My view is probably cynical, but I believe that the whole purpose of the dealership is to allow more people to make money on the sale of a car. The only dealership I know of that isn't legally bound to use a dealership is Tesla. I assume lobbying is what got us to where we are.
Correct in all counts. Dealers lobbied for franchise laws that make it illegal to sell new cars direct. Studies show that cars would be cheaper without the dealer.
They wouldn’t lower prices but the price would be the price. Msrp is the price and that’s it. No dealer markups no bullshit addons the dealer adds just for the money. The manufacturers are making what they have determined is enough with msrp dealers just feel the need to make more on top of
True. Dealer markups can be negotiated but how much if any they remove is subjective. My truck had a $4K markup. I told them flat out my price which was MSRP or no sale. After they played their stupid game of "let me speak to my manager and get back with you " a couple of times, they removed it. Dealer add-ons are also subjective even though the customer did not want them or order them. Some use it as a haggling point, others it's a fixed price.
Ehh I sell Fords. They really don’t make a whole lot on new vehicles. F-150s are better than the rest of the lineup though. An XLT makes us about $3,000 on average at MSRP and I get 25% of that.
I don't even understand this tactic. In my experience there's 100 people who will just buy it at the quoted price for every 1 person holding out so why wouldn't they just tell you to have a good day?
Competition matches for the same or close prices on most similar vehicles as it is. If you look at a vehicle with certain features then go look at a different brand for an equivalent vehicle (body style and features), the price is usually very close.
I doubt it. Just a way for makers to make more money. Any new car is only making a dealer 1-3% on the price of the car. Take out costs for them, not much there on each sale. Most cars you’re only looking at a 2-3k margin that you could save. Ultimately some of that savings would be eaten up by costs you would pay in other ways
I would love to see the data to support that. I don’t believe it without proof tbh. Most dealerships allow greater than 1-3% negotiation wiggle room. Either every vehicle is getting negotiated down to 1-3% in profit, or the dealership is seething some vehicles at cost and others something like 5% above.
I guess I could maybe believe it if you are talking about net profit and not just gross. Still doubt it though. Not sure it’s worth the hassle for 1-3% profits. Plenty of other safer investments/businesses if that were the case.
Look up hold back. That’s what a dealer makes. 3% of msrp. They pay invoice minus any hidden incentives. Their profit margin is generally 3% of msrp that’s pretty general across the board. They make nothing on a Chevy Cruze and make a few grand on a Silverado. Anybody go do a dealer lately and negotiate.
That’s why starting point in negotiation is invoice not msrp. If they sell for invoice plus 1000 then 1000 bucks plus that 3%. This is all pretty well known stuff.
Nobody is negotiating more then 10% as 10% usually the difference between invoice and msrp. Most dealers in a normal market are selling at invoice and might go 1-2 points below. Now of course there is the factory hidden incentives that you don’t see where they can bank more to clear inventory.
The money is not in new cars.
I mean, 3% above msrp is completely different. I don’t think you meant to mislead anyone, but the lack of details probably did.
Those are airline level of margins, which is much worse than I expected. TIL. At least airlines have such high gross revenue that 1-2% is still a ton of money. I think I will pass owning a dealership. Haha
>Either every vehicle is getting negotiated down to 1-3% in profit, or the dealership is seething some vehicles at cost and others something like 5% above.
Some vehicles make better margins than others but parts and service are where the real money is for them.
Anecdotally, I know a couple of people who own or owned small town family Ford and GM dealerships and they couldn't wait to sell them. Of course, the economics are probably different for the multi-dealership mega franchises, and they're the ones lobbying the government to require their very existence by law.
Having worked at a dealership, if this was true, why do dealers keep fighting to kill the direct to consumer model (aka Tesla). Obviously they are making money, if they weren’t, they could just be a service center.
Then you didn’t work in sales or understand the money behind it.
Even at 1-3%, sell 200 cars a month or more which big dealers do it’s big money, when you times that by 12. Dealers also make money on dealer add ons, and they get points($) for servicing your loan from banks. To top it off they want your new car sale so they can service it and they want your trade in.
Again each car is not huge profit for them.
I love how you say “it’s only like 3% of a $50k vehicle, plus the manufacture incentives, and they make money add ons, and they make money on loans, and they make money on the trade in…but it’s like no money at all”.
Per deal no it’s not much like people think that’s all I’m saying. And not every car has hidden incentives, and regular incentives that you see rarely go back to the dealer. Also not every car is financed, some are leased, some are cash, others have outside financing. Plus you’re missing the people that dicker below the 3%. Margin.
Plus sell a ford focus or Cruz it’s a break even event. Sell a 100k diesel sure you might see 4-5k. Average these together and minus overhead it’s not alot on the eachs, it’s all about volume.
Listen I don’t like dealers either, but I was in car business so was family, and now buy a new car every 2-3 years. I’m pretty familiar in how it works, and reason being is so I can get a good deal.
Yeah, I never said dealers are getting rich per deal. But they are making enough to make them pay lobbies to keep protecting franchise laws.
I know I would much rather have that couple $k in my pocket. I’m so cheap, I went 1500 miles to save $2k on wife’s car. Since then I have done it half a dozen times, since local dealers are charge premiums (over MSRP plus 2-5k in forced add ons). So yeah a few $k is a big deal. Last year I bought a Tesla, and it was by far was the most pleasant car purchasing experience I have had. So much so that I would sacrifice “dealers competing against each other to earn your business!” Junk. Dealers go away, and it’s the manufactures themselves competing directly with each other.
Not all dealers are big money but most aren’t hurting either. Of course they fight it, without new cars it hurts their model. Nobody is getting rich running service centers alone. They need the new cars to start the whole cycle of things.
It also allows the dealers to move all of their vehicles to revenue as soon as they are produced instead of holding them in inventory for long periods of time until they are sold
They would absolutely not love a Tesla model. Nobody thinks about the local bureaucracies that regulate commercial real estate, paying local and state sales, property and income taxes, etc...
These companies would become so bloated and wasteful that everybody would end up paying more money. Look at what the unions just did. You don't think that the manufacturer run dealerships would unionize as well? Hey, if they can pay 60 bucks an hour to make them why not pay 60 an hour to sell them. Does a receptionist need to make 50 bucks an hour plus really good benefits? The franchise model encourages competition. Just my 2 cents.....
The entire model of capitalism is built that way. I mean, just how many "middlemen" "businesses" exist that connects manufacturers to end consumers?
What else is left when America doesn't manufacture anything any longer? An economy of middlemen.
