Kill the laws that keep car dealers in business • Hacker News Board

Re: Kill the laws that keep car dealers in business

#301

Post by greedo » Wed, Oct 28, 2015, 8:53 PM UTC

venning wrote: post #153

chiph wrote: post #146

Earlier quoted context omitted.

> Customers hate having "mileage" on a new car I don't know why the swaps are driven. Why doesn't the dealer get a 1-ton truck and trailer, and haul the car to keep the odometer low? Oh, and the story about "Our swaps are gently driven by retirees" is bogus. I've been passed by those guys going 90 mph.

Now you've just taken a deal, which was probably worth $200, and made it even more expensive to execute. Not to mention, this is a customer who is already demanding enough to warrant a swap, so who's to say the demands won't increase once you've already sunk some cost into it. (See my note about swaps not being legally-binding until the sale.) > Oh, and the story about... Oh my goodness, salespeople absolutely abuse…

When I bought my Volkswagen, the dealer swapped with another in a diff state. The salesperson told me that he had accidentally left it in 4th gear the entire time (interstate driving at 75+). The gearbox is pretty good, but I was a bit peeved.

Re: Kill the laws that keep car dealers in business

#302

Post by bduerst » Wed, Oct 28, 2015, 9:03 PM UTC

grandalf wrote: post #286

bduerst wrote: post #216

Earlier quoted context omitted.

That's a equivocation fallacy on the semantics of the word depreciate . There are many different types of value that are reflected in the market price of a good. Cars that are no longer new lose value, thus by definition they depreciate.

The thing the customer initially bought new was a basket of several products: a vehicle and also a financing product. If a one-day-old vehicle cannot be bundled with the same financing product and must instead be bundled with a more expensive one, nobody would pay the same price for the vehicle so it must now be sold at a lower price, hence your "depreciation".

>a vehicle and also a financing product

Which is the false equivocation. You're ignoring that a vehicle market price reflects more than just financing value - a car isn't a basket of bricks.

At this point I feel like your efforts to tenuously redefine depreciation are indicative of a cognitive dissonance. Why do you really want to change how people define "depreciation" for cars?

Re: Kill the laws that keep car dealers in business

#303

Post by beeboop » Wed, Oct 28, 2015, 9:10 PM UTC

mfringel wrote: post #297

beeboop wrote: post #108

Earlier quoted context omitted.

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.

It's not like they would repeal the law and all private dealerships would be shut down the next day. They would continue as usual, probably for several years, and most would eventually get phased out. It's not letting it burn, it's just letting it die the death it should have died decades ago.

Re: Kill the laws that keep car dealers in business

#304

Post by marssaxman » Wed, Oct 28, 2015, 9:13 PM UTC

thescriptkiddie wrote: post #299

marssaxman wrote: post #250

Earlier quoted context omitted.

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.

This libertarian socialist prefers to let other people fund the depreciation. If a car's still in good shape by the time it's old enough that I can consider buying it without having to take out a loan, it's likely to stay in good shape as long as I continue to take care of it. Maintenance is expensive when it happens, but a loan payment happens every month, and the loan companies require you to pay for expensive insurance on top of that, so it's a pretty big win to just keep up an old car instead of buying a new one.

As an additional bonus, older cars are far less likely to be encrusted with insecure, untrustworthy, unreliable microcontroller-based nonsense, much less anything so insane as Tesla's over-the-air automatic firmware updates or GM's yes-we-rooted-your-car-in-the-factory OnStar thing.

Re: Kill the laws that keep car dealers in business

#305

Post by alkonaut » Wed, Oct 28, 2015, 9:43 PM UTC

hnal943 wrote: post #193

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…

Most dealers will not make a car custom for you; you have to choose from the available inventory. If they do not have it on the lot, they will ship and existing car from elsewhere (possibly another state), but they will charge you a delivery fee. It's crazy.

Now I just checked the VW "build my car" page for the US. For a new Golf you pick transmission, color, interior trim, choose if you want the "lighting pack" and then you are done.

Compared to their EU configurators that's quite a difference: the yes/no accessory options alone are 40-60 (!) choices for a new Golf. Just speccing a new car on the company sites here can be an hour of work at least.

That explains it at least a bit: there are way fewer customization options for new cars in the US, meaning the chance of a dealer having the right car (basically, the right trim+color) isn't unreasonable.

Re: Kill the laws that keep car dealers in business

#306

Post by blumkvist » Wed, Oct 28, 2015, 9:58 PM UTC

dankohn1 wrote: post #271

blumkvist wrote: post #117

Earlier quoted context omitted.

The state has other constituents besides the individual citizens. These laws have very sound reasoning and prevent very real and very big problems. Blindly running around, finding things to "disrupt" is not admirable. In fact, it's the opposite.

