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View Full Version : Direct sales vs dealerships, opinion?



ExtraSlow
02-24-2020, 08:04 PM
Rivan is in the news trying to get set up to sell directly to customers in Colorado. Among other states.

What do you think? Do you support direct sales, or should dealerships be protected? Or a hybrid solution?

killramos
02-24-2020, 08:11 PM
Fuck dealerships.

If I could order a car online through the company website I would. It’s the aspect of Tesla’s strategy I support most.

I haven’t had many super bad situations with dealerships, but certainly nothing about the experiences could be classified as good. Dealerships are forced cartels, I’d rather the free market decide the best way to buy or sell a vehicle.

you&me
02-24-2020, 08:23 PM
Fuck dealerships.

If I could order a car online through the company website I would. It’s the aspect of Tesla’s strategy I support most.

I haven’t had many super bad situations with dealerships, but certainly nothing about the experiences could be classified as good. Dealerships are forced cartels, I’d rather the free market decide the best way to buy or sell a vehicle.

The dealership model is definitely antiquated, but it's a relic of a time where there was no alternative.

You can't really blame the dealers that have invested (sometimes) 10s of millions in their (manufacturer mandated) facilities for protecting their position.

A new entrant to the market like Rivian doesn't have any legacy obligations, so I feel they should have a clear(er) shot at direct selling. However, if I was a dealer for a brand that was exploring direct selling, like say, Porsche and the manufacturer wanted to mow my grass, you can bet I'd put up a fight.

killramos
02-24-2020, 08:27 PM
Oh totally. I think the franchise agreements need to be honoured for whatever period they are exclusive for. Can’t have people taking advantage of a dealers test fleet only to be undercut by a manufacturer online.

However a new entrant? Fair game to direct sell.

Those states where they are trying to ban direct selling, that’s backward.

That said, if the dealers think they have such a compelling experience so as to make their cut worth it (lol) they can fill their boots.

ExtraSlow
02-24-2020, 08:34 PM
What if, hear me out here, you could buy online from a dealership!

killramos
02-24-2020, 08:35 PM
I mean, you essentially can.

ExtraSlow
02-24-2020, 08:36 PM
I mean, you essentially can.
Most dealerships don't think it's possible.

you&me
02-24-2020, 08:45 PM
There are still a number of significant costs that dealerships bear that is integral to the total ownership cycle of a vehicle, namely service and parts depts. Obviously these could be centralized and concentrated by manufacturers, but again this represents a significant investment by dealers that they're highly unlikely to simply walk away from... not to mention significant profit centres to offset the sometimes abysmal profits on the new cars (that the dealers are forced to buy from the manufacturer).

Then there are things like used cars, appraising and 'landing' trade-ins, etc.

None of this is insurmountable from the perspective of a technological or disruptive alternative, but there is a very significant investment by the players being disrupted (the dealers) that can't simply be ignored or brushed aside in the name of change.

spikerS
02-24-2020, 08:46 PM
Most dealerships don't think it's possible.

I bought Baygirl's car over the phone in like 15 mins... :dunno:

ExtraSlow
02-24-2020, 08:49 PM
I bought Baygirl's car over the phone in like 15 mins... :dunno:
That should be the norm.

Thaco
02-24-2020, 08:51 PM
i hate dealerships and their bullshit high pressure upsells, that's why i buy my vehicles from auction, i dont need the bullshit, i give you money, you give me car, done deal.

rage2
02-24-2020, 09:21 PM
NADAs benefits of a dealer model is hilarious.

https://www.nada.org/WorkArea/DownloadAsset.aspx?id=21474838849

1 is hilarious, encourages price shopping. Who has time for that for minuscule savings?

2, there are laws that enforce recall and communications. Local dealer doesn’t do any of the communications. And laws require Suzuki (their example) to continue to support their cars.

3, Tesla still employ locals.

4 contravenes 1 in terms of convenience.

I mean Tesla probably isn’t the best at setting direct sales as an example, but NADAs points are pretty stupid. I think the only advantage to a local model is loyalty. I’m well taken care of at the local dealers. Tesla would only give me special treatment if I was a celeb or influencer that can negatively affect their marketing efforts. A well thought out direct to consumer model would be able to replicate that easily.

In larger cities, traditional manufacturers already own corporate stores, so it’s already direct to consumer.

heavyD
02-25-2020, 09:29 AM
My issue is that dealerships are privately owned and do what's in the best interests of their business not necessarily what's best for the brand or owners. Plenty dealers don't even use manufacturer fills for oils and other fluids to save money. Subaru Calgary for example uses cheap bulk Esso oil when servicing vehicles and always try to upsell BG fuel injection cleaners and crap into services despite the fact that Subaru does not recommend the use of such treatments. The luxury brands are better but the local BMW dealers for example jack up the Freight & PDI charges for M cars for no other reason because they can. The only way to get them to remove their fudge factor was to threaten to walk out on the deal but I shouldn't have to do that when I'm trying to purchase a BMW.

killramos
02-25-2020, 09:34 AM
BMW’s problem is one guy owns both dealerships in the city.

tonytiger55
02-25-2020, 09:47 AM
Its a bit like when you go to a retail store to see or try a product. Then ordering off Amazon because its cheaper.
Could such a thing be done with buying a car? Buying a vehicle is the second biggest purchase a person makes (the first being a home). :dunno:

Buster
02-25-2020, 09:52 AM
should dealerships be protected?

Why should any business be protected?

dirtsniffer
02-25-2020, 10:00 AM
BMW’s problem is one guy owns both dealerships in the city.

And that guy is a real....

killramos
02-25-2020, 10:03 AM
And that guy is a real....

