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Kill the laws that keep car dealers in business

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Re: Kill the laws that keep car dealers in business

#311

Earlier quoted context omitted.

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?

I'm not sure I understand your critique of my last point. I understand that many goods depreciate in value over time as a function of use and wear and tear.

I'm describing specifically the dynamics that cause a car that has been sold and driven 3 miles to be worth less on the market than if that same care had been test-driven 3 miles but not sold.

My argument is that while we tend to view the sale of the car as triggering a drop in value, that is not entirely responsible for the price drop.

The price drop is also a function of available financing options, since the vast majority of cars are purchased alongside a financing product... and the specific product used is not typically available to a customer wishing to purchase the vehicle that was sold and driven one mile.

Since price is a function of supply and demand, the price lowers (depreciation occurs) because there is less demand for the basket containing the car without OEM financing than there is for the basket containing the car with OEM financing.

This is what you'd expect, which is why OEMs offer financing incentives to increase demand.

My argument is not that depreciation doesn't occur (because that is the way we typically describe the "sold" one selling for less)... Just that without the financing incentives demand is lower and since price is a function of supply and demand, price is also lower.

The causality is important, since the topic being discussed was the mysterious way in which dealerships work.

My point in making this distinction is that consumers are buying a physical product and a finance product bundled together, thus there is room for significant innovation in the automotive industry simply by getting more clever/creative with how the car + finance + insurance are packaged...

Re: Kill the laws that keep car dealers in business

#312
post #67
post #44

Earlier quoted context omitted.

Laws are a product of culture. Copying a countries laws, without also copying its culture won't give you the effects you are hoping for.

Copying sane laws may not be perfect but it's not a bad way to go.

It happens in practice all the time. Not only between countries, but also between states in the various federal systems around the world. (And that's one of the arguments in favour of federal systems.)

Re: Kill the laws that keep car dealers in business

#313

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…

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,…

BMW build is ~2-3 weeks in Germany. ~1.5months to drive it off US dealer. AFAIK BMW options are very similar across countries.

Re: Kill the laws that keep car dealers in business

#314

Earlier quoted context omitted.

The interesting thing about the particular examples in this thread--local taxi companies, hotel franchises, dealer franchises--is that none of them are in fact "big businesses". If Uber and AirBnB and Tesla succeed, they will all be considerably larger than any other player in those spaces. They will be the big businesses. Personally, I have no interest in protecting businesses. I have an interest in protecting compe…

I'd argue that dealership model does not necessarily promote competition. If I want a Ford Focus, Ford still dictates what kind of car I get. Sure, the dealership may try to make a few hundred dollars by (unnecessarily) adding "value" to the car with floor mats and halogen lamps but what kind of car I get and at what price is a decision Ford makes. The problem I have with the dealerships is that they are saying Tesla…

> I honestly believe that successful car salespeople have the qualities that will help them land on their feet in any situation. So they will be alright.

For one guy I know this isn't true. He was a very good salesman of [a product], but eventually its economics changed, and after that, he couldn't find a job he wouldn't get fired at. Until car sales. I couldn't tell you why -- he's not a jerk or an idiot -- my best guess is that there's some level of generic "being an employee at a company" behaviors we take for granted (meeting long-term commitments, knowing the product) that just don't happen for him.

Re: Kill the laws that keep car dealers in business

#315
post #176

Earlier quoted context omitted.

If what the dealerships do is valuable enough to the customer, they would exist even without the ban on direct sales. Can you really make that assumption? Customers act selfishly, and game theory applies here. For example, you try a shoe on in the store and then buy it online for less. The store provided something valuable to you, but you still bought the shoe online. Eventually the store will go out of business if m…

"I sure wish I could have bought my Tesla from a dealer" - no one ever.

To be fair, most Teslas are being bought by enthusiasts. When they start selling the model 3 to people who just want a reliable car, there may in fact be some demand for the services typically offered by a dealership.

Re: Kill the laws that keep car dealers in business

#316
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.

Here in the US, we just bought a car and because they didn't have the model on lot anywhere, we just ordered through Toyota the exact model we wanted with all the features we wanted in preferred colors/finish. The dealership still got a cut but they helped us select the car are made the process very easy.

That's good to hear, I was under the impression that this wasn't possible.

Re: Kill the laws that keep car dealers in business

#317
post #57

Earlier quoted context omitted.

I would prefer paying for trying. It's added to the price anyway, it would be more customer friendly to have the fees exposed and not bundled with the purchase itself.

A lot of things people say they would pay for, when speaking to the press or market research etc, in practice they never do -- and obviously not in large numbers. I've read several stories of founders for example hearing people say "I'd buy that" etc, but in practice they found out nobody would bother with their product/service, it solved a non-painful enough problem, etc. Paying for checking out cars to buy seems li…

I am definitely not saying people would pay for trying stuff - they wouldn't and they would think it's ridiculous. I am saying I would gladly pay being an informed consumer.

It's the same with people thinking loyalty cards are good for them while banning that would actually benefit them.

Re: Kill the laws that keep car dealers in business

#318

Earlier quoted context omitted.

> only when they are "new" Ahh yes, they must benefit the environment only when new :)

Incentives on used car sales would be redundant, because the incentive gets baked into the price of the used car. A new Tesla gets a $7,500 tax credit when purchased in the US right now. If you turn around and sell it, you'll have to discount it by about $7,500 to account for the fact that you're competing with new cars that have that incentive.

Redundant yes, but nonetheless helpful to the environmental goals of the policy. It's just a subsidy on green products, which would increase demand for green products whether they are new or used.

Re: Kill the laws that keep car dealers in business

#319

Earlier quoted context omitted.

Point taken, and I'm glad you see the merit in the discussion about what things the state has any right to do. After all, sometimes trespassing is the right thing to do. I certainly hope the fire department doesn't wait to be invited if they notice my house is burning down! I guess I'm just extremely certain that after studying the lineage of a ban like this, one would discover that no, it really isn't necessary. May…

I think you're right that these laws aren't necessary. But I still think it's important to understand them before declaring them to be such. I have a hard time understanding how you can declare yourself to be "extremely certain" of something before you've gone out and obtained the information. It's supposed to be the other way around!

Past experience makes me pretty confident of what I'll find this time.

Re: Kill the laws that keep car dealers in business

#320

Earlier quoted context omitted.

tangential questions: why did you pause your career? Did you regret pausing it? were you easily able to get back in?

> why did you pause your career? Like a lot of programmers, I was bad at dealing with people, both personally and professionally, and knew I needed a way to address that. While a year of going up to complete strangers in an already tense environment and being rejected by 97% of them (an average rate) helped me greatly, it's taken quite a few more years to get better "at" people. > Did you regret pausing it? I did not…

thanks :)
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