In fact it does not. Governments exist solely to provide for people. Everything else you've heard about -- companies, organizations, interest groups, etc. -- are fictions that exist to help or hurt the interests of individual people. What you have in car dealerships is a classic example of regulatory capture [0], where most people don't buy a car that often, so they're not particularly focused on dealer laws. But dea…

Nevertheless, they do exist and are constituents whether you like it or not.

Re: Kill the laws that keep car dealers in business

#307

Post by nradov » Wed, Oct 28, 2015, 10:01 PM UTC

bgribble wrote: post #7

Yep, buying a car sucks. But this is one of the largest supply-chain operations in the world. The dealer franchise system and its legal framework have evolved over 100 years and are balanced pretty delicately. It can't just be refactored by waving a regulatory wand at it and hoping for the best. Cars will still have to be warehoused, delivered, serviced, and resold. Somebody has to buy your old junky trade-in. Somebo…

CarMax will buy your old junky trade-in for cash today. So we already have somebody filling that role. http://www.carmax.com/enus/we-buy-cars/default.html

Re: Kill the laws that keep car dealers in business

#308

Post by alkonaut » Wed, Oct 28, 2015, 10:04 PM UTC

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…

I think four months (give or take one or two) is pretty much standard manufacturing times for new cars from most manufacturers. The difference in customizing new cars is absolutely astonishing. Let's take a look at a VW Jetta, sold both in the EU and the US. The "regular" one seems to be the Jetta SE so lets look at that.

In the US configurator (https://www.vw.com/builder/) for a new Jetta SE you choose between 1, engine, 1 transmission, 1 type of wheels, 7 colors, 1 interior color, and have 0 optional extras I'm not sure why the damn configurator takes me through page after page with no choices. That gives you SEVEN different models of Jetta SE. A dealer has to have SEVEN Jetta SE in his lot to be able to sell a customer ANY car he could have built on the site. Under those circumstances, I too would find it pretty shocking to wait several months because I wanted the red Jetta and the dealer had only one blue and two silver.

But now look a the UK page: http://www.volkswagen.co.uk/new/jetta-gp/configure

We have

7 engines to choose from (cheating, non-cheating etc)

5 wheel options

10 exterior colors

9 interior colors/trims

50 optional extras

So even if we can probably guess that a lot of the extras will be packaged in nearly every car, and some of the options like wheels could be switched by the dealer himself, a dealer couldn't reasonably have less than at least a few thousand Jetta SE's if he wanted to be certain to have the car I want. He isn't going to. So what I do is a configure my car from the several hundred thousand different configurations of Jetta SE I want, then I go to a delaer, haggle a few percent off the price, sign a piece of paper, and wait a couple of months for it to be built. Or I buy a used one in his lot, which is cheaper, but isn't exactly what I want.

As for horror stories: I just learned about "delivery fees" in the US.

Re: Kill the laws that keep car dealers in business

#309

Post by mikeyouse » Wed, Oct 28, 2015, 11:16 PM UTC

Digit-Al wrote: post #285

I am English, not American, so I may be misunderstanding this - but I believe sales tax might prove an incentive for some states to oppose any changes to their existing laws on this. As I understand it, local sales taxes are paid to the state where the sale is made. I assume every state has lots of car dealerships, but only a few states have car manufacturers. This would mean that if everyone started buying their car…

In the US, you're supposed to claim the sales taxes for all of your out-of-state online purposes every year. There's a supplement to your tax forms where you can itemize all of the online purchases you made and how much sales tax you owe. Since this form is voluntary and results in higher taxes, you can guess how many people actually go through this step.

However, like TrisMcC says, most states assess Sales Tax when you register the car in the state. So if you bought a car for $50k in Oregon (no Sales Tax), but then registered it in California (7.5%+ Sales Tax), your registration fees would be the standard fee + $3,750. If you bought your car more than 1 year ago (in California at least), you don't owe any sales tax and if you bought it in a state with lower tax, you just owe the difference.

For big online companies, we've started mandating that they collect sales tax on behalf of the customers, so for instance, Amazon now automatically collects sales tax based on where your billing address is. If direct sales were allowed, there'd surely be legislation to ensure that the manufacturers collect the tax for their customers.

Re: Kill the laws that keep car dealers in business

#310

Post by mikeyouse » Wed, Oct 28, 2015, 11:23 PM UTC

alaskamiller wrote: post #45

This is why Apple will take over the car industry. Integrate the best supply chain management, best logistics, best customization processes, best personalization processes, best servicing processes, best retail sales force, best legal compliance/adherence processes. Then look at how to make a giant iPod on wheels then deploy.

It's interesting that everyone assumes Apple's supply chain is superior to all of the auto companies. When looking at a Cost of Goods Sold basis, all of the big auto companies spend far more money on their products than Apple does (GM's COGS is several tens of billions higher than Apple's) -- and their margins are much smaller, so managing their suppliers and logistics matters much more to the auto companies' bottom line.

A single car has ~30,000 parts.. an iPhone has, what, a few hundred?

Why is it a given that Apple is going to be successful at doing something that they've shown no skill in actually doing?