Yup. lol

Mitsu3000gt
02-25-2020, 11:28 AM
I would like it if there is an actual benefit, but without competition it's impossible to tell if there is a price advantage. Take Genesis for example and their "no haggle" pricing - they tell you that you're getting a deal, but you probably aren't.

I would like it if you could buy factory direct alongside dealerships - lower price in exchange for not using dealership resources, or something like that.

ExtraSlow
02-25-2020, 11:29 AM
Why should any business be protected?

I don't think they should. But others disagree I'm sure. Looking for debate and input.

SOAB
02-25-2020, 12:03 PM
everyone always says that the dealership model is antiquated. it may be. online sales are still not as common yet because for most people, this is a huge purchase.

lots of people say that they would rather have a set price and not have to deal with haggling, negotiating, etc. many brands have tried that, yet most customers that go into those stores still try to negotiate a better price, a better interest rate, free accessories to be thrown into the deal.

internet sales definitely can work but 99% of car buyers will want to sit in, touch, feel the vehicle they are buying before purchase. who pays the dealer to have that inventory in stock just so the customer can order it online? the manufacturer? they will just pass on the cost to the customer so what's the difference?

for some reason, profit seems to have become a dirty word for the automotive business, not just dealerships. I can't think of any other business model that has customers trying to dictate what percentage of profit a company is allowed to make. could you imagine going to Memory Express and demanding to know what their cost is on a TV and then telling them they are only allowed to make 3% gross profit off of that product from you? oh, and throw in free cables and cleaning supplies for that price. if they don't agree, they are just trying to rip you off because they are thieves and crooks. nobody needs to make that much margin on their product.

you&me
02-25-2020, 12:05 PM
And that guy is a real....

... lil' fella ???

This could be a new thread unto itself :rofl:

Buster
02-25-2020, 12:07 PM
Set, no haggle pricing will never happen in the general car market.

tonytiger55
02-25-2020, 12:24 PM
everyone always says that the dealership model is antiquated. it may be. online sales are still not as common yet because for most people, this is a huge purchase.

lots of people say that they would rather have a set price and not have to deal with haggling, negotiating, etc. many brands have tried that, yet most customers that go into those stores still try to negotiate a better price, a better interest rate, free accessories to be thrown into the deal.

internet sales definitely can work but 99% of car buyers will want to sit in, touch, feel the vehicle they are buying before purchase. who pays the dealer to have that inventory in stock just so the customer can order it online? the manufacturer? they will just pass on the cost to the customer so what's the difference?

for some reason, profit seems to have become a dirty word for the automotive business, not just dealerships. I can't think of any other business model that has customers trying to dictate what percentage of profit a company is allowed to make. could you imagine going to Memory Express and demanding to know what their cost is on a TV and then telling them they are only allowed to make 3% gross profit off of that product from you? oh, and throw in free cables and cleaning supplies for that price. if they don't agree, they are just trying to rip you off because they are thieves and crooks. nobody needs to make that much margin on their product.

It can work the other way, but not for new cars though. Just to offer a different perspective. In the UK, you have car supermarkets. The prices are fixed. The cars are usually a few years old. Lease buy backs etc. But the cars are still very new. You get a lot of choice. its like a giant warehouse/lot. Cars are organised by brand and model.
https://www.cargiant.co.uk/

My family have bought from them a quite a few times. Its taken the headache of going to Dealerships/small used dealerships. Its easier, simple and decent prices. The cars have been good too.
No idea if that model would work here.

SOAB
02-25-2020, 12:27 PM
It can work the other way, but not for new cars though. Just to offer a different perspective. In the UK, you have car supermarkets. The prices are fixed. The cars are usually a few years old. Lease buy backs etc. But the cars are still very new. You get a lot of choice. its like a giant warehouse/lot. Cars are organised by brand and model.
https://www.cargiant.co.uk/

My family have bought from them a quite a few times. Its taken the headache of going to Dealerships/small used dealerships. Its easier, simple and decent prices. The cars have been good too.
No idea if that model would work here.

what you described is basically a used car lot. ask around what people think of used car dealers around here? they're all worse than Hitler, apparently... haha

the no-haggle price has been tried in Canada and has failed every time.

Mitsu3000gt
02-25-2020, 12:36 PM
could you imagine going to Memory Express and demanding to know what their cost is on a TV and then telling them they are only allowed to make 3% gross profit off of that product from you? oh, and throw in free cables and cleaning supplies for that price. if they don't agree, they are just trying to rip you off because they are thieves and crooks. nobody needs to make that much margin on their product.

Maybe not at a chain store like Memory Express, but this precisely how most Home Theater equipment is sold haha. They also don't try to fuck you over every single step of the way.

The tricky part about car dealership profit is that even if they sold you the vehicle below their cost, they would still come out way ahead after dealer kickbacks, holdbacks, referrals (if you were happy), and parts/service assuming you serviced your car at the same place. Also, if they weren't so shady, people would probably haggle a lot less. You go in knowing 100% for sure that they are doing everything in their power to screw you, and will lie to you at every turn - of course people are going to have their guards up to the max and haggle as much as possible in that kind of environment. Also since there are so many dealerships, naturally people are going to shop around and play them against each other until they find the bottom. Nothing wrong with that IMO.

The other thing with vehicle cost is that anyone can find out what it is for $30, so if they don't tell you, why would you do business with that salesperson/dealership? You are going to find out regardless as part of a standard due diligence process, so they might as well tell you and earn your business rather than deliberately push you away.

blitz
02-25-2020, 12:37 PM
for some reason, profit seems to have become a dirty word for the automotive business, not just dealerships. I can't think of any other business model that has customers trying to dictate what percentage of profit a company is allowed to make. could you imagine going to Memory Express and demanding to know what their cost is on a TV and then telling them they are only allowed to make 3% gross profit off of that product from you? oh, and throw in free cables and cleaning supplies for that price. if they don't agree, they are just trying to rip you off because they are thieves and crooks. nobody needs to make that much margin on their product.

