Why do we need dealers?

Trämör

7.3L > 6.7L
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BMW M4 Competition Convertible
With Tesla’s stock hitting 660+ and my truck back in the shop of yet another mediocre dealer, I’ve been wondering: Why do we even need dealers? It seems so expensive to maintain such a network for Ford, including the loss of margin on the vehicles. At the same time, it’s such a competitive, crappy business for the dealer themselves offering no real job securities and horrible pay & work hours. To me, it appears the only “needs” for a dealer from the consumer perspective are servicing related. I’d be fine buying my trucks and cars online straight from Ford, and check them out in person at a few designated showroom locations. Servicing is valid but doesn’t need all the mediocrity around it. If an automotive brand truly wanted to reimagine themselves, why not start by doing away with the sales portion of dealers?
 
Tesla is a con.
Without dealers everyone is paying msrp.
Mechanics make up to $50+ an hour.
Dealers biggest profit margin is their service and finance departments.

If your dealer is mediocre why take it there?
 
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Tesla is con.
Without dealers everyone is paying msrp.
Mechanics make up to $50+ an hour.
Dealers biggest profit margin is their service and finance departments.

If your dealer is mediocre why take it there?
I hear you but what if vehicles were competitively MSRP’d from the factory? Then you wouldn’t need dealers anymore to deal, but just service centers with as you say proper wages and quality standards (considering the OEM can focus on improving service versus maintaining a sales network).

As to my personal situation: I’ve researched so many dealers in the Chicago area, purchased from multiple, had major repairs at multiple, checked the dealer ratings across a swath of sites and services. At the end of the day, there is just no consumer experience out there like you should expect it from a 90k investment.
 
I agree with you completely. It's why I don't ever buy from dealers. I go through a broker. Invoice/X-Pricing minus whatever rebates Ford is offering or PCOs taken off the price and a flat $500 fee to the broker. If they can negotiate off the destination/delivery fee they keep that as well. It's worth it not to have to set foot inside a dealer finance office.

Any make/model I want and he can have it for me in a couple days at most. I've bought last 3 vehicles this way and special ordered the last two (2019 Subaru Ascent for the wife and recently 2020 Tremor).

I only need dealer for service/warranty work which I hate because my local one is terrible.
 
I basically bought my truck online and simply picked it up. I built it out through the website and submitted it to the dealer. Stopped in for 10 minutes to sign the build sheet and submit to Ford. Arranged my trade in value over email. Tracked my order through Alumizilla. When I got the call it arrived, I stopped in to inspect it and the next day I went to pick it up.

I used X-plan pricing plus incentives, so there was no need for negotiating. My financing was all pre-approved, so it was literally just 15 minutes of signing papers while they topped off the fuel.

I agree, the business model is changing.
 
How would you take a vehicle for a test drive? And when new models and colours come out, be sure the vehicle looks good in a particular colour?
 
How would you take a vehicle for a test drive? And when new models and colours come out, be sure the vehicle looks good in a particular colour?
A few select show rooms versus 10 dealers in a 20 mile radius.
 
Wow! Where do I start?

I hear you but what if vehicles were competitively MSRP’d from the factory? Then you wouldn’t need dealers anymore to deal, but just service centers with as you say proper wages and quality standards (considering the OEM can focus on improving service versus maintaining a sales network).

As to my personal situation: I’ve researched so many dealers in the Chicago area, purchased from multiple, had major repairs at multiple, checked the dealer ratings across a swath of sites and services. At the end of the day, there is just no consumer experience out there like you should expect it from a 90k investment.
Competitive? How do you think they get competitive? By having each dealer lower their pricing trying to get your business.

This competition would be extinct/is extinct with tesla type model!

I agree with you completely. It's why I don't ever buy from dealers. I go through a broker. Invoice/X-Pricing minus whatever rebates Ford is offering or PCOs taken off the price and a flat $500 fee to the broker. If they can negotiate off the destination/delivery fee they keep that as well. It's worth it not to have to set foot inside a dealer finance office.

Any make/model I want and he can have it for me in a couple days at most. I've bought last 3 vehicles this way and special ordered the last two (2019 Subaru Ascent for the wife and recently 2020 Tremor).

I only need dealer for service/warranty work which I hate because my local one is terrible.
Brokers buy through dealers they have relationships with. Brokers should have better pricing as they are buying 10 cars from a dealer per year vs 1 every other year like normal people. Brokers pass the savings to there client minus their fee.

This broker discount goes away in tesla type deal.

IMO the "Dealer" business model is on its way out, no need for a middle man. Might take 10 or 20 yrs.