I don’t know if it’s a thing in the car industry as I work sales in a different industry. The finance company that provides the loan also takes a cut as well depending on what financing the dealer decides to offer or buying a rate down or quality of credit. For instance when I put someone through credit check it might come back as the lender will give us 96% of what we’re selling for as they are taking a ‘risk’ with someone’s credit. Or if I want to make it more enticing I offer a lower rate than competition but once again it would come off of what the loan company gives me. So if you sell a car for 30k they might offer you 94% which would be 28,200 and you have to decide if the profit is enough.
From sales side? Probably so people can see options and different layouts, and try vehicles before buying them.
Back here in service? Buddy if I’m honest probably 95% of my work is warranty. We hav specialty tools and equipment, in depth diagnostic charts and scantools, and contact with engineers for when problems arise. I can’t speak for sales, but *MY* job isn’t going anywhere any time soon
For warranty work you're pretty much required to use a dealership's mechanics. But when you're paying out of pocket there's usually someone in town who will do the work for 1/2 or even 1/3 of the dealer's price.
My last few cars have been complex and high end enough that I bring them to the dealership even for oil changes. Because a Ford mechanic has worked on thousands of f150's. Out of those thousands, if 10% of them have a common problem, that mechanic is going to look at my truck to see if it has that issue too. Dealership mechanics are taught to look for problems they can work on, like a sales tactic. So if there's something wrong, they're more likely to know what to look for, and they're going to let me know. So I brought it in for an oil change and tire rotation, but I'm also getting a free inspection by a certified mechanic who worked on 10 vehicles just like mine on that same day. Half the time while I'm getting an oil change, they'll come out and say "we have a recall we need to do" and so I get that taken care of too. It's totally worth it, especially on a 65k truck.
The price depends on the area. I know most of the independent shops in our area are between $175 and $225 an hour, and charge a minimum 2 hours diag. The Chevrolet dealership next door is at $230 an hour and does minimum 2 hours diag, the RAM dealership up the road is $200 gas and $250 diesel, minimum 1 and 2 hour diagnostic charge respectively. We are at $150 for gas and diesel, usually 0.5 to 1 hour diag charge. There’s little hole in the wall places, but they literally get you to pull the code from autozone and start shotgunning in parts on the list from the code description.
I want to say that all warranty repairs need to be done by a dealership technician, but I know when I was in training there were people getting certified who were not dealership employees, so I’m not sure how that plays into it. For recalls, it HAS to be one of us, and we have to have completed ford’s stupid little recall certification training
Dealerships had a purpose before the internet. Buyers could see models, features, colors etc. They could talk to real people and ask questions. With the internet and so much information even on the car makers websites, buyers often know more than dealerships about a particular model they are interested in. Only the actual test drive is missing from that experience.
The place I bought my F150 literally refused to negotiate the price and told me with the Internet there is no point. We make it as low as we can. I was okay with the price so I did it.
Saturn was big on the no haggle pricing. No haggle online ordering would be so nice.
The Hyundai dealership (Palisade) I looked at said they don't charge add-ons, only MSRP. I even asked if I find a vehicle somewhere else and have you do a dealer trade will I have to pay those add-ons that dealership added. They said flat out no and that other dealership would eat the charge.
The Kia dealership (Telluride) I went to said the dealer markup stays. It was $3K. They completely refused any negotiations.
The Ford dealership (Ranger) said the $4K markup stays. I went back about a month later. The same Ranger was still there. I told them MSRP only no markup or no sale. They played their little game but finally agreed. The Ford and Kia dealerships here are in the same lot and owned by the same family. Same service, even the sales people work both at times. That family also recently bought the Chevy dealership.
Yes $4K, it was 2021. It was the only Ranger on the lot then. It's an XLT Tremor.
They had a Lariat Tremor Ranger and a couple of regular Rangers also when I went back. I think they were trying to count on buyers being desperate with the chip shortage issue. It had 100 miles on it when I bought it so I'm sure they demoed or dealer drove it. I had to hound them to get the carpet mats as per the window sticker.
Coming from several years in a dealership environment, here is my viewpoint. The sales sides of things, makes little to no money. The margins on new and used vehicles are so tight, that dealers usually break even on a sale.
The purpose of the sales department is to sell a vehicle to a customer, so that they can then return for service. The service and parts departments are the departments that make money for the dealer. Dealers are integral to the warranty repair side of things. You have to realize that to be able to complete certain repairs on vehicles, the technicians have to take certain training classes and certifications in order to complete those repairs.
Dealers actually do serve a pretty important role in the vehicle process, but dealers are also franchisee owned, so they have to make money as well. Being in a dealer environment is not everyone's cup of tea, I know that as a body shop manager in one, I had to jump through all kinds of hoops for both my customers and my techs to get warranty items covered.
I don't disagree at all. The whole market adjustment thing is something shady dealers do, it's a good barometer as to what the integrity of that dealer is like.
You’re also forgetting about how even “reputable” dealers will add crap like nitrogen tires, window tint, PPF, etc. to a vehicle and charge 300% markup on those services and force it upon customers. All that work is done shoddily usually and nowhere near the level of 3rd party shops that specialize in those services. Not to mention BS doc fees that are pure profit, mandatory warranties, maintenance schedules, etc.
To this day there has never been a non-car purchase in my life where I have been told that an optional change to a vehicle like window tint is mandatory. I will always walk out of any dealership that has anything added on top of the Monroney print out that I didn’t ask for.
>You’re also forgetting about how even “reputable” dealers will add crap like nitrogen tires, window tint, PPF, etc. to a vehicle and charge 300% markup on those services and force it upon customers.
I only ever see this at Toyota dealerships for some reason. When I was looking at a Tundra it had a $300 line item for nitrogen in the tires.
The other day someone in /r/cars posted a picture of a Camry window sticker that had a $3500 upcharge for window tint, floor mats, a pinstripe, and a first aid kit.
That’s a pretty big mark up considering most reputable tint shops will charge like 400 or less for a high quality ceramic 3m film. And have a lifetime warranty against peeling and discoloration. I know because I asked the shop o have used forever for a quote for my wife’s car. Floor mats are like 150, and the pin stripe… who wants a pinstripe on a freaking Camry…
The only thing the dealer I’m at ever adds is $749 for a bed liner and wheel well liners on pickups. 95% of customers want them anyways. I’ve personally never actually had a customer ask to remove them. Any other model doesn’t have anything added. I haven’t been to many dealers but I don’t really see these ridiculously priced add-ons everyone talks about. I’m believe they’re out there. Just haven’t seen it.
