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

Re: Kill the laws that keep car dealers in business

#231

Post by GhotiFish » Wed, Oct 28, 2015, 5:04 PM UTC

lawstudent2 wrote: post #156

joosters wrote: post #61

"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…

We know why it was put up. This is not a mystery. It was lobbied for by car dealerships in order to procure monopoly status, under the guise of 'consumer protection.' This is kind of a bullshit response, honestly. This is a very, very well plumbed, documented and reported on issue. The corollary to your statement about fences is: "About which you do not know, be silent." Car dealership laws may have served a purpose,…

Oh... so I'm one of those ignorant masses that should be silent, I hope that rule doesn't extend to asking to asking a few questions? If not, I hope you can forgive me for this:

Why were they made before? Why does this not apply now? This whole thing seems to be lifted on it's own bootstraps, and I think the grandparent post and I want this paradox addressed.

Re: Kill the laws that keep car dealers in business

#232

Post by andmarios » Wed, Oct 28, 2015, 5:04 PM UTC

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.

The dealer usually has some stock of the most common models and configurations that you can purchase right away. The car is custom built only if you don't like any of the available configurations (mostly happens for non-popular colors or extras).

Also dealers can co-operate and if one doesn't have the configuration you like, he may search for availability from other dealers.

Re: Kill the laws that keep car dealers in business

#233

Post by venning » Wed, Oct 28, 2015, 5:06 PM UTC

AnimalMuppet wrote: post #218

venning wrote: post #132

Earlier quoted context omitted.

We often moan about the taxi industry, the hotel industry, or the dealer associations but, in doing so, we miss something very important. The players in that industry often existed for years or decades in a state of government-backed protection without realizing it . Taxi drivers didn't necessarily lobby for market restrictions; they took advantage of the oligopoly, sure, but not necessarily consciously. If you live…

Some fences need to remain. Take barbers/hairdressers, for instance. It turns out that a barbershop can be a great place for spreading head lice. You want your barber/hairdresser to be trained to prevent that. That's part of what their licensing is about. So, are there any aspects of being a car dealer that are worthwhile fences? Offhand, I can't think of any, but that doesn't mean there are none.

I agree. As an avid "car guy" and a student of regulation, I cannot think of any reason for car dealers, as a whole, to be protected in the long-term. I am, however, perplexed with how we should address the possibility of established manufacturers attempting to cannibalize the sales of their most profitable franchises by building neighboring dealerships with their considerable capital.

I believe the California model actually offers a lot of hope: manufacturers can compete, but they must observe a 10 mile radius from existing franchises.

Re: Kill the laws that keep car dealers in business

#234

Post by MagnumOpus » Wed, Oct 28, 2015, 5:11 PM UTC

fjdjcjfjejs wrote: post #209

ITT: >Let's take money out of local communities and place even more wealth and power in the hands of wealthy megacorporations! HN truly disgusts me sometimes.

Local labour is inefficient, expensive and highly variable in quality. "Protecting local jobs" works against economies of scale and results in more expensive - and often worse - service.

People vote with their wallet against the local corner store and pro Trader Joe/WholeFoods, against the local radio shack and pro Amazon/Newegg, against the local carpenter and pro IKEA. Their lives are better and they are wealthier for not having to spend $50 on a HDMI cable or $800 on a kitchen table.

Re: Kill the laws that keep car dealers in business

#235

Post by maratd » Wed, Oct 28, 2015, 5:11 PM UTC

swatthatfly wrote: post #225

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.

> Most of the personnel retained at a dealership do useful work. That same work will be required regardless of who runs the show. Some people may benefit from this "service", but not me, nor any of the people I know. The only benefit I could see from my previous buying experiences is the act of handing out the key for a test drive. Everything else was simply designed to extract as much money from my pocket without gi…

Salesmen aren't a substantial part of the workforce in a dealership. Mechanics, secretaries, service coordinators are. You still need those.

Finally, while you're OK dropping the equivalent of a year's pay on a website, most people are not. They need to talk to someone. So you're still going to need salespeople ... although they'll be far more pleasant to deal with, since there will just be one price that everyone pays and you won't have to be in constant fear of being ripped off.

Re: Kill the laws that keep car dealers in business

#236

Post by brigade » Wed, Oct 28, 2015, 5:18 PM UTC

sgustard wrote: post #182

eloisant wrote: post #69

Earlier quoted context omitted.

