By on January 22, 2013

Last week, a Massachusetts judge sided with Tesla regarding factory-owned stores, in a suit brought by Massachusetts State Automobile Dealers Association and an assortment of dealers. Barring an appeal, the ruling essentially clears the way for Tesla to operate their own outlets – some of which are in non-traditional venues like shopping malls – and offer an online reservation system for vehicles.

The ruling brings into question the very nature of the independent dealer model, the laws that currently protect it, and its sustainability. OEMs have experimented with venues that merely act as showrooms, rather than ones that sell cars, as well as outlets that blur the line between an “experience center” and a factory store – the most recent example being the Chrysler pseudo-factory “Motor Village” in California.

Tesla, for one, uses the online ordering system to skirt the dealer franchise laws in various states, since they are not technically selling cars there. But that didn’t stop dealer groups from suing them anyways. Robert O’Koniewski, the Massachusetts State Automobile Dealers Association Executive Vice-President, claimed that the group did have standing to sue Tesla, because

“If you read the statute, it’s pretty clear: A factory cannot own a store, and a dealer can sue for injunctive relief if they feel the public is being harmed.”

Now, we’re faced with a few questions

1) What constitutes a “factory owned store”, and did Tesla knowingly operate in a manner not consistent with the definition of a “factory  owned store”?

2) Was the public being harmed?

3) What impact will this have on OEMs and their decision to operate outside of the traditional dealer network?

I will leave numbers 1 and 3 up to you, the B&B, because I am not well versed in the intricacies of U.S. franchise law, and many of you have real-world experience at the dealer level. As for number 2, I’d say “probably not”. But O’Koniewski does seem to think that the dealers are being harmed, and sounds rather desperate when discussing the matter just a few months earlier.

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57 Comments on “QOTD: Doing Without Dealers, Part II...”


  • avatar
    Stumpaster

    Should be fun pulling a tow truck to some posh mall with Tesla store, dropping the car at the mall entrance, and asking the “non-dealer” to address a warranty issue. They probably can’t even push the car to the parking lot.

    • 0 avatar
      bumpy ii

      And why would anyone do that? There is no inherent reason that delivery and service should be colocated.

    • 0 avatar
      ExPatBrit

      Why would the Tesla owner have to go to the store for warranty?

      Just like most consumer products they would have an authorized repair center.

      It’s about time the dealer franchise system was challenged. It doesn’t need to go away but needs updating.

      I would love to order my car car online and never go any where near a dealer, even to pick it up or sign the paperwork.

      • 0 avatar

        +1

      • 0 avatar

        Ultralight airplanes are usually delivered in a box (a crate) in U.S. The system is similar to ordering a TV from Amazon, only instead of UPS the box is sent by something like Interstate because of its size. The warranty service is done by the factory.

        Light airplanes are usually delivered under their own power, by a ferry pilot. It’s cheaper than disassemble them for shipping. The warranty service is done by authorized service centers. I happen live right next to a service center of Beechcraft.

        What’s interesting, usually the factory either sells direct, or through dealers, and sometimes they switch model (CGS, makers of the Hawk, even went from factory to dealers, oddly enough). I think that the system works even without the obsolete laws that are designed to protect parochinal interests and advance the cause of corruption at the expense of consumers.

        I can see a ferry driver delivering me a Tesla Model S, that thing is expensive enough. Or they could send the car carrier truck and unload the car into my driveway.

      • 0 avatar
        noxioux

        I don’t know, I think it could go away. There’s no reason at all that an online, dealer-free buying model couldn’t work just fine.

  • avatar
    danio3834

    I say if Tesla wants to have a go of it this way, let them. It’ll probably work OK for the small volume of cars Tesla is moving.

    Personally, I think the traditional dealer model is an advantage to large OEMs or they would have stomped them out completely when they had the chance.

    For one, a dealer network of hundreds or thousands of stores needed to move millions of vehicles is huge overhead that an OEM would not want to actively manage. Dealers are not only sales showrooms, but are now huge service and parts centers. Dealers can manage these how they see fit and employ creative marketing ideas that the marketing folks at HQ could never dream of. Dealers know their market best and know what works.

    The downfall of dealers seems to be that a lot of consumers aren’t happy with the purchase experience or after sales service. As the market becomes more compeititve, more and more dealers are becoming customer focused and are vastly improving this experience. If one dealer wrongs a customer, the dealer down the street has a great opportunity to make a right and gain a customer. There are a lot of customers who become disgusted with a manufacturer, but are so pleased with the dealer service that they may even stick with that establishment or brand.

    If all dealers/showrooms/service centers were factory owned and run, the customer would lose a lot of the advantage that the independent dealer competition provides. Independent dealers will often advocate on behalf of “their” customer.

    I don’t see independent dealer networks evaporating any time soon. Tesla may choose to go about their business in the way they see fit, but their business model isn’t the same as the volume companies.

    • 0 avatar
      Toad

      Rather than the government(s) mandating one business model or another, let’s remove the franchise rules and restrictions and let manufacturers experiment. Your preference may be interacting with a dealer, mine may not, others may prefer to mix and match. It works fine in all other retail formats; some shoppers prefer Costco, others like Nordstrom, etc.