Memory Express has never force anyone to use the 4-square method when buying a computer, or switched from monthly to bi-weekly mid negotiation to try to fuck someone over. Or added a bunch of hidden fees to a sales agreement at the last minute.

People don't like interacting with car dealerships for a reason.

ExtraSlow
02-25-2020, 01:08 PM
everyone always says that the dealership model is antiquated. it may be. online sales are still not as common yet because for most people, this is a huge purchase.

lots of people say that they would rather have a set price and not have to deal with haggling, negotiating, etc. many brands have tried that, yet most customers that go into those stores still try to negotiate a better price, a better interest rate, free accessories to be thrown into the deal.

internet sales definitely can work but 99% of car buyers will want to sit in, touch, feel the vehicle they are buying before purchase. who pays the dealer to have that inventory in stock just so the customer can order it online? the manufacturer? they will just pass on the cost to the customer so what's the difference?

for some reason, profit seems to have become a dirty word for the automotive business, not just dealerships. I can't think of any other business model that has customers trying to dictate what percentage of profit a company is allowed to make. could you imagine going to Memory Express and demanding to know what their cost is on a TV and then telling them they are only allowed to make 3% gross profit off of that product from you? oh, and throw in free cables and cleaning supplies for that price. if they don't agree, they are just trying to rip you off because they are thieves and crooks. nobody needs to make that much margin on their product.

Fuel retailers too.

gmc72
02-25-2020, 01:33 PM
I voted for some sort of hybrid system. I like to drive a vehicle before buying, that's a deal breaker. Why not have delivery centers with salaried employees to show the vehicles and go on test drives with the customer, but you order the car online. The price is set, with a delivery fee for the person working there, and it is all known upfront. The person there can even help with the ordering at computers set up in the showroom. There is a service center attached for warranty work and such as well. There are no used vehicles at this site, and if you wanted to trade in your old car......................I haven't figured that part out yet.

Just my opinion for a Utopian car buying experience.

killramos
02-25-2020, 01:34 PM
I couldn’t care less how much profit the dealership makes, if they are selling something I want for a price I am willing to pay that’s great.

I would much rather salesman see themselves are facilitators, being experts whose job is to make sure I am informed about what I am buying and providing a level of customer service. Rather than being actively combative in what is a 0 sum game that is a terrible experience for all involved.

SOAB
02-25-2020, 01:40 PM
The tricky part about car dealership profit is that even if they sold you the vehicle below their cost, they would still come out way ahead after dealer kickbacks, holdbacks, referrals (if you were happy), and parts/service assuming you serviced your car at the same place. Also, if they weren't so shady, people would probably haggle a lot less. You go in knowing 100% for sure that they are doing everything in their power to screw you, and will lie to you at every turn - of course people are going to have their guards up to the max and haggle as much as possible in that kind of environment. Also since there are so many dealerships, naturally people are going to shop around and play them against each other until they find the bottom. Nothing wrong with that IMO.



ok, so that just proves my point. what makes you think that you should dictate that the dealer should have to sell you a vehicle at cost? because you might give them a referral which would also want it at cost? what if that dealer doesn't meet the required quote to get the so called kickbacks, holdbacks, etc that you refer to? what about the interest that the dealer has to pay on all the in-stock units? you think the $300 gross profit on a $18,000 car pays for any of that? lol.

you guys talk like every dealer is shady and tries to screw you. not unlike how every customer that has a trade in doesn't try to lie and hide problems and issues that their trade in has. you think dealers lie? customers are full of lies. you think everyone on kijiji selling cars are always completely honest about their vehicles?

- - - Updated - - -


I voted for some sort of hybrid system. I like to drive a vehicle before buying, that's a deal breaker. Why not have delivery centers with salaried employees to show the vehicles and go on test drives with the customer, but you order the car online. The price is set, with a delivery fee for the person working there, and it is all known upfront. The person there can even help with the ordering at computers set up in the showroom. There is a service center attached for warranty work and such as well. There are no used vehicles at this site, and if you wanted to trade in your old car......................I haven't figured that part out yet.

Just my opinion for a Utopian car buying experience.

again, trying to sell a vehicle for a set price. it's been tried many times and has failed every time.

you&me
02-25-2020, 01:54 PM
I voted for some sort of hybrid system. I like to drive a vehicle before buying, that's a deal breaker. Why not have delivery centers with salaried employees to show the vehicles and go on test drives with the customer, but you order the car online. The price is set, with a delivery fee for the person working there, and it is all known upfront. The person there can even help with the ordering at computers set up in the showroom. There is a service center attached for warranty work and such as well. There are no used vehicles at this site, and if you wanted to trade in your old car......................I haven't figured that part out yet.

Just my opinion for a Utopian car buying experience.

The trade in part is actually already handled and established, and the dealership being the "landing" point of the trade is the last piece of that puzzle.


The most insurmountable part of this whole revamping of the new car buying experience is the manufacturers pulling the rug out from under their franchisees... That's the part that can't be reconciled without a huge payout / buyback from the manufacturer to the dealerships.

ExtraSlow
02-25-2020, 01:56 PM
The most insurmountable part of this whole revamping of the new car buying experience is the manufacturers pulling the rug out from under their franchisees... That's the part that can't be reconciled without a huge payout / buyback from the manufacturer to the dealerships. At least make it legal to do direct sales in all jurisdictions and let the manufacturers and the dealerships figure that out themselves. The government doesn't need to figure out who is liable to whom, but just to get out of the way to allow the private market to find the best solution.