It is more enjoyable to order your vehicle and it either gets shipped to you or you pick it up at a showroom
I did it this way. Ordered then shipped to my dealer but I paid invoice instead of msrp if I had ordered a tesla.

I agree. Nissan is testing in a lot of places essentially what carvana does. I think the typical dealer will be way different in a few years.
Different or extinct? Get ready for higher pricing no negotiations.

I basically bought my truck online and simply picked it up. I built it out through the website and submitted it to the dealer. Stopped in for 10 minutes to sign the build sheet and submit to Ford. Arranged my trade in value over email. Tracked my order through Alumizilla. When I got the call it arrived, I stopped in to inspect it and the next day I went to pick it up.

I used X-plan pricing plus incentives, so there was no need for negotiating. My financing was all pre-approved, so it was literally just 15 minutes of signing papers while they topped off the fuel.

I agree, the business model is changing.
Congrats, you used a dealer! What are you trying to say. Without the dealer there is no xplan.

Just waiting for ceo to lower pricing when cars don’t sell then having thousands(millions if Ford Toyota GM) pissed off costumers when you do.

A few select show rooms versus 10 dealers in a 20 mile radius.
Again taking away competition is a bad idea! I saw this with the old Ford svt program. Only a few svt dealers, meant it was easier to add adm vs today where you can get Shelby Raptors at or below invoice from small hometown dealers.


Don’t like the dealer system go buy a tesla. But for my money if I want electric I’m buying Porsche or Audi!
 
We have (in many cases) useless and non-value-added dealers because NADA is one of the biggest lobbying organizations in the country. Just like we have (in many cases) useless and non-value-added real estate agents because of the NAR. And so on and so forth. The list is large.
 
Tesla’s blue ocean is drying up. The big boys are coming to play.

TFL has a mach E they will be testing against the Tesla, should be interesting and Ford will be able to build 1 a minute.
 
Wow! Where do I start?


Competitive? How do you think they get competitive? By having each dealer lower their pricing trying to get your business.

This competition would be extinct/is extinct with tesla type model!


Brokers buy through dealers they have relationships with. Brokers should have better pricing as they are buying 10 cars from a dealer per year vs 1 every other year like normal people. Brokers pass the savings to there client minus their fee.

This broker discount goes away in tesla type deal.


I did it this way. Ordered then shipped to my dealer but I paid invoice instead of msrp if I had ordered a tesla.


Different or extinct? Get ready for higher pricing no negotiations.


Congrats, you used a dealer! What are you trying to say. Without the dealer there is no xplan.

Just waiting for ceo to lower pricing when cars don’t sell then having thousands(millions if Ford Toyota GM) pissed off costumers when you do.


Again taking away competition is a bad idea! I saw this with the old Ford svt program. Only a few svt dealers, meant it was easier to add adm vs today where you can get Shelby Raptors at or below invoice from small hometown dealers.


Don’t like the dealer system go buy a tesla. But for my money if I want electric I’m buying Porsche or Audi!
This is thread isn’t about electric vs combustion, it’s about the dealer system and how the automotive business model will change. I used Tesla as an example of a business model, not the be-all-end-all. As you know I’m German and I too would buy German electric over Tesla once they’ve caught up with the tech. Lastly, yes, I do believe the dealer system is shit. For all the competition that’s arguably out there because of the volume of dealers, it has a whole lot of issues in terms of quality, transparency, fairness and customer experience. That’s just a fact. I’d prefer a bit less competition (not do away with it) for a bit more quality across the board.
 
This is thread isn’t about electric vs combustion, it’s about the dealer system and how the automotive business model will change. I used Tesla as an example of a business model, not the be-all-end-all. As you know I’m German and I too would buy German electric over Tesla once they’ve caught up with the tech. Lastly, yes, I do believe the dealer system is shit. For all the competition that’s arguably out there because of the volume of dealers, it has a whole lot of issues in terms of quality, transparency, fairness and customer experience. That’s just a fact. I’d prefer a bit less competition (not do away with it) for a bit more quality across the board.
I was stating that I would purchase Porsche Audi electric vehicle before tesla because they have a dealer network in which I can get the best price. Dealers compete for your business and generally sell below msrp because of it.
 
This is a really interesting question to me. I think what it comes down to is the philosophy behind the business. Ford is in the business of manufacturing vehicles, not selling them. At least in the context of consumer retail. Tesla didn't really have a choice in foregoing a dealership/franchise model due to varying dealership laws across the good ol' USA. I'm curious how it will workout when Tesla starts moving some serious volume and the used Tesla market starts to build up - where will people go to get their Tesla repaired? If you're in PHX, no problem. If you are in Montana, who knows.

