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Ford CEO says EVs will be sold 100% online with nonnegotiable price

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Re: Ford CEO says EVs will be sold 100% online with nonnegotiable price

#161
post #94

Earlier quoted context omitted.

In my opinion, we lose a lot, some things practical and others societal. Practically first, when I’m in the market for a new vehicle, I’m not sure which I honestly want. I like being able to go to a dealership and find something that convinced me otherwise from what I came to originally look at it. In the most recent case, I was really wanting a truck and being able to see them in person, how I fit, etc, was what sol…

Just a note, If you want to go sit in a Tesla or test drive one, you can still do that despite a complete lack of dealerships. In my experience, a Tesla is the only showroom experience where there was 0 pressure, and no-one trying to get my info or photocopy my driver license just to see the inside of a car. A lack of dealerships does not mean that there are no showrooms or test drives. There's nothing stopping Ford,…

You don't even need showrooms to give test drives -- there are companies out there which will drop off a car to your house to do a test drive.

Tesla mostly does test drives out of showrooms, but there is this:

> Tesla occasionally hosts test drive events for those who don’t live near a showroom. You can check out our events page to find regional test drive tours near you.

Re: Ford CEO says EVs will be sold 100% online with nonnegotiable price

#162
post #39

A lot has been said about the dealership model in the last few years, and the almost universal consensus is that it is an unnecessary and predatory industry and all auto makers should just sell cars directly like Tesla does. That being said, is there any counterpoint to this view? Are there any benefits that dealerships offer today over direct sales? What would we lose if we got rid of every dealership? If there is t…

1. Service centers. Others comments have talked about this.

2. Trade-ins. Most new car dealers also sell used cars (in fact many make more profit on used cars than with new cars). Because of this they can usually give you much better trade-in valuations than Tesla, which I believe just sends cars to auction. Obviously you could also just sell to CarMax/Carvana/etc. or sometimes sell a car to a dealership without buying a car. But this is an added bit of hassle.

Re: Ford CEO says EVs will be sold 100% online with nonnegotiable price

#163
post #39

A lot has been said about the dealership model in the last few years, and the almost universal consensus is that it is an unnecessary and predatory industry and all auto makers should just sell cars directly like Tesla does. That being said, is there any counterpoint to this view? Are there any benefits that dealerships offer today over direct sales? What would we lose if we got rid of every dealership? If there is t…

The way I've heard it explained before, feel free to correct me if my facts are wrong: State sales taxes. The big 3 auto makers are all located in Michigan, USA. If they sold a vehicle direct, the sales tax dollars goes to the State of Michigan. Which means all the other states are missing out on *significant* tax dollars. To force each state to get tax dollars, local dealerships were established. That way tax dollar…

Yes, as of Jun 2018:

https://en.wikipedia.org/wiki/South_Dakota_v._Wayfair,_Inc.

> The big 3 auto makers are all located in Michigan, USA. If they sold a vehicle direct, the sales tax dollars goes to the State of Michigan. Which means all the other states are missing out on significant tax dollars.

Also, this is not how it ever worked. Sales tax was and is never owed to the state the business is operating from. That is why buying online resulted in being able to evade sales taxes for many years, until the above Supreme Court ruling.

I wrote evade above, because the other states were not technically missing out on tax dollars. All states with sales tax have a “use tax”, which is owed to the state for bringing in merchandise that you have paid less tax on than if you were to have bought it in the state (Florida might be the only state without use tax for online purchases).

However, pursuing people for use tax for small items is a costly endeavor so most people get away with it. But a car is easy, since it has to be registered, the state can easily demand the use tax before making it road legal, and they do (for example when you buy from a no sales tax state and then take your car to be registered in another state).

Re: Ford CEO says EVs will be sold 100% online with nonnegotiable price

#165
post #39

A lot has been said about the dealership model in the last few years, and the almost universal consensus is that it is an unnecessary and predatory industry and all auto makers should just sell cars directly like Tesla does. That being said, is there any counterpoint to this view? Are there any benefits that dealerships offer today over direct sales? What would we lose if we got rid of every dealership? If there is t…

The main benefit is it allows some absurd accounting gimmicks that paper pushers have optimized over decades. It’s also a jobs program for all sorts of useless middlemen.

