Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Kill the laws that keep car dealers in business

vox.com

Post reply on HN
Print view View original

291–300 of 325 posts

Re: Kill the laws that keep car dealers in business

#291

Post by jessaustin »

mikeash wrote: post #245
jessaustin wrote: post #166

Earlier quoted context omitted.

Don't ever take a fence down... Conservatism is fine as mental shortcuts go, but we shouldn't take every mental shortcut available. We don't actually have to worry about shit that supposedly happened a hundred years ago, if we take the time to look at what's going on now. Right now , there are customers who want to buy, and producers who want to sell. Relaxing dealer requirements would allow those beneficial transact…

Why is a time limit on a law and the vast uncertainty that would surround it as people try to figure out if it will be extended better than just doing your research and finding out reasoning behind these laws when they were enacted? It's not like the information is unavailable. You don't have to mount an expedition to the Himalayas or anything. Just go look it up. You may well find that you still think these laws are…

You've tied yourself in knots here. "Vast uncertainty" about effective dates of regulations is worse than those regulations' direct effects on consumers who would like to purchase products? Worse according to whom, the Government Printing Office?

As other comments in the thread have made clear, the "research" has been done, and the ancient lore of how automobile sales were different from every other aspect of the economy a century ago has been rejected.

Re: Kill the laws that keep car dealers in business

#292

Post by maxerickson »

jacobr1 wrote: post #287
maxerickson wrote: post #221

Earlier quoted context omitted.

Incentives on new vehicle sales can change the fleet mix. I don't see how incentives on used sales can do that (there would be some more focus on resale value, but people already consider that). I think in the US we would get the most mileage out of reforming CAFE to make it less friendly to daily driver trucks.

Much of the total environmental impact of a car is in the initial manufacturing. The idea would be to increase the average age the fleet. It is plausible that this might actually have more of an environmental impact than increasing mean fuel efficiency. However, I doubt subsidy would actually defer the age vehicles are scrapped unless it is structured to encourage certain types of repairs. Implicitly this already hap…

Yeah, I assume that people are already mostly making economically sensible choices with used cars, so incentives there would mostly just shift prices.

Re: Kill the laws that keep car dealers in business

#293

Post by grandalf »

xixi77 wrote: post #272
rayiner wrote: post #222

Earlier quoted context omitted.

If I buy an Apple laptop, use it for a month, and return it, it'll be sold as a factory refurb, because it would no longer be "new." The discount on that will be 10-20% of the retail price. That's the depreciation just due to being "refurbished" versus "new." People would flip their shit if Apple resold 1-month used laptops as "new" at full retail price. Applying a similar discount to cars, a 1-month "try before you…

This is all true; I kinda wonder what prevents dealers from doing this with used and "certified pre-owned" vehicles...

To respond to the grandparent first, suppose the laptop had been used for a day and then returned. We really don't know for certain what criteria Apple uses when it decides whether to have a returned item go on the shelf or into the refurb process. The important thing is that we trust apple that when we buy one labeled "new" we are getting an unfettered piece of hardware with a fresh software load and no measurable wear and tear beyond what is typical for a new device.

The certified pre-owned programs are a way that the automotive OEM tries to add respectability to the used car business, which is often a bit shady. When a vehicle has been certified it's been looked over by a mechanic but most importantly it comes with a warranty that rivals a new car warranty.

The OEM is taking on financial risk by insuring the vehicle against defect, in order to increase the market price of its used vehicles, which improves leasing residuals and makes it possible for the firm to lease new vehicles less expensively.

You've hit upon the key issue, which is that it takes the OEM being willing to (in some way) embrace the used item and take responsibility for it the way it does with a new vehicle. Because of the focus on sales numbers financing that is actually a marketing program, once the vehicle has been sold once the OEM has no incentive to own/sell it again, since it is already "sold" as far as wall street is concerned.

So in order for this to change, OEMs would have to make financing and warranty products available that addressed the consumer concerns with a vehicle that someone else drove for a day, week, month, etc.... such as, for example, insurance against the realization a few weeks after purchase that the previous owner had spilled milk on the rear seat and it's now going sour (essentially giving the vehicle a permanent bad smell unless the seat is replaced).. etc.

Re: Kill the laws that keep car dealers in business

#294

Post by mikeash »

jessaustin wrote: post #291
mikeash wrote: post #245

Earlier quoted context omitted.

Why is a time limit on a law and the vast uncertainty that would surround it as people try to figure out if it will be extended better than just doing your research and finding out reasoning behind these laws when they were enacted? It's not like the information is unavailable. You don't have to mount an expedition to the Himalayas or anything. Just go look it up. You may well find that you still think these laws are…

You've tied yourself in knots here. "Vast uncertainty" about effective dates of regulations is worse than those regulations' direct effects on consumers who would like to purchase products? Worse according to whom, the Government Printing Office? As other comments in the thread have made clear, the "research" has been done, and the ancient lore of how automobile sales were different from every other aspect of the eco…

Yes, uncertainty in regulations is really damaging because businesses can't plan for it.