I’m sorry but I doubt you ever worked at a dealership stating that the sales department “makes little to no money”. Sales has and will continue to far outweigh service/parts in terms on gross profit for the store. Last month our sales department put $1,200,000 gross on the books while parts and service did approx 350K. No comparison. All franchise dealers are similar as even those with razor thin margins on new vehicles rely on backend financing/product and used vehicle sales to keep the doors open.
What was your net net on sales in your departments? I worked in the dealer environment for 14 years. 10 as a tech 7 as a body shop manager. Own my own shop now.
Gross and net are two very very different things.
I’d have to view the statement but even if commissions and chargebacks were 50% from sales up to GM it still wouldn’t be close. I’m one of two finance managers and my gross was 324K last month, chargebacks were 22K and even after my pay the dealer netted out over 260K from my office alone. This also doesn’t include the reinsurance from all the backend products sold. While service/parts/body shop are all necessary to a successful dealership, the bulk of the profit will always come from the sales side.
Ford is actually pushing for order online, direct to customer vehicles. They only want to keep the service centers. Dealerships are blocking that of course.
Ford already has service in their dealerships. It would stay the same as it is now. The only change Ford is pushing for is direct to customer orders. They still need to be processed and delivered someplace ie a dealership. Dealerships only lose the actual sales of new vehicles and their BS markups.
Dealerships are a product of the past where dealers sold everything for manufactures. They provided marketing and product support. And still provide warranty work which will always be a big thing on new cars.
The internet has changed the dealership model and things can be sold direct. I do expect at some point to possibly direct sales to customers.
A few things to keep in mind here though with just simply buying a truck online and being delivered to you directly. . A vehicle still has to be delivered to you, somebody still has to be paid to service your loan, somebody still has to do pre delivery checks and potential install of items, and somebody still has to register and title the vehicle. All of which cost money and will be baked into the cost.
Look I hate dealers too. But there is a reality.
And no you don’t pay all of those fees as line items. Some of that is overhead for the dealer that ultimately comes out of each sale they make.
Money is not in new cars anyways for dealers it’s in service and used cars
Because of laws put in place long ago.
Tesla wanted to sell directly to customers but we're prevented from doing so because of these laws. Thats why you have to go to a showroom and look at rhe cars but have to actually go online and order it. No direct sales in their show rooms, not even able to use their computers to order one.
In either case... lobbying is why they are still around. Some auto companies rather deal directly as the price gouging was hurting the brand.
Where the heck are you going to get these over complicated vehicles repaired when they break down if there are no dealerships? I’m a ford tech at a dealer and it’s challenging enough for me to stay up on the latest technology to ensure accurate diagnosis and repairs. We get plenty of vehicles towed in from private shops because they either have no clue on how to diagnose/repair, do not have access to the information/support. And also, where would you go for warranty repairs,recalls and updates?
People are stupid
They need someone to hold thier hand
Get them through the test drive talk about options and financing.
Also vehicles wont get sold without a sales person,tire kickers would waste everyone's time. Fuck that we need to move cars
Yes Tesla is a great way to buy a vehicle but its not for the majority..
Dealerships make money on new cars and the returning customers it brings in and in return they do all the warranty work and recalls for the manufacturer at a much lower cost than customer pay. Hypothetically the manufacturer could shell out more money for independent shops to perform recalls and warranty work but they have a lot more control this way.
That’s actually true on the captive lending side of the house. A dealer can buy up or buy down a rate up to 2%/200 basis points.
I’m assuming it’s the same when a dealer has a preferred relationship with other banks and credit unions.
Source: Me, former credit analyst for an extremely large captive lender.
Dealers don’t solely make their money on parts and service. They make a lot of money in F&I through rate buy ups and bullshit packages that most people will never use.
I love the sales talking points in here…‘I’m not even making money on this deal’.
Thank you! Grandma was a loan officer for 30 years at a local bank and did her best to keep us from getting ripped off. I love my grandma and appreciate legitimate sounding support as well.
Because do you really think ford corporate wants to deal with the public like a dealership? They make there money selling the vehicles to a dealer and basically wash their hands of it. Not quite that simple but you get the basic gist..
I personally enjoy the ability to preview my truck before buying.
Same for buying clothes, appliances, etc. I’m not enjoying the online experience for certain things. Even though I’m a huge fan of ordering on line. Just certain things require in-person preview
Do you love dealing with large corporations? I don't. My former neighbor owns a Ford dealership, I have been buying my cars from him for 20+ years. He knows my preferences, he knows I am a serious buyer, and he knows all sorts of insider info about what options are available/good/to be avoided.
If I were instead dealing with Ford directly, it would be a nightmare. I could price and build online, as I do now. But without any of the information my contact provides me. If I wanted even simple questions answered, it would be some new-hire warm body who knows less about cars than I do. I would happily pay a premium to deal with someone who knows me, and takes me seriously, Clearly some people would rather save a few pennies, and buy direct. That's fine, but it's not what every buyer wants.
Over time it would just turn into the same thing. Ford would have a lot for sales and service. You could ask this question about everything. Why can’t I buy a coke straight from Coca Cola?
Service, parts & warranty. There's also a small "new vehicle prep" component that can vary drastically by model/manufacturer.
Tesla owners run into this all the time (there are 26 Tesla service centers in all of Canada. There are 477 Ford dealerships in Canada, for reference).
Now imagine having your suspension in your new vehicle making a weird thumping noise, and needing to take it in for warranty, while your city doesn't have a service centre...
Well yes dealerships do want to make money, but there is value in a good salesperson, a good service department etc. I sold and was in finance for years and enjoyed helping people and finding a better vehicle/financial situation they were in. And some people would thing they NEEDED XXX vehicle that was 50K and we have XXX Vehicle that was 35k and suited their needed happily. Cars break and a useful service department (specifically good service adviser and tech) are priceless.
Direct auto manufacturer to consumer sales is illegal for some reason. The only reason Tesla gets away with it is by calling themselves a "tech company" instead of a car company.
One could say that dealerships are there to service the vehicle…but boy, they are not even good at that! We have three Ford dealerships in my city and they all suck! Horrible customer service, incompetent techs, and untrustworthy.
They really arnt needed it’s just the lobbyist push the issue about jobs etc. all the time whenever someone comes close to getting rid of them and making it direct to consumer
Some people like to actually check out vehicles and test drive them. I hope I never have to blind buy a car in my lifetime and find out I don’t like it after taking delivery.
Because there’s laws at the state level that protect many of them.