The comments about Tesla on here surprise me. What's wrong with building a successful American company, with many barriers to entry, from the ground up, for the purpose of making money? Nothing - it's called capitalism and it takes hard work, two things I believe to be good.

As to comments indicating competition is good - ask people from Texas how that is working out on Plattys.
 
I use dealers because there is no other choice when buying from the big three American car companies. However, I have not “shopped” in a dealership or dealt with a salesman in person or over the phone for more than a decade while buying at least a dozen new cars.

I do my research online and all of my negotiating over email. If their are plenty of available options, I work 3-4 dealers at the same time to get my best deal. If a dealership is not capable of dealing over email, I move on to the next dealer. If I have to see a vehicle in person to compare colors or external trim packages, I go to a local dealership to look at the options when they are closed on Sundays.

During the whole process, I do not set foot or even talk to anyone at the dealership until I have the entire deal in writing. If needed, I handle my own financing and I never trade in, so I completely remove the option of the dealer gouging me on the other side of the deal.

Do I need the concept of dealerships to get my best deal? Yes, because as others have said, the competition between them is what gets the price down to its lowest level. However, I am able to avoid the in-person haggling on price, financing and trade-in “pressure” they try to exert while you are sitting in the dealership. Because everything is done over email, the time I spend in the dealership is usually less than 60 minutes, which makes the overall experience tolerable.

I followed the same process when I ordered my Tremor. In this rare case, I talked to my salesman on the phone right before he placed my order because he wanted to make sure I was for real before using a priority 10. :cool:

I will walk in the dealership and meet my salesman for the first time when I pick it up in January.
 
I use dealers because there is no other choice when buying from the big three American car companies. However, I have not “shopped” in a dealership or dealt with a salesman in person or over the phone for more than a decade while buying at least a dozen new cars.

I do my research online and all of my negotiating over email. If their are plenty of available options, I work 3-4 dealers at the same time to get my best deal. If a dealership is not capable of dealing over email, I move on to the next dealer. If I have to see a vehicle in person to compare colors or external trim packages, I go to a local dealership to look at the options when they are closed on Sundays.

During the whole process, I do not set foot or even talk to anyone at the dealership until I have the entire deal in writing. If needed, I handle my own financing and I never trade in, so I completely remove the option of the dealer gouging me on the other side of the deal.

Do I need the concept of dealerships to get my best deal? Yes, because as others have said, the competition between them is what gets the price down to its lowest level. However, I am able to avoid the in-person haggling on price, financing and trade-in “pressure” they try to exert while you are sitting in the dealership. Because everything is done over email, the time I spend in the dealership is usually less than 60 minutes, which makes the overall experience tolerable.

I followed the same process when I ordered my Tremor. In this rare case, I talked to my salesman on the phone right before he placed my order because he wanted to make sure I was for real before using a priority 10. :cool:

I will walk in the dealership and meet my salesman for the first time when I pick it up in January.
I haven’t seen my salesman since this summer when I stopped to check out colors.

I’ve only talked to him to give my credit card number when he placed my order a couple weeks ago.
 
This is a really interesting question to me. I think what it comes down to is the philosophy behind the business. Ford is in the business of manufacturing vehicles, not selling them. At least in the context of consumer retail. Tesla didn't really have a choice in foregoing a dealership/franchise model due to varying dealership laws across the good ol' USA. I'm curious how it will workout when Tesla starts moving some serious volume and the used Tesla market starts to build up - where will people go to get their Tesla repaired? If you're in PHX, no problem. If you are in Montana, who knows.

The comments about Tesla on here surprise me. What's wrong with building a successful American company, with many barriers to entry, from the ground up, for the purpose of making money? Nothing - it's called capitalism and it takes hard work, two things I believe to be good.

As to comments indicating competition is good - ask people from Texas how that is working out on Plattys.

I agree with your comments on Tesla creating a new model for the car industry. If they can make it work for themselves, I see nothing wrong with it.

I am not sure about your last comment. I live in Texas and I have not had issues with dealers competing for my business when buying a new car. Maybe I missed your “Plattys” reference.
 
I haven’t seen my salesman since this summer when I stopped to check out colors.

I’ve only talked to him to give my credit card number when he placed my order a couple weeks ago.
My salesman initially said he wanted a deposit, but then never asked for it after placing my order. :unsure:
 
The dealer sales process is antiquated and adds no value - in fact it detracted from my enjoyment in buying the vehicle. I did end up buying from a dealer and the sales guy did a nice job - but I found the vehicle -had employee pricing, so all of this could have been done on line. Ford totally fails in the buying experience- but so do Dodge, GM...
 
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