufacturer holds that much paper on that many discreet assets that they’re renting out?  Does the manufacturer split into a “mobility maker” factory unit and a “subscription management” unit that “buys” the cars from the factory?  How are they going to manage things like registrations on that many cars in that many jurisdictions?  Will people show up with porches and titchforks and run them out of town on a rail when they try that?  I dunno.  But the financial incentive structures that exist right now make doing whatever they can to move to a pure recurring revenue model very attractive.  And, frankly, they don’t really need an independent dealer network to sell their cars for them to accomplish that.

SV reX said:

mattm said:

Tesla takes trade ins and so does Rivian.  No reason there needs to be an independent dealer to handle the trades. Tesla, it appears, just sends the cars to auction.

So, Tesla doesn’t need dealers, but their model includes selling all their used trade in cars to….

…dealers?

What happens to the Tesla model if there are no dealers?

You’re not gonna get dealers out of the equation when it comes to used cars. 

I think most of this discussion has been about new, manufacturer specific dealerships being a thing of the past.  The used-car game is going to be around forever, even though that experience is even more terrible.

ProDarwin said:

SV reX said:

mattm said:

Tesla takes trade ins and so does Rivian.  No reason there needs to be an independent dealer to handle the trades. Tesla, it appears, just sends the cars to auction.

So, Tesla doesn’t need dealers, but their model includes selling all their used trade in cars to….

…dealers?

What happens to the Tesla model if there are no dealers?

You’re not gonna get dealers out of the equation when it comes to used cars. 

I think most of this discussion has been about new, manufacturer specific dealerships being a thing of the past.  The used-car game is going to be around forever, even though that experience is even more terrible.

I understand. 
 

That comment was in response to the discussion about used cars being traded in for new ones at new car dealerships. 

wae said:

In reply to SV reX :

At the risk of starting to sound like the crazy guy who hasn’t showered in three presidents standing on the corner screaming that the end is near…. 

I think that the manufacturers see used cars as a problem that they’d like to solve.  Kind of like how the DeBeers people have convinced everyone that the diamond is “forever” but what absolute buffoon would try to give his fiancee a rock that had previous sat atop another finger?

While it may not be some mustache-twirling evil scheme that’s been mapped out step-by-step, I think we’re seeing signs that the days where you buy your car and own it until you don’t want it anymore are numbered.  Once that happens, you really don’t need the independent dealers as much.  Sure, the manufacturer doesn’t want to deal in the used market as it exists right now, so let the indys – franchise holders with your brand or not – take those trade-ins and auction them to each other and sell them, undercutting your product on price all day every day. 

The first thing that they’re doing is trying to get people to purchase their car to order and then have it shipped to their local dealer where they take delivery.  You don’t really need an independent dealer to make that happen.  You can have a small(ish) retail location that serves as a place for the truck to unload, hold the car for a week or so until the customer picks it up, and some offices to do the paperwork.  Sure, the trade-ins will come but you can load those up and send them to auction and the used dealers will buy them up.  Maybe you partner with your existing franchise dealers and instead of having them order truckloads of vehicles that are looking for a buyer, they can deal in used cars, get a fee to deliver new cars, sell financial products, and perform service.  Hell, maybe you can even use that as a non-customer-facing location to simply put cars on Carvana-like carriers and deliver directly to the consumer.

Next up, they’re working really hard to get into the MRC business.  As a manufacturer, they don’t want to have to rely on making a number of new sales every month, they want to have subscriptions with revenue that comes in from the existing customer base every month.  So we get heated seats subscriptions, mandated OnStar (they’re probably recognizing that revenue over a period of time as opposed to all at once, if I had to guess.  I’m no CPA or MBA, but if they just wanted people to get used to OnStar, raising the vehicle price by that much would do the trick; I think you have to separate that cost out in order to recognize it as a pre-payment on a recurring monthly revenue item), and it’ll continue from there.  They’re going to walk consumers in to this regime slowly and easily and let all the rage blow off when it’s just heated seats.  But once it’s considered “normal” and people just shrug and buy it anyway they’ll apply that to pretty much anything they can.

Once we’re accustomed to paying our “options subscription” every month, the manufacturers will start telling us that maybe this model or that can’t really be “bought” anymore, but it’s lease-only with no buyout option.  See also: The GM EV1 as well as more recent news with manufacturers making the process expensive or written out by contract.  That’s kind of a waypoint, I think, and it could be a way to handle franchise dealers – you’re not really selling new cars like you used to, but you can re-sell or re-lease the captive lease returns.