Disoblige
02-25-2020, 02:05 PM
You guys aren't thinking outside the box. What is the root cause of all this? People who generally have poor haggling skills, poor car knowledge, or a combination of both tend to get the shit end of the stick here. The best deals come from good hagglers, and also those who know cars to compare to others on the market.

So, my point is...

Schools need to teach you haggling and car knowledge in CALM :rofl:

Mitsu3000gt
02-25-2020, 02:23 PM
ok, so that just proves my point. what makes you think that you should dictate that the dealer should have to sell you a vehicle at cost? because you might give them a referral which would also want it at cost? what if that dealer doesn't meet the required quote to get the so called kickbacks, holdbacks, etc that you refer to? what about the interest that the dealer has to pay on all the in-stock units? you think the $300 gross profit on a $18,000 car pays for any of that? lol.

you guys talk like every dealer is shady and tries to screw you. not unlike how every customer that has a trade in doesn't try to lie and hide problems and issues that their trade in has. you think dealers lie? customers are full of lies. you think everyone on kijiji selling cars are always completely honest about their vehicles?


I think what you're missing is the broader fact that nobody is dictating a thing. A dealership will never sell a car for a price they don't want to, in the end it is 100% their decision. You make an offer and it's entirely up to them to accept. Vehicle cost is publicly available information and a standard part of the due diligence process. Dealerships make the majority of their money on items like protection packages and parts & service, not new car sales (last I checked new car sales only account for around 25% of the profit). If dealers don't want to pay interest on new vehicles sitting on the lot, maybe they should manage their stock orders better and treat customers better. On the flip side, if a customers offer is too low, no dealer will accept, and they don't get the car....it's almost as if it operates like a standard business. If a customer is able to find a dealer that will accept the price they want, then it's win/win.

To your second point, it doesn't really matter how much a customer lies about a trade in, the dealership is going to inspect it and once again they have the final say - they don't have to take your trade in when they discover you've been lying to them.

Also, I'm willing to bet the majority of vehicle buyers don't haggle very much and don't do their homework - the dealers are not exactly suffering here.

You make it sound like customers are approaching dealers and forcing them to accept a bad deal, if you can find me a single dealership that operates like that I'm sure we'd all love to know about it haha.

HiSpec
02-25-2020, 02:37 PM
The luxury brands are better but the local BMW dealers for example jack up the Freight & PDI charges for M cars for no other reason because they can. The only way to get them to remove their fudge factor was to threaten to walk out on the deal but I shouldn't have to do that when I'm trying to purchase a BMW.

I also noticed few dealerships charge different Freight & PDI than their corporate website.

SOAB
02-25-2020, 02:42 PM
I think what you're missing is the broader fact that nobody is dictating a thing. A dealership will never sell a car for a price they don't want to, in the end it is 100% their decision. You make an offer and it's entirely up to them to accept. Vehicle cost is publicly available information and a standard part of the due diligence process. Dealerships make the majority of their money on items like protection packages and parts & service, not new car sales (last I checked new car sales only account for around 25% of the profit). If dealers don't want to pay interest on new vehicles sitting on the lot, maybe they should manage their stock orders better and treat customers better. On the flip side, if a customers offer is too low, no dealer will accept, and they don't get the car....it's almost as if it operates like a standard business. If a customer is able to find a dealer that will accept the price they want, then it's win/win.

To your second point, it doesn't really matter how much a customer lies about a trade in, the dealership is going to inspect it and once again they have the final say - they don't have to take your trade in when they discover you've been lying to them.

Also, I'm willing to bet the majority of vehicle buyers don't haggle very much and don't do their homework - the dealers are not exactly suffering here.

You make it sound like customers are approaching dealers and forcing them to accept a bad deal, if you can find me a single dealership that operates like that I'm sure we'd all love to know about it haha.

trade-ins don't go into for inspection until after the deal is done.

sure, dealers can manage their inventory better but alot of the time, manufacturers just send them a bunch of cars that are optioned out that nobody wants. bad colours, bad option packages, unpopular models and the dealer has to try and sell them.

I'm not saying that dealers are forced to accept bullshit offers from customers. I'm saying that those same customers get their offers rejected and are pissed that the dealers are just trying to "rip them off" and low ball them on their shitty 2004 Honda civic that is worthless to the dealer. they shouldn't be "allowed to charge a doc fee" or anything like that because the business office person should be getting paid from the measly $300 gross profit from the sale of the car.
so many people walk into a dealership with a chip on their shoulder, thinking that their shitty trade-in is worth more than market value while they should get their new vehicle at 10% below cost because "dealers make that back on hold-back and kick-backs from the manufacturer.

I'm not saying that the car buying & selling business is squeaky clean. there are lots of areas of improvement. some sales people really are sleazy but some customers are just as bad.

killramos
02-25-2020, 02:51 PM
Lol I have never seen someone try to defend a documentation fee before. That was hilarious.

SOAB
02-25-2020, 03:00 PM
Lol I have never seen someone try to defend a documentation fee before. That was hilarious.

You're the type of customer I'm talking about. "they wouldn't budge on their stupid fee or price so they are con artists!"

I wasn't defending it, I'm just stating what customers say. IMO, it should be an OTD price on all cars, take it or leave it but customers have shown that they don't want that so dealers need to try and recoupe some money when they sell the car to the customer at or below cost.

you guys act like dealers make money hand over fist and rape every customer for every red penny that they have and that is just not the case.

rage2
02-25-2020, 03:05 PM
last I checked new car sales only account for around 25% of the profit
It's less than that. It's typically a break even department. The profits comes primary from service, followed by used car sales.