Re: Ford CEO says EVs will be sold 100% online with nonnegotiable price

#166
post #127
post #39

A lot has been said about the dealership model in the last few years, and the almost universal consensus is that it is an unnecessary and predatory industry and all auto makers should just sell cars directly like Tesla does. That being said, is there any counterpoint to this view? Are there any benefits that dealerships offer today over direct sales? What would we lose if we got rid of every dealership? If there is t…

When I see "No Haggle, Fixed-Price, Online Only", I think "Rip Off", and I can't be the only one. It's not that I enjoy haggling with car salesmen, walking out the door and getting hunted down in the parking lot like an animal... I don't... in fact I hate it. But at the end of the day I get a deal I'm satisfied and comfortable with - and it's always below MSRP - far below. I think what we're seeing here is a combinat…

> When I see "No Haggle, Fixed-Price, Online Only", I think "Rip Off", and I can't be the only one.

Since I'll know a fair price of the vehicle before I run across that, I can determine if it is a "ripe off" or a fair market price, with far less hassle/wasted time. I'd always buy from a no haggle dealership if the price was competitive (and my last vehicle purchase was exactly that, it was +-$1K from normal price based on vehicle loan records).

Re: Ford CEO says EVs will be sold 100% online with nonnegotiable price

#167
post #144
post #39

A lot has been said about the dealership model in the last few years, and the almost universal consensus is that it is an unnecessary and predatory industry and all auto makers should just sell cars directly like Tesla does. That being said, is there any counterpoint to this view? Are there any benefits that dealerships offer today over direct sales? What would we lose if we got rid of every dealership? If there is t…

One commonly said counterpoint is that having independent dealers means you get better warranty service. Here's how it works. I had a Subaru, and Subaru had a problem for a decade+ that their head gaskets were tissue paper and frequently failed. So I had one free replacement mid-warranty. I went in just after the warranty expired for a normal service and lo and behold, the head gasket was bad again. The dealer replac…

Often companies have leeway on warranties - when I did warranty work we had a five year warranty but could give a replacement up to six months “out of warranty” if needed.

Re: Ford CEO says EVs will be sold 100% online with nonnegotiable price

#168
post #127

Earlier quoted context omitted.

When I see "No Haggle, Fixed-Price, Online Only", I think "Rip Off", and I can't be the only one. It's not that I enjoy haggling with car salesmen, walking out the door and getting hunted down in the parking lot like an animal... I don't... in fact I hate it. But at the end of the day I get a deal I'm satisfied and comfortable with - and it's always below MSRP - far below. I think what we're seeing here is a combinat…

If you believe in competition then the logical consequence will be that the no haggle MSRP will be much more competitive than the current (well pre-COVID supply chain horror) MSRP with 5% padding built in because everyone likes to haggle and think that they are getting a good deal.

I don't follow this logic. The article says Ford is going 100% online for these cars, meaning there will be no other reference price available. Ford can charge whatever they want, so long as some people are willing to pay it - and during COVID we've seen people more than willing to way overpay on cars.

There is no competition with Ford's direct sales website. None.

At least dealerships attempt to compete on price.

Re: Ford CEO says EVs will be sold 100% online with nonnegotiable price

#169
post #39

A lot has been said about the dealership model in the last few years, and the almost universal consensus is that it is an unnecessary and predatory industry and all auto makers should just sell cars directly like Tesla does. That being said, is there any counterpoint to this view? Are there any benefits that dealerships offer today over direct sales? What would we lose if we got rid of every dealership? If there is t…

I think your mistake here is to look at dealers simply as sales outlets. Dealers would deny that. You sell a car once, but you work on it multiple times throughout its life. IMO the problem with comparing to other retail channels is that most things we buy aren't expensive enough to warrant the same level of upkeep as a $30,000 car. Tesla has made fixed-price online sales work so far, but notice that they're scrambli…

Before recent markups because of parts shortages, dealers mostly made almost nothing on new cars. Even now I'd assume most of their money comes from service and used car sales.

Re: Ford CEO says EVs will be sold 100% online with nonnegotiable price

#170

Earlier quoted context omitted.

It's a big purchase, so you'd want to at least test it out in person?

Even with dealer car sales there's usually a 48 hour or so grace period where if you realize you made a mistake, etc. they'll take it back and annul the sale. I imagine for a purely online sale there'd be a similar agreement and they just pick the car back up.

That’s often a side effect of lemon laws and similar requirements.
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