That’ll only last until the manufacturer transitions to a “mobility subscription” model.  Buy a car?  Lease a car?  Oh, no, we don’t do that anymore.  You simply pay a monthly fee of $Texas for a set term and you’re renting the car from us.  After that term is over, you bring it back and we rent it back out to the next person until the asset is fully depreciated.  Since every feature on the car – I mean, Mobility Device – is subscription-based, all the next customer needs to do is choose which option packages they want added to the base subscription and they can drive it off the lot.  Something breaks?  Well, I’m sure that since you don’t own the asset anymore – the manufacturer would hold title, naturally – the provisions of the Magnuson-Moss Warranty Act no longer apply.  You have no right to repair something that you don’t own, right?  So now you are responsible for keeping your mobility device in good repair and it must be brought to the manufacturer’s facility – maybe they own it, maybe that’s what the current franchise dealer transitions to – for any sort of maintenance or service.  Once fully depreciated and no longer worth continuing to rent out, scrap it.

Anyway, that’s my tinfoil hat theory.  There’s some holes there: what do the books look like if the manufacturer holds that much paper on that many discreet assets that they’re renting out?  Does the manufacturer split into a “mobility maker” factory unit and a “subscription management” unit that “buys” the cars from the factory?  How are they going to manage things like registrations on that many cars in that many jurisdictions?  Will people show up with porches and titchforks and run them out of town on a rail when they try that?  I dunno.  But the financial incentive structures that exist right now make doing whatever they can to move to a pure recurring revenue model very attractive.  And, frankly, they don’t really need an independent dealer network to sell their cars for them to accomplish that.

That’s probably a reasonable summary. 
 

I’m glad that by the time it is fully implemented, I’ll be dead. 

what absolute buffoon would try to give his fiancee a rock that had previous sat atop another finger?

A smart one

SV reX said:

I understand. 
 

That comment was in response to the discussion about used cars being traded in for new ones at new car dealerships. 

Ah, copy that.  Dealership isn’t needed for trade in though. See also:  Carvana

SV reX said:

mattm said:

MiniDave said:

One guy just wants “the best deal”, another just wants a “fair price”, but no one knows exactly what those are, do they?

In one case a guy can get in on a special mfr’s plan, what would he consider the best deal if he couldn’t?

Another says a fair price currently is MSRP, but what will it be in 2 months, and how is that determined?

This is my point, every one wants a “deal”, but when everyone starts buying at MSRP from the mfr, will you all be getting “a deal”, the “best” deal, or a “fair price” by your own definitions? At that point will you still be able to negotiate? anything? or will you be getting “screwed over” just like you feel you are now?

And still no one has addressed the elephant in the room, what do you do with your trade in?

Someone pointed out that Ford (or any MFR) would rather sell 500 cars a year to 3000 dealerships than 1 car to 1,500,00 people……and you’re right. Same goes for trades, no mfr is going to deal with your trade in.

Tesla takes trade ins and so does Rivian.  No reason there needs to be an independent dealer to handle the trades. Tesla, it appears, just sends the cars to auction.

So, Tesla doesn’t need dealers, but their model includes selling all their used trade in cars to….

…dealers?

What happens to the Tesla model if there are no dealers?

You’re not gonna get dealers out of the equation when it comes to used cars. 

I don’t think anyone is saying that there won’t be used car dealers, just that new car sales could move to the Tesla model.  Used car dealers already have to compete against the likes of Carmax and Carvana, Vroom etc.  They are not protected by outdated pieces of legislation when it comes to selling used cars.  I think people would like to see the same competition afforded to new car sales.  Its not just me, Jim Farley has gone on record saying that dealers increase the cost of Ford vehicles by $2000 compared to Tesla.  When you add that very public statement to the splitting of Ford ICE and EV divisions, if I owned a Ford franchise, I would be a little nervous. 

In reply to mattm :

That’s fine. But honestly it’s a lot of arguing over nothing. I don’t think dealers are going anywhere. 
 

Regarding Tesla… I absolutely disagree that manufacturers could “move to the Tesla model”. Tesla was built from the ground up to BE that model. Which is exactly why they can’t hit the kinds of production numbers the big boys can. Major manufacturers have 100 or more years invested in being submerged in the manufacturing model. 
 

I don’t believe they can make the shift. I believe they will TRY, and that the consumer experience will become a lot worse because of it. 
 

My $0.02

As I have said here multiple times, I think it’s a case of unrealistic expectations. I think many people go in looking for a fight, then they get one. If you include my ex-wife and my current fiance between new and used vehicles I have purchased 10 different cars over the last 12 years from new and used lots. 