SOAB
02-25-2020, 03:14 PM
basically, if the new car department can break even for the month, it has been a decent month. never in a million years would they see a 25% (HAHAHAHAHA!!!!) profit!

dirtsniffer
02-25-2020, 03:15 PM
You're the type of customer I'm talking about. "they wouldn't budge on their stupid fee or price so they are con artists!"

I wasn't defending it, I'm just stating what customers say. IMO, it should be an OTD price on all cars, take it or leave it but customers have shown that they don't want that so dealers need to try and recoupe some money when they sell the car to the customer at or below cost.

you guys act like dealers make money hand over fist and rape every customer for every red penny that they have and that is just not the case.

I know a few business office folk who earn a quarter million peddling 3m and warranties. ya, you can fuck off on the doc fee.

killramos
02-25-2020, 03:17 PM
Sounds like getting out of selling new cars and just contracting with the manufacturer to provide service would be a dream proposition for a dealer.

They should all be flocking to sign up for direct sales and out of that money losing venture that selling new cars is getting them.

Disoblige
02-25-2020, 03:17 PM
last I checked new car sales only account for around 25% of the profit.
I dislike greasy dealers like anyone would but man...
Gotta get your facts straight. So many things in this statement that is cringey. I mean, I wonder what dealers must think of you with that sense of entitlement thinking new car sales "only" account for 25% of the profit, lol.

Mitsu3000gt
02-25-2020, 03:18 PM
trade-ins don't go into for inspection until after the deal is done.

sure, dealers can manage their inventory better but alot of the time, manufacturers just send them a bunch of cars that are optioned out that nobody wants. bad colours, bad option packages, unpopular models and the dealer has to try and sell them.

I'm not saying that dealers are forced to accept bullshit offers from customers. I'm saying that those same customers get their offers rejected and are pissed that the dealers are just trying to "rip them off" and low ball them on their shitty 2004 Honda civic that is worthless to the dealer. they shouldn't be "allowed to charge a doc fee" or anything like that because the business office person should be getting paid from the measly $300 gross profit from the sale of the car.
so many people walk into a dealership with a chip on their shoulder, thinking that their shitty trade-in is worth more than market value while they should get their new vehicle at 10% below cost because "dealers make that back on hold-back and kick-backs from the manufacturer.

I'm not saying that the car buying & selling business is squeaky clean. there are lots of areas of improvement. some sales people really are sleazy but some customers are just as bad.

Well, you kept saying that customers dictate the price, and that is primarily what I am disagreeing with. The customer dictates nothing, the dealership holds almost all the cards and if the customer is being unreasonable, they aren't going to agree to the deal. If the customer gets the dealership to agree to a particular deal, then the dealership is obviously fine with whatever benefit they get from it whether that is straight profit, or to move more inventory for bigger manufacturer kickbacks, or something else.

I've only done or helped people with a few trade ins, but in every case an inspection was done before they signed off on it. I can't believe it's the norm to do it after, I have never even heard of that and it just doesn't make sense. Why would they sign off on a trade-in value of X before inspecting the car? No dealer in their right mind would sign off on a trade in amount without even knowing if it was roadworthy or re-sellable. Trade-ins are dumb anyway, unless they are going to give you close to private sale value, it's a horrible value proposition. It also just gives the dealer another number to work with to trick you into thinking you're getting a deal on the new vehicle. If you're rich enough not to care, then that's great. I don't see how someone being upset that a dealer won't give them X dollars for their trade in is an issue - if both parties aren't happy with the deal then it doesn't happen and they can be as mad as they want, but neither party is any worse off for it.

The office person isn't getting paid from the $300 commission split X number of ways, they are getting paid out of the giant pot of money the dealership makes from all facets of the business and are likely salaried in that position anyway, possibly with a bonus structure for selling protection packages and insurance. Sales people are almost entirely commission based however if you've seen the quality of the average sales person, it's not hard to see why only a tiny percentage of them are actually successful. The less successful they are, the more desperate they probably get, and the more willing they probably are to use shady tactics to get a sale.

The reason people go into a dealership with a chip on their shoulder is they legitimately try to screw you and rip you off every single step of the way. Even the best dealers in the city with the best reputations still openly lie to customers to get them to buy useless things like protection packages. The only way for a customer to avoid getting screwed is to have their guard up and do their due diligence. Just as one example, instead of marking up PPF, protection packages, and undercoating 500%, why not offer those things at a fair market price and make money on volume and reputation rather than the few suckers they trick into buying it every month? There are so many simple tings they could do to improve their reputations but they aren't interested. And I know you acknowledged there is a lot to improve on, I just think it's much more on the dealer side of things than the customer's side.

IMHO the common denominator is the fact that almost every dealership is extremely shady, so obviously the customers are going to behave differently. Compare that to a different business where every customer is treated fairly and not lied to, and it's night and day. I can't think of many other businesses that literally sneak things onto your invoice and hope you don't notice, waste hours of your time lying to you over and over again, reneg on refundable deposits, lie about product history, take advantage of the vulnerable, etc. nearly to the degree that car dealerships to. It's not just a case of a few bad apples either, almost every dealership operates this way and when you find one that is pleasant to deal with it's the exception not the norm. If that weren't the case, interactions on both sides would be far more pleasant for all parties involved, in theory anyway.

Again, the dealer isn't going to sell you a car if they aren't happy with their side of the deal. Who cares if the customer is pissed that the dealer won't accept 10% below cost? Obviously that is not a price the market will bear. Most of them probably won't accept an offer like that, but neither party is harmed in any way if your offer is simply rejected. If you're looking at scenarios where dealers screw customers vs customers screwing dealers, I think you will find that it is pretty one sided. The dealers have all the tools necessary to protect themselves from anything a customer might reasonably do (i.e. trade in a car with an issue), whereas it is much harder for a customer to do the same, especially if you don't have good knowledge of the industry.