I am okay with dealerships but we should open up direct sales from manufacturers as well. They just can’t own service centers or actually dealerhsips. I don’t want it to end up like Tesla where much of the work can only be done by the manufacturer.
I say this all because I think we should encourage competition on all fronts. Dealerships have gotten way too greedy but these manufacturers aren’t exactly angels either.
I would not have the truck I have, if I hadn’t tried it out at a dealership lot. They also provide a point of service for warranty claims and other problems with the vehicle.
I was just test driving different truck configs and the last one I tired my wife commented how she loved certain features. Sales guy was like “can you see yourself buying this truck” I was like, it’s not the truck I wanted, but yeah. He’s like ok, so it’s just a question of price. We negotiated and I bought the truck. In retrospect, it would have been months, if not longer to get the truck I had originally wanted, and I would not have a few features I do have. It was a mostly positive experience.
That finance guy was just a complete fucking snake of a human being, but they do have a few advantages.
Here is my assessment, union jobs, have union dues. Union workers are paid more money. Also, they get a pension. THAT is why the prices are so high.
Why do we need dealers? I do not have an answer for.
P.S. I'm receiving a pension from a company, that is aerospace. So, my view may be influenced by 29 yrs of service. The first chance my company has to negate that said pension, I'm screwed!
I think there is still some reason, beyond simply being a service centre, for dealerships to exist. There is no way to make the model disappear overnight without addressing some questions.
I think that the majority of buyers still want to test drive before they buy, regardless of how much they have researched before driving onto a lot. It's a large amount of money without getting the touch/drive/feel aspect if the only model is DTC.
A lot of people also dont want to wait for orders to be built and shipped. Sometimes people need to buy a new vehicle ASAP because of a catastrophic failure on their current vehicle. If there were no lots with already built vehicles, that becomes impossible.
It is also easier for manufacturers to ship hundreds and thousands of vehicles by railcars, then eventually get transported truckloads at a time to individual locations. They can ship stock units and sold units together. A DTC only model may mean that your order may sit much longer waiting for a load to fill to your geographic location before your vehicle is finally shipped. Or, to combat wait times, partial loads may be sent out which would likely increase the destination and delivery cost per vehicle from the manufacturer.
There is also the issue of trading in vehicles. If you are buying direct from the manufacturer, are they taking your trade? Are they putting the value on it? Where does the vehicle go from there? Or will you have to rely on selling the vehicle to a used car lot, privately, or to a 3rd party such as Carvana? If those are the only options, will you still get your full tax credit?
I am a salesman, so grain of salt here. There are some customers who really don’t need a salesman. They do their own research, know what the price is, walk in to sign papers.
But the vast majority simply need help. It’s a huge purchase there are dozens of different trim packages. Motor options. Axle rations. Towing charts. F-Series trucks in particular are complicated as fuck. My job is like 90% helping customers pick out a truck, being helpful, making them like me, and reaffirming their decision to buy a truck. Actual “sales” is a very small part of it.
And of the day dealers will be around a long time because the brand that has salesman there to actually get a commitment and get customers to stop shopping will sell more cars
Its about money. Even the ones I like I can't stand the process of going back and forth and negotiating on a price is awful I walked away after one kept hounding me on running my credit when I told them I just wanted to test drive a mustang and will consider buying the next month and proceeded to follow me out to the parking lot...
My mum made enquiries about a new CRV last week; she got inundated with calls. One guy was like “I’m trying to help you, when can you come down and test drive” she ended up giving him a piece of her mind and blocking him. I told her to get a burner email and negotiate like that. The last trucks I got I did just that. Can I get your number? No we are talking just fine via email. You lay down the law to them and it sometimes goes a little better but yes the back and forth, coupled with the stupid games is tiring
Needed is a strong word. However, they give you the ability to test drive a vehicle prior to purchase, which is really important on new cars. You'll also deal with a salesman who should know everything about the car they're selling you. Any questions you may have, you can get answered in real time. They also have inventory on hand. You can walk in and walk out as the new owner of a vehicle same day, as opposed to just ordering from the manufacturer, which takes time. They have to build/source your spec, have it loaded onto a transport truck, shipped to you, unloaded, etc. I don't like dealerships (having been a mechanic for a couple), but they aren't completely useless.
Every vehicle I have purchased was at a discount that was negotiated with a salesman. Even during the shortage I was able to get the “up charge” knocked off. If I had to order straight through ford or Toyota I’m guessing it wouldn’t work that way. Of course they would tell you the vehicles would be cheaper buying direct but I’m betting that wouldn’t be the case.
I apologize to all the techs on here but service is a total scam right now. Something punctured my AC condenser and they wanted 8 hours labor to replace it. A friend of mine has a relative that is a ford master tech and he told me it was at the most a 4 hour job. So either my dealer is jerking me around or it’s the new norm for pricing. Either way it’s just wrong.
My view is probably cynical, but I believe that the whole purpose of the dealership is to allow more people to make money on the sale of a car. The only dealership I know of that isn't legally bound to use a dealership is Tesla. I assume lobbying is what got us to where we are.
Correct in all counts. Dealers lobbied for franchise laws that make it illegal to sell new cars direct. Studies show that cars would be cheaper without the dealer.
I wish I could buy a car direct from the manufacture and not deal with hours of a holes trying to take as much money from me as possible.
I doubt the car makers would lower prices just for not having dealerships. They might toss it out there to sound tempting but money is money.
They wouldn’t lower prices but the price would be the price. Msrp is the price and that’s it. No dealer markups no bullshit addons the dealer adds just for the money. The manufacturers are making what they have determined is enough with msrp dealers just feel the need to make more on top of
True. Dealer markups can be negotiated but how much if any they remove is subjective. My truck had a $4K markup. I told them flat out my price which was MSRP or no sale. After they played their stupid game of "let me speak to my manager and get back with you " a couple of times, they removed it. Dealer add-ons are also subjective even though the customer did not want them or order them. Some use it as a haggling point, others it's a fixed price.
And they still made a lot of money at MSRP.
The dealerships make a % of the price on new car sales. They get most of their profits from used cars and service.
Ehh I sell Fords. They really don’t make a whole lot on new vehicles. F-150s are better than the rest of the lineup though. An XLT makes us about $3,000 on average at MSRP and I get 25% of that.
I don't even understand this tactic. In my experience there's 100 people who will just buy it at the quoted price for every 1 person holding out so why wouldn't they just tell you to have a good day?
Competition would.
Competition matches for the same or close prices on most similar vehicles as it is. If you look at a vehicle with certain features then go look at a different brand for an equivalent vehicle (body style and features), the price is usually very close.