      Rather than work to impose our preferences on others let’s deregulate and see what happens.

      • 0 avatar
        healthy skeptic

        @Toad

        +1. In other words, common sense.

      • 0 avatar
        olddavid

        What happen when they arbitrarily decide your town is no longer a viable market and move their primary operation 75 miles away? Who will represent your interests versus the corporate behemoth? It will be much like the woman who sued in small claims and won, only to find that the appeal allowed lawyers on the next level. To continue, be prepared to pay five figure retainer. You think the current model is broken, wait for the brave new world of complete market integration where each warranty claim is you against the RenCen gang or Munich’s boys. Be careful what you wish for.

    • 0 avatar
      Lorenzo

      Well, the OEMs are eliminating that competing dealer down the street so they can maximize volume at fewer dealers. The open competition model is kind of a transitory state since none of the players except customers get the benefits. It’s transitory because all the players are trying to game the system individually against each other to maximize profits.

  • avatar
    Gardiner Westbound

    The dealer model is irretrievably broken. Solely interested in pushing cars out the door car dealer “value added” is negative. They provide one of life’s most miserable shopping experiences. Customers are treated as marks. Honesty is rare. Numbers are tossed about, promises made and broken. Buyers are scared to death they will be pressured, cheated and ripped off. Their fears are well founded. Automobile transaction costs vary 40 percent!

    But what if there were no showroom shakedown? Honda Canada imports its Fit model from China. Chinese and Indian branded cars may be sold through the Internet and big box stores. Canadian Tire, Costco and Walmart are naturals because they already have auto service departments. It will be a killer selling point for the majority of buyers who don’t relish being duped, fleeced and swindled in the typical dealer experience. How does a $5,000 new car sound?

    • 0 avatar
      Type57SC

      How do the Canadian auto franchise laws compare to the US?

      In the US, the big box stores would have to abid by the franchise laws and existing sales and service agreement templates. A few big restrictions would be that dealers in the same market areas can object to a new point being added and existing dealers would want the big box to have all the same investment requirements that they do.

      I don’t see an inherent illegality with the factory having similar demo stores or marketing stores in malls that cannot take orders, although if it happens it would probably require the local dealer group’s participation.

    • 0 avatar
      morbo

      I was banned from Kerbeck Pontiac/Buick/GMC/Mitsubishi in Pleasnatville NJ. Merely for expressing my 1st ammendment rights to free speech.

      by explaining in detail what a POS new car (03 Bonneville) that the dealer’s nephew had sold me and how I was being poorly treated by service and sales

      At a high decibel rating.

      On a busy Saturday morning when they were giving me the runaround on my latest critical system failure.

      Squirrelling two deals that were at the signature phase, one for a new Denali Yukon and one for a new Envoy.

      Ahh, the joys of car stealerships.

  • avatar
    ToxicSludge

    I have been buying vehicles since I was 16 years old….I am in my 60′s now.The ‘dealer experience’ is horrendous.The ‘dance’ as I call it just wears you out……and then there is the paperwork where they try to scare the shit out of you with tales of woe if you don’t add this protection and that….it ain’t fun at all.

    • 0 avatar
      Lumbergh21

      “You really should get the extended warrantee. It will cover the cost of repairing …”

      The obvious response to that line of BS is “So, you’re tellng me that your cars are a piece of garbage that will fall apart as soon as the manufacturer’s warantee is up? I don’t think I want this car now. I mean if the dealer doesn’t even think it can last beyond the warrantee period, it must be really poorly put together.”

  • avatar
    redliner

    I say it’s about bloody time! Having non-commission based sales staff means that there really is no pressure to buy, and all service is being performed by a factory trained technician.

    The idea may be greatly disliked by those that have dealer ties or those of an older generation. However, young buyers LOVE this. We like ordering things online. We like having simple pricing without haggling. We like the idea of an electric car.

    I’m sure that doing things this way is very capital intensive for Tesla for the moment, but it fits their niche bushiness well, and I think in the long run, it will pay off. Whatever people say about him, Elon is not daft, in fact, most of the things he touches work out well.

    • 0 avatar
      olddavid

      Didn’t they try to mandate commission on car sales to a percentage of the sale price in the Bay Area back in the 1970′s? Why didn’t it catch on nationwide? I have worked in the OEM finance and advert side in three countries and the prevailing view of car salesman as pondscum isn’t always universal. It always seemed to me to be a classic case of penny-wise and pound foolish when compensating the sales force. Your least-trained staff is also the face of your corporation? The Golden Goose may be dead now, but when I first cashed a four figure check in 1975 for five days of work I was astounded. Yet the poor bastards on the line who I trained were a 50/50 mix of minimum wagers and ego-centric bullshit artists with zero product knowledge and NO concern for downstream sales. God knows we tried to instill a sense of professionalism, but in most cases as soon as we and our company-funded $100 bills left, so did any thought of reform. Frustration finally prompted me to move to the financial side. It seemed everyone’s memory was as long as their d@#k. They had a saying back in the 1950′s that, sadly, is still probably appropriate- “hero on the 31st, zero on the first”.