SOAB
02-25-2020, 03:21 PM
I know a few business office folk who earn a quarter million peddling 3m and warranties. ya, you can fuck off on the doc fee.

like I said, I don't agree with adding it in at the signing of the paperwork. it should all be done before-hand.

Mitsu3000gt
02-25-2020, 03:23 PM
I dislike greasy dealers like anyone would but man...
Gotta get your facts straight. So many things in this statement that is cringey. I mean, I wonder what dealers must think of you with that sense of entitlement thinking new car sales "only" account for 25% of the profit, lol.

I got that number from the NADA, do you have a better source? I think the figure I read was 26% gross profit, so actual would be even less.

I have no idea what dealers think of me, but the last few cars I bought were 95% over email and I didn't waste even a second of their time. I'm guessing they like selling cars without having to do any work, but what do I know.

SOAB
02-25-2020, 03:28 PM
Well, you kept saying that customers dictate the price, and that is primarily what I am disagreeing with. The customer dictates nothing, the dealership holds almost all the cards and if the customer is being unreasonable, they aren't going to agree to the deal. If the customer gets the dealership to agree to a particular deal, then the dealership is obviously fine with whatever benefit they get from it whether that is straight profit, or to move more inventory for bigger manufacturer kickbacks, or something else.

I've only done or helped people with a few trade ins, but in every case an inspection was done before they signed off on it. I can't believe it's the norm to do it after, I have never even heard of that and it just doesn't make sense. Why would they sign off on a trade-in value of X before inspecting the car? No dealer in their right mind would sign off on a trade in amount without even knowing if it was roadworthy or re-sellable. Trade-ins are dumb anyway, unless they are going to give you close to private sale value, it's a horrible value proposition. It also just gives the dealer another number to work with to trick you into thinking you're getting a deal on the new vehicle. If you're rich enough not to care, then that's great. I don't see how someone being upset that a dealer won't give them X dollars for their trade in is an issue - if both parties aren't happy with the deal then it doesn't happen and they can be as mad as they want, but neither party is any worse off for it.

The office person isn't getting paid from the $300 commission split X number of ways, they are getting paid out of the giant pot of money the dealership makes from all facets of the business and are likely salaried in that position anyway, possibly with a bonus structure for selling protection packages and insurance. Sales people are almost entirely commission based however if you've seen the quality of the average sales person, it's not hard to see why only a tiny percentage of them are actually successful. The less successful they are, the more desperate they probably get, and the more willing they probably are to use shady tactics to get a sale.

The reason people go into a dealership with a chip on their shoulder is they legitimately try to screw you and rip you off every single step of the way. Even the best dealers in the city with the best reputations still openly lie to customers to get them to buy useless things like protection packages. The only way for a customer to avoid getting screwed is to have their guard up and do their due diligence. Just as one example, instead of marking up PPF, protection packages, and undercoating 500%, why not offer those things at a fair market price and make money on volume and reputation rather than the few suckers they trick into buying it every month? There are so many simple tings they could do to improve their reputations but they aren't interested. And I know you acknowledged there is a lot to improve on, I just think it's much more on the dealer side of things than the customer's side.

IMHO the common denominator is the fact that almost every dealership is extremely shady, so obviously the customers are going to behave differently. Compare that to a different business where every customer is treated fairly and not lied to, and it's night and day. I can't think of many other businesses that literally sneak things onto your invoice and hope you don't notice, waste hours of your time lying to you over and over again, reneg on refundable deposits, lie about product history, take advantage of the vulnerable, etc. nearly to the degree that car dealerships to. It's not just a case of a few bad apples either, almost every dealership operates this way and when you find one that is pleasant to deal with it's the exception not the norm. If that weren't the case, interactions on both sides would be far more pleasant for all parties involved, in theory anyway.

Again, the dealer isn't going to sell you a car if they aren't happy with their side of the deal. Who cares if the customer is pissed that the dealer won't accept 10% below cost? Obviously that is not a price the market will bear. Most of them probably won't accept an offer like that, but neither party is harmed in any way if your offer is simply rejected. If you're looking at scenarios where dealers screw customers vs customers screwing dealers, I think you will find that it is pretty one sided. The dealers have all the tools necessary to protect themselves from anything a customer might reasonably do (i.e. trade in a car with an issue), whereas it is much harder for a customer to do the same, especially if you don't have good knowledge of the industry.

all I can say is from this 1 post, you have no idea what you're talking about. everything you've posted is assumptions and bullshit.

PPF markup is 500%? business office people do not get "salaried" off the giant pot of gold that you think the dealership dips into.

anyway, I'm not trying to change any minds here. just trying to offer a different perspective.

Disoblige
02-25-2020, 03:32 PM
all I can say is from this 1 post, you have no idea what you're talking about. everything you've posted is assumptions and bullshit.

PPF markup is 500%? business office people do not get "salaried" off the giant pot of gold that you think the dealership dips into.

anyway, I'm not trying to change any minds here. just trying to offer a different perspective.
Not everything Mitsu3000gt is false, but sometimes it's just plain bullshit unfortunately. The problem is someone reading it who might be totally uneducated might think it is mostly true because he has a way of perceiving it that way. I have no doubt he believes it though.
All dealers are SDS Baker family sleazy just like all Airpods fall out of their owner's ears often.

Mitsu3000gt
02-25-2020, 03:40 PM
all I can say is from this 1 post, you have no idea what you're talking about. everything you've posted is assumptions and bullshit.

PPF markup is 500%? business office people do not get "salaried" off the giant pot of gold that you think the dealership dips into.

anyway, I'm not trying to change any minds here. just trying to offer a different perspective.

