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Kill the laws that keep car dealers in business

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91–100 of 325 posts

Re: Kill the laws that keep car dealers in business

#91
I'll post the same thing I posted in the Bob Lutz on the Tesla thread with some amendments. https://news.ycombinator.com/item?id=10457754

According to Bob Lutz having car dealerships is a pro. LOL, I am yet to talk to anybody who actually enjoyed the car dealership experience weather it's buying or servicing the car. The whole car dealer enterprise is a rent seeking business. In many states you cannot have the manufacture sell the cars directly. That's changing slowly -- thanks to Tesla -- the dealer lobby is a big contributor in many local and state wide elections. The pricing for the automobile / features is not clear to begin with. It's to the point that there's many competing business that try to give you true car pricing. And, every step of the way the dealership tries to extract another fee / charge for you via various tactics like destination fees, myriad of financing fees, unneeded insurance (tire insurance, ones that overlap with the manufactures warranty).

Personally, I would love if the dealership model died. The alternative being ordering a car online and having it show up at home at a scheduled time. I imagine the same experience can be replicated the other way when the car needs servicing, schedule it online and have it picked up / drop it off and a point of aggregation of the car maker where they handle volume.

And before you tell me about the test drive and getting a feel for the car. Meh. Your fooling yourself if you think that a 15 minute test ride will tell you much about the cars performance, comfort or even layout. You will only learn that the seats are uncomfortable on a 3 hour trip once you take that 3 hour trip. If a test drive is really important to you, you should really rent the car for a couple days.

One could also make the argument that dealerships should go away based on their general discriminatory tendencies. Here's a recentish paper quantifying it: http://islandia.law.yale.edu/ayres/Ayres%20Siegelman%20Race%... . The quantify how much more dealerships by different gender / race. The recent book named Phishing for Phools dedicates some time to this topic as well.

Re: Kill the laws that keep car dealers in business

#92
Preferred process: - go online, pick a car you like, check out the colors - go to a dealer - (make a test drive) - buy the car (down payment or whatever) - dealer orders car - dealer receives car and notifies buyer - buyer picks up car (finalize transaction or whatever)

The only downside in this process is that you have to wait for the car to actually be produced and shipped to your dealer... I wouldn't have a problem with that

Re: Kill the laws that keep car dealers in business

#93

"Don’t ever take a fence down until you know the reason why it was put up" You can't write a balanced article on car dealerships without researching why these laws were enacted in the first place. So many people here just assume "oh, it's because of greed" - but perhaps you should spend a short time first of all investigating why these laws were created and the problems they were trying to solve. Likewise, you can't…

I seem to recall that the laws were put in place, at least in part, to protect the dealers who were financing the manufactures, only to have the manufactures come in and sell directly once vehicles were ready.

Re: Kill the laws that keep car dealers in business

#96
post #71
post #37

I paused my software development career to sell cars for a year. I sold cars at two different Honda dealerships, both owned by Fortune 500 companies in, what I believe is, the densest single market for Hondas in the US (Metro DC). There's a couple things missing from the situation as described by the author. First, dealerships don't really make that much of a profit on new car sales. At least not Honda dealers. Used…

>First, dealerships don't really make that much of a profit on new car sales. At least not Honda dealers. This is essentially the case on all volume mainstream manufacturers. Hyundai/Kia, Toyota/Scion, Honda, Nissan, Mazda, Ford, Chevrolet, Dodge/Chrysler all fall in this bucket in the United States. The exception to this being trucks (RAM, GMC and Chevy Silverado, Ford F-Series). Where money is actually made on sale…

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Re: Kill the laws that keep car dealers in business

#97
post #37

I paused my software development career to sell cars for a year. I sold cars at two different Honda dealerships, both owned by Fortune 500 companies in, what I believe is, the densest single market for Hondas in the US (Metro DC). There's a couple things missing from the situation as described by the author. First, dealerships don't really make that much of a profit on new car sales. At least not Honda dealers. Used…

> In order to sell a car, you have to have a car on your lot. I don't understand the above: you mean people buy new (unused) cars from dealers, "off the shelf"? Aren't most new cars custom? Are US customers more impatient, so that in order to close a sale you need to have the various options pre-built, so that people don't have to wait four months for their new car to be built? I have rarely seen a new car sitting at…

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Re: Kill the laws that keep car dealers in business

#98
post #37

I paused my software development career to sell cars for a year. I sold cars at two different Honda dealerships, both owned by Fortune 500 companies in, what I believe is, the densest single market for Hondas in the US (Metro DC). There's a couple things missing from the situation as described by the author. First, dealerships don't really make that much of a profit on new car sales. At least not Honda dealers. Used…

> In order to sell a car, you have to have a car on your lot. I don't understand the above: you mean people buy new (unused) cars from dealers, "off the shelf"? Aren't most new cars custom? Are US customers more impatient, so that in order to close a sale you need to have the various options pre-built, so that people don't have to wait four months for their new car to be built? I have rarely seen a new car sitting at…

Yes - it's not uncommon to have to wait a few weeks to get your car delivered after purchase.

Re: Kill the laws that keep car dealers in business

#99
post #94

In the Netherlands, you go to the dealer and order a car. The car gets built to order, unless it's in inventory at a nearby dealer. The way it works in the US sounds needlessly complicated to me.

> needlessly complicated

Doesn't seem complicated to me. The US system just warehouses inventory on dealer lots. Maybe because it's feasible due to geography.

Allocating inventory based on prior year's sales is just a way to provide growth incentive to dealers. They don't make much money on new car sales but they do make money on the volume of retained service customers, which is indirectly related to the aggregate of new car sales from prior years. So to make money in the future, the car dealers need to expand new car sales today.

Increasing sales is what the manufacturer wants.

This all seems like a pretty nicely worked out system, if you ask me.

Re: Kill the laws that keep car dealers in business

#100
post #18

Earlier quoted context omitted.

In Europe, only used cars are sold directly off the parking lot or showroom of the dealer. Normally, you choose the options (color, engine options, leather seats, ..) and the car is built for you. You can pick it up some weeks/months later. Manufacturers of high-priced cars may invite you to pick up the car at the plant when it comes off the line. They have a special "experience" designed around that.

Europe seems like an interesting country indeed. In many countries on the continent we call Europe, it works differently. I'm in a european country, and next-door to my office is a Porsche dealership where new cars roll out daily, filled with young men satisfied they used their whole bonus.

> Europe seems like an interesting country indeed

Yes, indeed!

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