In France there is almost no "inventory" of new cars in car dealership. You try the model they have, but then you can configure it exactly how you want and it gets custom built for you before being shipped to the dealership. Why can't you do that in US?

You can; custom ordering is always an option. Most people don't like to wait, or fear they lose price leverage. Which is to say there's often a chance to save by taking a car off the lot at the end of the month.

Plenty of dealerships don't let you custom order, period. Good luck finding a Honda/Acura dealership that does, for example. And when you can, you do lose any negotiation leverage you had and will pay at least MSRP for the privilege.

Re: Kill the laws that keep car dealers in business

#237

Post by ergothus » Wed, Oct 28, 2015, 5:18 PM UTC

I used to work with a company that worked with dealerships, and I learned some pretty surprising (to me) details.

For example: In most cases, the dealership buys the cars on the lot from the manufacturer via vastly short term loans. When the above article mentions the cost of sitting inventory, I assume that is what is being discussed. This isn't like inventory in a store, where the main concern is that it is losing value with age and occupying floorspace, this is actively costing INTEREST, in addition to deprecating with age and requiring lot space.

I'll also second the other comments that talk about Parts & Service as the primary income. User/Certified Pre-owned come in a distant second, and new cars (aside from certain brands) are at best a thin margin, sometimes a loss-leader.

While my management was very gung-ho about our customers, I saw nothing to convince me that the average dealership offers any value-add to the consumer, and where there is value-add it's destroyed by the laws that discourage competition and encourage industry practices that aren't good for the consumer.

Re: Kill the laws that keep car dealers in business

#238

Post by venning » Wed, Oct 28, 2015, 5:18 PM UTC

it_learnses wrote: post #219

venning wrote: 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…

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 and do not.

> were you easily able to get back in?

Hmm. I've discovered over time that I am particularly good at weighing what is worth learning and what is worth ignoring. (I base that on revisiting my old assertions of what technologies and trends will matter in the future.) In that way, any loss of time to periodic pauses to my career (there has been more than one) have been outweighed by my ability to renew it quickly. I wouldn't consider myself a "10x coder" but I'm decent and I reason well about complexity, which helps.

Whatever your status in your field, I highly recommend exploring other adventures in life for two reasons. First, seeing life without your career helps reduce its importance in your life, providing perspective on what can otherwise seem like an inviolable part of your identity. Second, if and when you return to your career, if it is something that you like, you will find yourself valuing it more. I started out not really sure I wanted to be in this whole software thing. Now, I love it and love being good at it. For that, I am thankful.

Re: Kill the laws that keep car dealers in business

#239

Post by AnimalMuppet » Wed, Oct 28, 2015, 5:23 PM UTC

venning wrote: post #233

AnimalMuppet wrote: post #218

Earlier quoted context omitted.

Some fences need to remain. Take barbers/hairdressers, for instance. It turns out that a barbershop can be a great place for spreading head lice. You want your barber/hairdresser to be trained to prevent that. That's part of what their licensing is about. So, are there any aspects of being a car dealer that are worthwhile fences? Offhand, I can't think of any, but that doesn't mean there are none.

I agree. As an avid "car guy" and a student of regulation, I cannot think of any reason for car dealers, as a whole, to be protected in the long-term. I am, however, perplexed with how we should address the possibility of established manufacturers attempting to cannibalize the sales of their most profitable franchises by building neighboring dealerships with their considerable capital. I believe the California model…

Pick a model - say, Chevrolet. Is there anywhere within the LA basin that isn't already within 10 miles of a Chevy dealership? Does this rule leave the manufacturer any place to be in a place like LA?

Re: Kill the laws that keep car dealers in business

#240

Post by logfromblammo » Wed, Oct 28, 2015, 5:39 PM UTC

gnoway wrote: post #113

venning wrote: post #83

Earlier quoted context omitted.

Yes and no. Yes, we could see the inventory of every Honda dealer in the region. And yes, we could exchange cars. However, the "requirement" that cars be swapped was something that managers told customers to ease their minds while they steered them towards a car that was on our lot. The only requirement was that both dealers had to agree on which cars were being swapped. Why tell them that? Because managers are loath…

You can't. It's aggravating. https://news.ycombinator.com/formatdoc

  - You can fake it.
  - Start with a blank line.
  - Indent each subsequent line with two spaces.
  - Use hyphens as your bullet.
  - Lines that are too long will cause
    horizontal scroll, so break them manually.