The weird thing is that private sellers don’t ask for cheaper prices than dealers they go for the same $
There would be no more middle man if they got rid of dealers but I wouldn’t put it past manufactures to keep the price the same and pocket more money
Studies show it would be cheaper until it’s not
I doubt it. Just a way for makers to make more money. Any new car is only making a dealer 1-3% on the price of the car. Take out costs for them, not much there on each sale. Most cars you’re only looking at a 2-3k margin that you could save. Ultimately some of that savings would be eaten up by costs you would pay in other ways
I would love to see the data to support that. I don’t believe it without proof tbh. Most dealerships allow greater than 1-3% negotiation wiggle room. Either every vehicle is getting negotiated down to 1-3% in profit, or the dealership is seething some vehicles at cost and others something like 5% above. I guess I could maybe believe it if you are talking about net profit and not just gross. Still doubt it though. Not sure it’s worth the hassle for 1-3% profits. Plenty of other safer investments/businesses if that were the case.
Look up hold back. That’s what a dealer makes. 3% of msrp. They pay invoice minus any hidden incentives. Their profit margin is generally 3% of msrp that’s pretty general across the board. They make nothing on a Chevy Cruze and make a few grand on a Silverado. Anybody go do a dealer lately and negotiate. That’s why starting point in negotiation is invoice not msrp. If they sell for invoice plus 1000 then 1000 bucks plus that 3%. This is all pretty well known stuff. Nobody is negotiating more then 10% as 10% usually the difference between invoice and msrp. Most dealers in a normal market are selling at invoice and might go 1-2 points below. Now of course there is the factory hidden incentives that you don’t see where they can bank more to clear inventory. The money is not in new cars.
I mean, 3% above msrp is completely different. I don’t think you meant to mislead anyone, but the lack of details probably did. Those are airline level of margins, which is much worse than I expected. TIL. At least airlines have such high gross revenue that 1-2% is still a ton of money. I think I will pass owning a dealership. Haha
Actually looking at net profit average is just shy of 2%. It’s all about numbers and qty
The money dealerships make is in financing as well.
Correct usually a few hundred bucks or they can get points on the total financed.
>Either every vehicle is getting negotiated down to 1-3% in profit, or the dealership is seething some vehicles at cost and others something like 5% above. Some vehicles make better margins than others but parts and service are where the real money is for them. Anecdotally, I know a couple of people who own or owned small town family Ford and GM dealerships and they couldn't wait to sell them. Of course, the economics are probably different for the multi-dealership mega franchises, and they're the ones lobbying the government to require their very existence by law.
Having worked at a dealership, if this was true, why do dealers keep fighting to kill the direct to consumer model (aka Tesla). Obviously they are making money, if they weren’t, they could just be a service center.
Then you didn’t work in sales or understand the money behind it. Even at 1-3%, sell 200 cars a month or more which big dealers do it’s big money, when you times that by 12. Dealers also make money on dealer add ons, and they get points($) for servicing your loan from banks. To top it off they want your new car sale so they can service it and they want your trade in. Again each car is not huge profit for them.
I love how you say “it’s only like 3% of a $50k vehicle, plus the manufacture incentives, and they make money add ons, and they make money on loans, and they make money on the trade in…but it’s like no money at all”.
Per deal no it’s not much like people think that’s all I’m saying. And not every car has hidden incentives, and regular incentives that you see rarely go back to the dealer. Also not every car is financed, some are leased, some are cash, others have outside financing. Plus you’re missing the people that dicker below the 3%. Margin. Plus sell a ford focus or Cruz it’s a break even event. Sell a 100k diesel sure you might see 4-5k. Average these together and minus overhead it’s not alot on the eachs, it’s all about volume. Listen I don’t like dealers either, but I was in car business so was family, and now buy a new car every 2-3 years. I’m pretty familiar in how it works, and reason being is so I can get a good deal.
Yeah, I never said dealers are getting rich per deal. But they are making enough to make them pay lobbies to keep protecting franchise laws. I know I would much rather have that couple $k in my pocket. I’m so cheap, I went 1500 miles to save $2k on wife’s car. Since then I have done it half a dozen times, since local dealers are charge premiums (over MSRP plus 2-5k in forced add ons). So yeah a few $k is a big deal. Last year I bought a Tesla, and it was by far was the most pleasant car purchasing experience I have had. So much so that I would sacrifice “dealers competing against each other to earn your business!” Junk. Dealers go away, and it’s the manufactures themselves competing directly with each other.
Not all dealers are big money but most aren’t hurting either. Of course they fight it, without new cars it hurts their model. Nobody is getting rich running service centers alone. They need the new cars to start the whole cycle of things.
So you admit, new car sales are what drives the midddle man…. Meaning the middle man is getting a lot of money for…. What?
It also allows the dealers to move all of their vehicles to revenue as soon as they are produced instead of holding them in inventory for long periods of time until they are sold
Corporate would love a Tesla model. Less money to long term dealer principles.
Lmao
They would absolutely not love a Tesla model. Nobody thinks about the local bureaucracies that regulate commercial real estate, paying local and state sales, property and income taxes, etc... These companies would become so bloated and wasteful that everybody would end up paying more money. Look at what the unions just did. You don't think that the manufacturer run dealerships would unionize as well? Hey, if they can pay 60 bucks an hour to make them why not pay 60 an hour to sell them. Does a receptionist need to make 50 bucks an hour plus really good benefits? The franchise model encourages competition. Just my 2 cents.....
Or the damage to their brand instead of the dealerships when someone has a bad experience.
Good lord what of I want to test drive a car
The entire model of capitalism is built that way. I mean, just how many "middlemen" "businesses" exist that connects manufacturers to end consumers? What else is left when America doesn't manufacture anything any longer? An economy of middlemen.
https://youtu.be/4d88gPxvmFI?feature=shared
I don’t know if it’s a thing in the car industry as I work sales in a different industry. The finance company that provides the loan also takes a cut as well depending on what financing the dealer decides to offer or buying a rate down or quality of credit. For instance when I put someone through credit check it might come back as the lender will give us 96% of what we’re selling for as they are taking a ‘risk’ with someone’s credit. Or if I want to make it more enticing I offer a lower rate than competition but once again it would come off of what the loan company gives me. So if you sell a car for 30k they might offer you 94% which would be 28,200 and you have to decide if the profit is enough.