If the research has already been done and supports your desired outcome then why are you fighting it? The argument is not that these laws were enacted for a reason therefore they're good laws that should be kept. The argument is merely that you should understand why they were written before you argue against them. If you already understand that context then you're already doing what's being suggested.

Re: Kill the laws that keep car dealers in business

#295

Post by __jal »

SilasX wrote: post #251
maratd wrote: post #167

Earlier quoted context omitted.

> There aren't easy answers here I don't think the circumstances are as grim. Most of the personnel retained at a dealership do useful work. That same work will be required regardless of who runs the show. They may need to apply for a job at the new factory store, but that's really the extent of the displacement. You're not eliminating an entire industry. You're re-organizing it to reduce friction.

So there's an active, non-artificial market for scummy negotiating tactics and pressuring people to take deceptive financing deals?

I'm having trouble coming up with a meaning for "non-artificial market". Do you mean a market free of all forms of non-participant manipulation, coercion, information-assymetries, etc.? I don't think we make those on this planet.

Re: Kill the laws that keep car dealers in business

#296

Post by seanalltogether »

jpfr wrote: post #18
suneilp wrote: post #3

"the price of the cars that are sold needs to be high enough to cover the costs of building and storing the unsold ones." We shouldn't be having this problem anymore. It's a massive detriment to the economies of scale model. Most people don't need to buy a car overnight, which ironically is because they are so expensive. Keeping a small amount of cars for test driving and personal inspection is all that is needed. Th…

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.

Ugh this is how furniture works in the UK, honestly it's very frustrating to find the right bed or couch and then have to wait 8 weeks for it to be assembled and delivered.

Re: Kill the laws that keep car dealers in business

#297

Post by mfringel »

beeboop wrote: post #108
notjoedimaggio wrote: post #63

Earlier quoted context omitted.

I agree in theory, but the reality is that these companies made large investments under one set of legislation. If a society flips and completely changes the economic/legislative landscape under which companies operate, it creates a very unstable business environment and discourages capex especially. This would not be good for the long term economic health.

They made large investments under laws they lobbied for and made by politicians that were paid for. I have no qualms reversing a horrific abuse of lobbying and actions of unethical state congress members. They got to benefit from this farce for decades, it's time to shut it down.

"Let It Burn" is not the most airtight of analyses of a complex economic system.

Re: Kill the laws that keep car dealers in business

#298

Post by SilasX »

__jal wrote: post #295
SilasX wrote: post #251

Earlier quoted context omitted.

So there's an active, non-artificial market for scummy negotiating tactics and pressuring people to take deceptive financing deals?

I'm having trouble coming up with a meaning for "non-artificial market". Do you mean a market free of all forms of non-participant manipulation, coercion, information-assymetries, etc.? I don't think we make those on this planet.

Right, I get it, there's no perfect/elegant/ideal/Platonic market anywhere.

But if you really can't tell the difference between "people use car dealerships because they all find them more convenient" vs "people use car dealerships because of a law that says they have to buy this way", then you're generalizing too far from the above point.

Re: Kill the laws that keep car dealers in business

#299

Post by thescriptkiddie »

marssaxman wrote: post #250
alkonaut wrote: post #56

Earlier quoted context omitted.

> 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…

Buying a car but having to wait four months to actually get it sounds like the kind of horror story people used to tell when I was a kid about the terrible economic conditions in the Soviet Union. No, in the US people pretty much just go shopping, pick out a car, buy it, and drive it home. I know one guy who ordered a car custom and had to wait for it, but he is really into cars and is the sort of person who cultivat…

On the other hand, being forced to settle for whatever car is currently available sounds very soviet as well. A real capitalist would much rather have their expensive new depreciating asset assembled to their exact specifications and handed over with 0 miles on the odometer.

Re: Kill the laws that keep car dealers in business

#300

Post by strommen »

nickff wrote: post #215
strommen wrote: post #207

The only real consumer benefit that this article describes for factory-direct sales is cost savings from no longer carrying inventory. But that's a completely separate issue: there's no reason an indy dealer can't have a low inventory and custom-order new cars for all their customers. Dealers carry a large inventory because it works . People (for the most part) want to pick out their specific car and drive it off the…

If car companies "do not want" to sell direct, why did the dealers in so many states lobby for laws which guarantee that the manufacturers cannot sell directly to consumers?

The laws are typically guaranteeing that manufacturers cannot sell directly in places where they also have dealers.

Because a regional car dealer with $X0 million of revenue cannot compete with a multinational car manufacturer with $X0 billion of revenue. Any time a manufacturer didn't want a particular dealer around anymore, they could simply drop their prices and drive them out of business. That's not a healthy dynamic for a business relationship.

One could argue - and I agree - that the best way to handle this is via the free market, and let manufacturers who do this sort of thing gradually lose their distribution network due to lack of trust. But the short-term collateral damage is high-profile bankruptcies, unemployment, and high auto prices.

Post reply on HN