I’ve only had one bad experience. When we purchased my now fiance’s lightly used Honda Fit (we no longer have it and she drives my Mazda 3 while I wait for my ’23 BRZ) from a Hyundai dealer here in OKC. It was a horrible, horrible experience. Mainly because they knew we needed to get her out of the breaking down Smart Car she had, and thanks to her ex, her credit wasn’t great. At one point, I had to scream at the the finance guy that “No, we don’t want the extended warranty, it’s an 18 month old Honda with 25k miles on it.”

Other than that, I haven’t had any bad experiences, and that includes buying 6 new vehicles. I’ve always found if you’re polite, but firm, you’ll have a good result. I find that works in most facets of life. 

I do have to admit, growing up my dad used to own a car lot, so I probably have a lot more experience with this type of thing than most people. 

SV reX said:

In reply to mattm :

That’s fine. But honestly it’s a hi lot of arguing over nothing. I don’t think dealers are going anywhere. 
 

Regarding Tesla… I absolutely disagree that manufacturers could “move to the Tesla model”. Tesla was built from the ground up to BE that model. Which is exactly why they can’t hit the kinds of production numbers the big boys can. Major manufacturers have 100 or more years invested in being submerged in the manufacturing model. 
 

I don’t believe they can make the shift. I believe they will TRY, and that the consumer experience will become a lot worse because of it. 
 

My $0.02

You are most likely right.  I get the impression of Elon Musk  that if things don’t go his way he’ll keep trying until they do.  
If that means he makes a foolish deal ( like twitter)  so be it.  

z31maniac said:

Other than that, I haven’t had any bad experiences, and that includes buying 6 new vehicles. I’ve always found if you’re polite, but firm, you’ll have a good result. I find that works in most facets of life. 

I’ve had a few bad experiences, although they were mostly in the 1990s.  Perhaps they treat middle-aged men better than young 20-somethings?  Perhaps as I’ve gotten older and made more money I’ve been shopping at more upmarket dealers?  Or perhaps the industry as a whole has shifted?

The one outlier to that is when I was shopping for my F-250 a couple years ago, the salesman at the Ford dealer near my house was a slimeball.  After a couple go-rounds with him I jettisoned that dealer and went with another one through the Costco buying program, which was smooth and seamless.

In reply to codrus (Forum Supporter) :

I bought my first new car 30 years ago when I was 27. It was a pretty painless experience and I got a decent deal and good value for my trade-in.

I bought my most recent new car 3 years ago when I was 54. It was a pretty painless experience and I got a slightly less decent deal because it was a unicorn and optioned exactly how I wanted it.

I never traded in any cars after the first one because there usually wasn’t much left. I’ve bought a few used cars from dealers, too.

In pretty much every case the experience was efficient and positive, because I knew what I wanted, what it was worth to me, and I never got anywhere near buying from a dealer I didn’t like. I just walked right off the bat and didn’t go back.

codrus (Forum Supporter) said:

z31maniac said:

Other than that, I haven’t had any bad experiences, and that includes buying 6 new vehicles. I’ve always found if you’re polite, but firm, you’ll have a good result. I find that works in most facets of life. 

I’ve had a few bad experiences, although they were mostly in the 1990s.  Perhaps they treat middle-aged men better than young 20-somethings?  Perhaps as I’ve gotten older and made more money I’ve been shopping at more upmarket dealers?  Or perhaps the industry as a whole has shifted?

The one outlier to that is when I was shopping for my F-250 a couple years ago, the salesman at the Ford dealer near my house was a slimeball.  After a couple go-rounds with him I jettisoned that dealer and went with another one through the Costco buying program, which was smooth and seamless.

 

Possibly? I purchased my first car from a dealer in 2010, I was 28 it was a 2006 350Z. That lasted 3 months before the ex-wife and I went to the Mazda dealer in Tulsa and purchased her a new 2010 Mazda 3 and myself and new 2010 MazdaSpeed 3, and I traded in the 350Z.  

I was 30 when I ordered my ’13 Mustang GT Track Pack. I just called the dealer and said, “Call me back with a price for this exact spec that’s good enough I won’t need to bother calling another dealer and I’ll be there 15 minutes after with a deposit.” The price was good enough that when I traded it in 7-8 months later with 6500 miles I got in trade what I paid for the car new. 

Once the dealers see you aren’t a rube, they don’t try to extract every last penny out of you. 

In reply to wae :

This is reasonable and terrifying. Heck, isn’t Volvo already doing this? 

In reply to grover :

It’s an available program with Volvo. It was with Cadillac too, but I’m not sure it still is.

grover said:

In reply to wae :

This is reasonable and terrifying. Heck, isn’t Volvo already doing this? 

GM had (has?) a car subscription program as well.