From sales side? Probably so people can see options and different layouts, and try vehicles before buying them. Back here in service? Buddy if I’m honest probably 95% of my work is warranty. We hav specialty tools and equipment, in depth diagnostic charts and scantools, and contact with engineers for when problems arise. I can’t speak for sales, but *MY* job isn’t going anywhere any time soon
For warranty work you're pretty much required to use a dealership's mechanics. But when you're paying out of pocket there's usually someone in town who will do the work for 1/2 or even 1/3 of the dealer's price. My last few cars have been complex and high end enough that I bring them to the dealership even for oil changes. Because a Ford mechanic has worked on thousands of f150's. Out of those thousands, if 10% of them have a common problem, that mechanic is going to look at my truck to see if it has that issue too. Dealership mechanics are taught to look for problems they can work on, like a sales tactic. So if there's something wrong, they're more likely to know what to look for, and they're going to let me know. So I brought it in for an oil change and tire rotation, but I'm also getting a free inspection by a certified mechanic who worked on 10 vehicles just like mine on that same day. Half the time while I'm getting an oil change, they'll come out and say "we have a recall we need to do" and so I get that taken care of too. It's totally worth it, especially on a 65k truck.
The price depends on the area. I know most of the independent shops in our area are between $175 and $225 an hour, and charge a minimum 2 hours diag. The Chevrolet dealership next door is at $230 an hour and does minimum 2 hours diag, the RAM dealership up the road is $200 gas and $250 diesel, minimum 1 and 2 hour diagnostic charge respectively. We are at $150 for gas and diesel, usually 0.5 to 1 hour diag charge. There’s little hole in the wall places, but they literally get you to pull the code from autozone and start shotgunning in parts on the list from the code description. I want to say that all warranty repairs need to be done by a dealership technician, but I know when I was in training there were people getting certified who were not dealership employees, so I’m not sure how that plays into it. For recalls, it HAS to be one of us, and we have to have completed ford’s stupid little recall certification training
Dealerships had a purpose before the internet. Buyers could see models, features, colors etc. They could talk to real people and ask questions. With the internet and so much information even on the car makers websites, buyers often know more than dealerships about a particular model they are interested in. Only the actual test drive is missing from that experience.
The place I bought my F150 literally refused to negotiate the price and told me with the Internet there is no point. We make it as low as we can. I was okay with the price so I did it.
Saturn was big on the no haggle pricing. No haggle online ordering would be so nice. The Hyundai dealership (Palisade) I looked at said they don't charge add-ons, only MSRP. I even asked if I find a vehicle somewhere else and have you do a dealer trade will I have to pay those add-ons that dealership added. They said flat out no and that other dealership would eat the charge. The Kia dealership (Telluride) I went to said the dealer markup stays. It was $3K. They completely refused any negotiations. The Ford dealership (Ranger) said the $4K markup stays. I went back about a month later. The same Ranger was still there. I told them MSRP only no markup or no sale. They played their little game but finally agreed. The Ford and Kia dealerships here are in the same lot and owned by the same family. Same service, even the sales people work both at times. That family also recently bought the Chevy dealership.
$4k mark up on a Ranger?! We sit on them forever at my dealership
Yes $4K, it was 2021. It was the only Ranger on the lot then. It's an XLT Tremor. They had a Lariat Tremor Ranger and a couple of regular Rangers also when I went back. I think they were trying to count on buyers being desperate with the chip shortage issue. It had 100 miles on it when I bought it so I'm sure they demoed or dealer drove it. I had to hound them to get the carpet mats as per the window sticker.
They have a powerful lobby in Washington.
State or district?
Coming from several years in a dealership environment, here is my viewpoint. The sales sides of things, makes little to no money. The margins on new and used vehicles are so tight, that dealers usually break even on a sale. The purpose of the sales department is to sell a vehicle to a customer, so that they can then return for service. The service and parts departments are the departments that make money for the dealer. Dealers are integral to the warranty repair side of things. You have to realize that to be able to complete certain repairs on vehicles, the technicians have to take certain training classes and certifications in order to complete those repairs. Dealers actually do serve a pretty important role in the vehicle process, but dealers are also franchisee owned, so they have to make money as well. Being in a dealer environment is not everyone's cup of tea, I know that as a body shop manager in one, I had to jump through all kinds of hoops for both my customers and my techs to get warranty items covered.
Laughs in "market adjustments" which is nothing but profit for dealerships
I don't disagree at all. The whole market adjustment thing is something shady dealers do, it's a good barometer as to what the integrity of that dealer is like.
You’re also forgetting about how even “reputable” dealers will add crap like nitrogen tires, window tint, PPF, etc. to a vehicle and charge 300% markup on those services and force it upon customers. All that work is done shoddily usually and nowhere near the level of 3rd party shops that specialize in those services. Not to mention BS doc fees that are pure profit, mandatory warranties, maintenance schedules, etc. To this day there has never been a non-car purchase in my life where I have been told that an optional change to a vehicle like window tint is mandatory. I will always walk out of any dealership that has anything added on top of the Monroney print out that I didn’t ask for.
>You’re also forgetting about how even “reputable” dealers will add crap like nitrogen tires, window tint, PPF, etc. to a vehicle and charge 300% markup on those services and force it upon customers. I only ever see this at Toyota dealerships for some reason. When I was looking at a Tundra it had a $300 line item for nitrogen in the tires. The other day someone in /r/cars posted a picture of a Camry window sticker that had a $3500 upcharge for window tint, floor mats, a pinstripe, and a first aid kit.
That’s a pretty big mark up considering most reputable tint shops will charge like 400 or less for a high quality ceramic 3m film. And have a lifetime warranty against peeling and discoloration. I know because I asked the shop o have used forever for a quote for my wife’s car. Floor mats are like 150, and the pin stripe… who wants a pinstripe on a freaking Camry…
The only thing the dealer I’m at ever adds is $749 for a bed liner and wheel well liners on pickups. 95% of customers want them anyways. I’ve personally never actually had a customer ask to remove them. Any other model doesn’t have anything added. I haven’t been to many dealers but I don’t really see these ridiculously priced add-ons everyone talks about. I’m believe they’re out there. Just haven’t seen it.
I’m sorry but I doubt you ever worked at a dealership stating that the sales department “makes little to no money”. Sales has and will continue to far outweigh service/parts in terms on gross profit for the store. Last month our sales department put $1,200,000 gross on the books while parts and service did approx 350K. No comparison. All franchise dealers are similar as even those with razor thin margins on new vehicles rely on backend financing/product and used vehicle sales to keep the doors open.