Well, I've visited dealerships probably hundreds of times and bought or helped buy dozens of cars, and I have friends still working in the industry. That has been my experience based on the dealerships I have dealt with and the people I have talked to in the industry, YMMV. Obviously my opinions are going to be formed by my personal experience on the matter, and that doesn't make them wrong or BS just because you disagree. If you have had a different experience, I am not going to call you a liar for it.

Using Honda as an example because it's easy, they wanted $1799 for undercoating on the last deal I did with them - ~500% higher than quotes I got elsewhere. I am not just making up numbers here.

If you disagree with something I've said, why not provide something objective that shows me it's wrong instead of just saying it's assumptions and BS as if your word someone carries more weight than the next guys. If I am legitimately wrong about something I would genuinely appreciate the correction if you have something that shows it.

SOAB
02-25-2020, 04:00 PM
If you disagree with something I've said, why not provide something objective that shows me it's wrong instead of just saying it's assumptions and BS as if your word someone carries more weight than the next guys. If I am legitimately wrong about something I would genuinely appreciate the correction if you have something that shows it.

like that would change your opinion one iota?

this is coming from the guy that is a self proclaimed expert on almost everything? Oh, you're a realtor? I know more than you. a mechanic? I can fix cars better than you. You sell computers? i know more about that particular computer that i spent 100 hours researching before i came in. you want me to pay to help me get better at public speaking? fuck that! I can do it better without your help!

Disoblige
02-25-2020, 04:07 PM
If you disagree with something I've said, why not provide something objective that shows me it's wrong instead of just saying it's assumptions and BS as if your word someone carries more weight than the next guys. If I am legitimately wrong about something I would genuinely appreciate the correction if you have something that shows it.
I dunno man. Basic Googling shows most sources saying a 1-2% net margin on new car sales. Some even saying they lose money. Even if you are talking gross %, that's is 10% or less.
But that is if someone was a backseat Googler. I thought you were an expert based on you "visited dealerships probably hundreds of times and bought or helped buy dozens of cars, and have friends still working in the industry". You can't tell me you had to Google something off the internet and then assumed it was true did you???

rage2
02-25-2020, 04:17 PM
He was talking about 25% of total profits, not 25% markup on cars.At least that's what I think he was implying. I mean, if you run a shitty service department in a luxury make dealership, you could see 25% of total profits coming from new car sales but that surely never happens.

The crazy markup on 3M is pretty accurate. This is comparing what I pay at Shadow vs what I get quoted at the dealer, and the contractor the dealer uses always uses the shittiest cheapest films. The last car that I bought new with dealer installed 3M (RC-F) it was way higher than what Shadow would've charged me for a high impact area partial wrap (Showed $1500 on the invoice). It was such a shit job I had to get Renee to fix it.

ExtraSlow
02-25-2020, 04:18 PM
You know, people would not object to dealership profits if the dealership experience was better than your average root canal. I haven't "visited hundreds of dealerships" but I've bought a few cars, and helped a few friends buy theirs, and honestly, if there's open and honest dealerships out there, then I've managed to be unlucky.

I'm totally happy with them earning a profit, and selling profitable add-ons. But why make it so painful? Avoiding that pain is my main motivation for wanting to do direct sales.

SOAB
02-25-2020, 04:29 PM
trust me guys, i'm not saying there isn't room for improvement. dealerships need to change with the times or get left behind. face to face sales will never go away. I rarely even buy clothes online. no way would i ever buy a vehicle without first sitting in one and driving one.

new car sales is a tough gig and not an easy job to make a living at. our most successful sales people all have repeat customers. how is that possible if they rip every single one off?

people that come in with a chip on their shoulder, give off a terrible attitude get treated as such and then they tell their friends how they were rudely ignored or were given attitude at the dealer.

You ever read a bad review about a business online, only to find out that the customer was a giant dick and would never have been satisfied with any outcome?

I had one customer get pissed at me because he lost his wheel lock key and I couldn't tell him which one of the 50 different options was on his car... like i was the one that stole his wheel lock key and caused him this giant inconvenience.

ExtraSlow
02-25-2020, 04:34 PM
new car sales is a tough gig and not an easy job to make a living at. Now that's something I can agree with!

rage2
02-25-2020, 04:38 PM
I still think that we're the exception. The car dealership model works for the majority of car purchasers to maximize profits for the dealership. We know better, so it's a pain in the ass navigating their sales methodology. For these average consumers, I don't know if direct to sales will save them any money, even Tesla is still putting together subprime loans to bury upside down trade-ins and profiting from it. In the US they're giving pretty uncompetitive trade in values to add even more to the bottom line. Not sure how it is in Canada. benyl how was your trade in value?

Disoblige
02-25-2020, 04:39 PM
I still think that we're the exception. The car dealership model works for the majority of car purchasers to maximize profits for the dealership. We know better, so it's a pain in the ass navigating their sales methodology.
Does dj_rice know better though? He even works for a dealership...

Jokes... I'm sure he's learned now lol..

SOAB
02-25-2020, 05:12 PM
He was talking about 25% of total profits, not 25% markup on cars.At least that's what I think he was implying. I mean, if you run a shitty service department in a luxury make dealership, you could see 25% of total profits coming from new car sales but that surely never happens.



I think the term should be revenue. 25% of the dealers total revenue is from new car sales but there is no way the new car department is making even close to break-even in this current market.

Mitsu3000gt
02-25-2020, 05:48 PM
like that would change your opinion one iota?

this is coming from the guy that is a self proclaimed expert on almost everything? Oh, you're a realtor? I know more than you. a mechanic? I can fix cars better than you. You sell computers? i know more about that particular computer that i spent 100 hours researching before i came in. you want me to pay to help me get better at public speaking? fuck that! I can do it better without your help!