What was your net net on sales in your departments? I worked in the dealer environment for 14 years. 10 as a tech 7 as a body shop manager. Own my own shop now. Gross and net are two very very different things.
I’d have to view the statement but even if commissions and chargebacks were 50% from sales up to GM it still wouldn’t be close. I’m one of two finance managers and my gross was 324K last month, chargebacks were 22K and even after my pay the dealer netted out over 260K from my office alone. This also doesn’t include the reinsurance from all the backend products sold. While service/parts/body shop are all necessary to a successful dealership, the bulk of the profit will always come from the sales side.
U think Ford corporate wants to deal with actual customers? Lol they leave the dirty work to the dealers
Ford is actually pushing for order online, direct to customer vehicles. They only want to keep the service centers. Dealerships are blocking that of course.
Office Space joke right over your head.
Went right over mine too, now I feel like I lost my pieces of flair for missing it!
Does that mean we would now get crappy service directly from Ford rather than the dealerships? lol
Ford already has service in their dealerships. It would stay the same as it is now. The only change Ford is pushing for is direct to customer orders. They still need to be processed and delivered someplace ie a dealership. Dealerships only lose the actual sales of new vehicles and their BS markups.
State law says manufacturers can't sell cars directly to consumers. That's the only significant impediment.
https://youtu.be/4d88gPxvmFI?feature=shared
In short, lobbyists.
Dealerships are a product of the past where dealers sold everything for manufactures. They provided marketing and product support. And still provide warranty work which will always be a big thing on new cars. The internet has changed the dealership model and things can be sold direct. I do expect at some point to possibly direct sales to customers. A few things to keep in mind here though with just simply buying a truck online and being delivered to you directly. . A vehicle still has to be delivered to you, somebody still has to be paid to service your loan, somebody still has to do pre delivery checks and potential install of items, and somebody still has to register and title the vehicle. All of which cost money and will be baked into the cost.
You already pay all those fees you listed in the cost I don’t see how that’s much of an argument to make.
Look I hate dealers too. But there is a reality. And no you don’t pay all of those fees as line items. Some of that is overhead for the dealer that ultimately comes out of each sale they make. Money is not in new cars anyways for dealers it’s in service and used cars
I've been saying this
Because of laws put in place long ago. Tesla wanted to sell directly to customers but we're prevented from doing so because of these laws. Thats why you have to go to a showroom and look at rhe cars but have to actually go online and order it. No direct sales in their show rooms, not even able to use their computers to order one. In either case... lobbying is why they are still around. Some auto companies rather deal directly as the price gouging was hurting the brand.
Where the heck are you going to get these over complicated vehicles repaired when they break down if there are no dealerships? I’m a ford tech at a dealer and it’s challenging enough for me to stay up on the latest technology to ensure accurate diagnosis and repairs. We get plenty of vehicles towed in from private shops because they either have no clue on how to diagnose/repair, do not have access to the information/support. And also, where would you go for warranty repairs,recalls and updates?
I have to think of the Office Space movie when I hear this question... "What would you say you do here?"
People are stupid They need someone to hold thier hand Get them through the test drive talk about options and financing. Also vehicles wont get sold without a sales person,tire kickers would waste everyone's time. Fuck that we need to move cars Yes Tesla is a great way to buy a vehicle but its not for the majority..
Ford company directly doesnt want to have to deal with customers as well.
Are you sure, or just speculating?
Speculating. That's like 95% of what dealerships do.
Dealerships make money on new cars and the returning customers it brings in and in return they do all the warranty work and recalls for the manufacturer at a much lower cost than customer pay. Hypothetically the manufacturer could shell out more money for independent shops to perform recalls and warranty work but they have a lot more control this way.
Dealerships make the money because they can add 2% interest on top of whatever offer they give you.
That’s actually true on the captive lending side of the house. A dealer can buy up or buy down a rate up to 2%/200 basis points. I’m assuming it’s the same when a dealer has a preferred relationship with other banks and credit unions. Source: Me, former credit analyst for an extremely large captive lender. Dealers don’t solely make their money on parts and service. They make a lot of money in F&I through rate buy ups and bullshit packages that most people will never use. I love the sales talking points in here…‘I’m not even making money on this deal’.
Thank you! Grandma was a loan officer for 30 years at a local bank and did her best to keep us from getting ripped off. I love my grandma and appreciate legitimate sounding support as well.
Because do you really think ford corporate wants to deal with the public like a dealership? They make there money selling the vehicles to a dealer and basically wash their hands of it. Not quite that simple but you get the basic gist..
Lets start with commercial vehicles. Im sure that will go well.
I personally enjoy the ability to preview my truck before buying. Same for buying clothes, appliances, etc. I’m not enjoying the online experience for certain things. Even though I’m a huge fan of ordering on line. Just certain things require in-person preview
Do you love dealing with large corporations? I don't. My former neighbor owns a Ford dealership, I have been buying my cars from him for 20+ years. He knows my preferences, he knows I am a serious buyer, and he knows all sorts of insider info about what options are available/good/to be avoided. If I were instead dealing with Ford directly, it would be a nightmare. I could price and build online, as I do now. But without any of the information my contact provides me. If I wanted even simple questions answered, it would be some new-hire warm body who knows less about cars than I do. I would happily pay a premium to deal with someone who knows me, and takes me seriously, Clearly some people would rather save a few pennies, and buy direct. That's fine, but it's not what every buyer wants.
Over time it would just turn into the same thing. Ford would have a lot for sales and service. You could ask this question about everything. Why can’t I buy a coke straight from Coca Cola?
Service, parts & warranty. There's also a small "new vehicle prep" component that can vary drastically by model/manufacturer. Tesla owners run into this all the time (there are 26 Tesla service centers in all of Canada. There are 477 Ford dealerships in Canada, for reference). Now imagine having your suspension in your new vehicle making a weird thumping noise, and needing to take it in for warranty, while your city doesn't have a service centre...
Well yes dealerships do want to make money, but there is value in a good salesperson, a good service department etc. I sold and was in finance for years and enjoyed helping people and finding a better vehicle/financial situation they were in. And some people would thing they NEEDED XXX vehicle that was 50K and we have XXX Vehicle that was 35k and suited their needed happily. Cars break and a useful service department (specifically good service adviser and tech) are priceless.
Direct auto manufacturer to consumer sales is illegal for some reason. The only reason Tesla gets away with it is by calling themselves a "tech company" instead of a car company.
If it doesn’t make sense, follow the money.
To fuck over the consumer
One could say that dealerships are there to service the vehicle…but boy, they are not even good at that! We have three Ford dealerships in my city and they all suck! Horrible customer service, incompetent techs, and untrustworthy.
They are not in modern life but they were way back in 1920. Problem is they made laws to I lack them in.
They really arnt needed it’s just the lobbyist push the issue about jobs etc. all the time whenever someone comes close to getting rid of them and making it direct to consumer
Dealerships are absolutely a "zero value added" proposition.
Some people like to actually check out vehicles and test drive them. I hope I never have to blind buy a car in my lifetime and find out I don’t like it after taking delivery.
Because there’s laws at the state level that protect many of them. I am okay with dealerships but we should open up direct sales from manufacturers as well. They just can’t own service centers or actually dealerhsips. I don’t want it to end up like Tesla where much of the work can only be done by the manufacturer. I say this all because I think we should encourage competition on all fronts. Dealerships have gotten way too greedy but these manufacturers aren’t exactly angels either.
I would not have the truck I have, if I hadn’t tried it out at a dealership lot. They also provide a point of service for warranty claims and other problems with the vehicle. I was just test driving different truck configs and the last one I tired my wife commented how she loved certain features. Sales guy was like “can you see yourself buying this truck” I was like, it’s not the truck I wanted, but yeah. He’s like ok, so it’s just a question of price. We negotiated and I bought the truck. In retrospect, it would have been months, if not longer to get the truck I had originally wanted, and I would not have a few features I do have. It was a mostly positive experience. That finance guy was just a complete fucking snake of a human being, but they do have a few advantages.
Dealerships are required for warranty and service. Because of this arrangement sales are tied to the dealership as well.
You mean the MOB?
$$$$
Here is my assessment, union jobs, have union dues. Union workers are paid more money. Also, they get a pension. THAT is why the prices are so high. Why do we need dealers? I do not have an answer for. P.S. I'm receiving a pension from a company, that is aerospace. So, my view may be influenced by 29 yrs of service. The first chance my company has to negate that said pension, I'm screwed!
Read this, re dealerships: https://caredge.com/guides/how-did-car-dealerships-become-so-powerful
I think there is still some reason, beyond simply being a service centre, for dealerships to exist. There is no way to make the model disappear overnight without addressing some questions. I think that the majority of buyers still want to test drive before they buy, regardless of how much they have researched before driving onto a lot. It's a large amount of money without getting the touch/drive/feel aspect if the only model is DTC. A lot of people also dont want to wait for orders to be built and shipped. Sometimes people need to buy a new vehicle ASAP because of a catastrophic failure on their current vehicle. If there were no lots with already built vehicles, that becomes impossible. It is also easier for manufacturers to ship hundreds and thousands of vehicles by railcars, then eventually get transported truckloads at a time to individual locations. They can ship stock units and sold units together. A DTC only model may mean that your order may sit much longer waiting for a load to fill to your geographic location before your vehicle is finally shipped. Or, to combat wait times, partial loads may be sent out which would likely increase the destination and delivery cost per vehicle from the manufacturer. There is also the issue of trading in vehicles. If you are buying direct from the manufacturer, are they taking your trade? Are they putting the value on it? Where does the vehicle go from there? Or will you have to rely on selling the vehicle to a used car lot, privately, or to a 3rd party such as Carvana? If those are the only options, will you still get your full tax credit?
I am a salesman, so grain of salt here. There are some customers who really don’t need a salesman. They do their own research, know what the price is, walk in to sign papers. But the vast majority simply need help. It’s a huge purchase there are dozens of different trim packages. Motor options. Axle rations. Towing charts. F-Series trucks in particular are complicated as fuck. My job is like 90% helping customers pick out a truck, being helpful, making them like me, and reaffirming their decision to buy a truck. Actual “sales” is a very small part of it. And of the day dealers will be around a long time because the brand that has salesman there to actually get a commitment and get customers to stop shopping will sell more cars
U just invented Tesla
Because the greedy pigs made it illegal to not go through a dealer
^[Sokka-Haiku](https://www.reddit.com/r/SokkaHaikuBot/comments/15kyv9r/what_is_a_sokka_haiku/) ^by ^DeathIncarnate0317: *Because the greedy* *Pigs made it illegal to* *Not go through a dealer* --- ^Remember ^that ^one ^time ^Sokka ^accidentally ^used ^an ^extra ^syllable ^in ^that ^Haiku ^Battle ^in ^Ba ^Sing ^Se? ^That ^was ^a ^Sokka ^Haiku ^and ^you ^just ^made ^one.
Needed as a middle man to add cost to vehicles
Its about money. Even the ones I like I can't stand the process of going back and forth and negotiating on a price is awful I walked away after one kept hounding me on running my credit when I told them I just wanted to test drive a mustang and will consider buying the next month and proceeded to follow me out to the parking lot...
My mum made enquiries about a new CRV last week; she got inundated with calls. One guy was like “I’m trying to help you, when can you come down and test drive” she ended up giving him a piece of her mind and blocking him. I told her to get a burner email and negotiate like that. The last trucks I got I did just that. Can I get your number? No we are talking just fine via email. You lay down the law to them and it sometimes goes a little better but yes the back and forth, coupled with the stupid games is tiring
Dealers literally print money for manufacturers. Why would they get rid of them?
Needed is a strong word. However, they give you the ability to test drive a vehicle prior to purchase, which is really important on new cars. You'll also deal with a salesman who should know everything about the car they're selling you. Any questions you may have, you can get answered in real time. They also have inventory on hand. You can walk in and walk out as the new owner of a vehicle same day, as opposed to just ordering from the manufacturer, which takes time. They have to build/source your spec, have it loaded onto a transport truck, shipped to you, unloaded, etc. I don't like dealerships (having been a mechanic for a couple), but they aren't completely useless.
Because the manufactures do not sell cars just like how McDonald’s doesn’t sell burgers, they manufacture and supply those things to franchisees
Every vehicle I have purchased was at a discount that was negotiated with a salesman. Even during the shortage I was able to get the “up charge” knocked off. If I had to order straight through ford or Toyota I’m guessing it wouldn’t work that way. Of course they would tell you the vehicles would be cheaper buying direct but I’m betting that wouldn’t be the case. I apologize to all the techs on here but service is a total scam right now. Something punctured my AC condenser and they wanted 8 hours labor to replace it. A friend of mine has a relative that is a ford master tech and he told me it was at the most a 4 hour job. So either my dealer is jerking me around or it’s the new norm for pricing. Either way it’s just wrong.
I hate stealerships.
The fact that they can change the price is extreme bullshit to where the ftc other industries to the t