Lol what? I challenge you to find a single quote where I outright proclaim myself to be an expert on something, anything, at all. Those are your words, not mine. If someone is making that inference based on something I post, that is out of my control as I have never claimed to be an expert on anything. If you are going to make an accusation like that, you should at least have the decency to quote me saying that otherwise you are a hypocrite, especially on the heels of accusing me of saying things that aren't true. In fact, my most commonly used word on beyond is probably "IMO" or "IMHO" to let people know I am not trying to represent something as universal fact, but rather am speaking from personal experience which may or may not match the next persons'. If someone asks for input on something and I reply, it is to the best of my knowledge, same as anyone else who replies. Nothing is ever intentionally wrong or deceptive.

Absolutely it would change my opinion - if someone can show me objective evidence that is different than what I believe to be true, I 100% would accept that. It happens all the time, that's how I learn.

rage2 seems to agree with me on PPF markup - I don't see you calling him out :rofl: And the undercoating markup was pretty well exactly 500%. Since you specifically called me out on that, what do you have to say about that now?

Have you ever thought that I might actually be telling the truth, at least to the best of my knowledge and based on my experiences? It's not such a crazy thought that two people might have different exposure and therefore information - you don't see me calling them liars. I have never intentionally lied or provided knowingly false information on Beyond in my entire time on here. If I am wrong about something and someone can show me objectively so (which certainly does happen), you will see that my response is almost always a thank-you. Ask yourself what I have to gain by making something up - it would be a waste of everyone's time including my own.



I dunno man. Basic Googling shows most sources saying a 1-2% net margin on new car sales. Some even saying they lose money. Even if you are talking gross %, that's is 10% or less.
But that is if someone was a backseat Googler. I thought you were an expert based on you "visited dealerships probably hundreds of times and bought or helped buy dozens of cars, and have friends still working in the industry". You can't tell me you had to Google something off the internet and then assumed it was true did you???

Rage basically described what I was getting at above - if I was unclear about something then I apologize. As I mentioned earlier, my number was from the NADA and I also asked you to provide a different source if you had a better one, otherwise what you're saying carries no more weight than what I am saying. If I'm wrong then I will own it, but show me something that proves it - don't just tell me I'm making stuff up. A interesting pattern I notice is that everyone who regularly calls me out on here never seems to be able to provide anything material that shows I might be wrong, they just think their opinion is somehow more valuable despite not knowing any details of how I came to that conclusion. I also notice that when I get called out for something, other people who post the exact same thing never take any flak, which tells me most of what I need to know. I understand that I am opinionated and I don't expect everyone to agree with me, but that doesn't make me dishonest - every single post I make with information in it is a genuine attempt to help, not deceive.

benyl
02-25-2020, 07:59 PM
I still think that we're the exception. The car dealership model works for the majority of car purchasers to maximize profits for the dealership. We know better, so it's a pain in the ass navigating their sales methodology. For these average consumers, I don't know if direct to sales will save them any money, even Tesla is still putting together subprime loans to bury upside down trade-ins and profiting from it. In the US they're giving pretty uncompetitive trade in values to add even more to the bottom line. Not sure how it is in Canada. benyl how was your trade in value?

Tesla offers auction values. I was right side up on my expedition, so I took it because it was easy. I’m sure I could have gotten more money selling privately, but it was easier to just trade it. Most people don’t do it with Tesla.

Rocket1k78
02-26-2020, 03:38 PM
Not everything Mitsu3000gt is false, but sometimes it's just plain bullshit unfortunately. The problem is someone reading it who might be totally uneducated might think it is mostly true because he has a way of perceiving it that way. I have no doubt he believes it though.
All dealers are SDS Baker family sleazy just like all Airpods fall out of their owner's ears often.
:rofl::rofl: 100% he believes the shit he spews. The airpods will be a classic though


this is coming from the guy that is a self proclaimed expert on almost everything? Oh, you're a realtor? I know more than you. a mechanic? I can fix cars better than you. You sell computers? i know more about that particular computer that i spent 100 hours researching before i came in. you want me to pay to help me get better at public speaking? fuck that! I can do it better without your help!
You're wasting your breath bro, theres no talking sense to this guy sometimes.
Check out my sig lol, i got into it with him because he said all reno guys were snakes from his experience at his condo. The management company gives the board members a small list of companies to choose from, the board makes the decision of who to hire to which he says himself "most wanted it done quick and didnt care about quality" but in another sentence he goes and says they made a better decision as a whole:rofl:

C4S
02-26-2020, 04:03 PM
I am consumer too, my last few vehicles, are from dealership, not the best value, but peace of mind, and for may be just few thousand dollar difference, I prefer to do that way ...

But when I was young, in the 20's I will run around just to save couple thousand dollar, or even couple hundred dollar, now in the 40's with 2 kids, rather save more time with family.

Same as buying watches etc, (new or pre-owned) private deal may save few hundred buck, but peace of mind to buy from store with good reputation...

I guess .. I am old .. :eek::eek:

ExtraSlow
02-28-2020, 07:55 PM
Colorado passed a law that I guess is some attempt at "balance" on this issue :
https://jalopnik.com/colorado-passed-a-dealership-bill-designed-entirely-for-1841976108
Telsa and Rivan can sell direct, but nobody else.

benyl
02-28-2020, 08:00 PM
:rofl::rofl: 100% he believes the shit he spews. The airpods will be a classic though


:rofl::rofl::rofl::rofl::rofl:

snowcat
02-29-2020, 03:23 AM
This thread is so messy. I’ve done so much contract work for power sports / automotive and there is so much mis information in this thread. Why do some of you post crap as it is fact because “you have experience from buddies” or something? Weird.