  • avatar
    JSF22

    The Massachusetts court fight is not necessarily over. The court did not exactly side with Tesla; it first said it would not shut down Tesla’s Massachusetts display during the litigation because the dealers did not meet their burden of showing they would be irreparably harmed by Tesla’s operations, and then it dismissed them saying that the dealers who sued didn’t have standing to bring the lawsuit. This still could be appealed, and the Massachusetts dealers and Attorney General have pretty fair arguments that the letter of their statute prohibits what Tesla is doing. It will be hard for Tesla to keep a straight face arguing they are not doing any selling at all from the mall. The laws of many other states are the same.

    This doesn’t mean Tesla is on the wrong track. Every OEM dreams of operating without dealers, or at least of having direct control of retail operations. (About that, more in a minute.) As a new manufacturer with a unique product, a big educational task, and a need to ensure a uniformly positive experience, I’d be doing what Tesla is doing. I’d probably do that even if I had to stay out of some states, confident for now that the early adopters would find me, as long as I could arrange a reasonable service experience.

    Ironically, Tesla’s home state of California, also home of the first really tough dealer protection law, is on their side here. Because there are no independently owned Tesla dealers, California freely allows them to sell directly. California only prohibits a manufacturer from competing with its own dealers. This also must be the basis of their argument that all sales are by phone or Internet from California.

    Do the Massachusetts dealers really care about Tesla? Of course not. But they desperately care about shutting down direct retail before somebody at a car company they care about thinks they too have found a loophole. This is a huge theoretical risk to the dealers, though probably a very low practical risk, for all the reasons danio3834 points out above. OEMs began the franchise system because they couldn’t afford anything else; dealers paid their legislators for laws to institutionalize the system; and now it is even more true that OEMs can’t afford anything else.

    My prediction: Tesla will end up doing whatever it does and nobody will really care that much, the franchise system will remain basically as is, and OEMs will increasingly rely upon large publicly traded dealer groups, as has become the norm in many other countries. Yes, the dealer groups have more negotiating leverage than mom-and-pop stores, and they theoretically can brush off the OEMs, but they also can afford to meet very expensive OEM facility and other requirements, and they can’t afford to let themselves get terminated.

    • 0 avatar
      hreardon

      JSF -

      Good analysis, and this is likely the route things will go. That said, if you read Bertel’s article about dealership profitability from yesterday it becomes clear why many OEMs would want a greater piece of the lucrative service pie.

      Premium brands, in particular, would benefit greatly: an Audi, BMW or Merc factory-owned outlet where you could custom order, no-pressure buy and service would (hopefully) cut out a lot of the bits that make the current experience less than thrilling for most. They would be able to continue charging premiums, but more of those dollars go to the OEM.

      That all said – I agree that what the OEMs will do is simply make the cost of being a franchisee so great that only the large ones comply.

      • 0 avatar
        stuki

        +1

        For mainstream makes dependent on determining the exact product mix down to indovidual options up front, having local “experts”, in the form of dealers, do the ordering up front at least provide some value. For premium, “build to order” makers, not so much.

        Regardless, the idea that the dealer is looking out fr the public interest is so ridiculous that it would take a progressive to believe it. Left unregulated, the best sales chain models would filter to the top. Like pretty much all other laws, those governing auto dealers are simply there to enrich those connected, at the expense of everyone else.

      • 0 avatar
        Herm

        The service pie with pure electrics is going to be pretty skimpy.. alignments, tires, windshield wipers etc. The software on a Tesla is updated thru the internet.

    • 0 avatar
      snakebit

      In the case of Tesla in Massachusetts, they already found a site in Natick, near their current mall location which was a former auto dealership, and the plan is to move there when all of the litigation is resolved. The mall site is just a temporary way to expose the buying public to their cars.

      As for ‘older’ car buyers preferring the dealership experience to buying from the internet, don’t believe it. No one enjoys dealing with auto dealerships, for the most part. Personally, buying a car should be as easy and painless as buying a computer from Micro Center or from an Apple store. It’s just that dealerships haven’t gotten and read that memo, yet.

      • 0 avatar
        stuki

        The dealerships have gotten the memo. That’s why they’re so bent on using the coercive power of the thugs-in-chief to prevent anyone else from routing around their rent seeking operation.

    • 0 avatar
      Pch101

      “Every OEM dreams of operating without dealers”

      No, they don’t. The dealer franchise concept was concocted by Henry Ford, who wanted to keep his factories running at full speed, and to pass the inventory management and retail business risks to somebody else.

      Dealer franchise laws are an understandable response to the power imbalance between manufacturer and the local retailer. The last thing that a local businessman would want would be to build a strong local outlet, only to have the manufacturer squeeze him out of it once he has gone to the trouble.

      The issue of crooked dealers is separate from the issue of leveling the playing field between franchisor and franchisee. The average TTAC poster who comments about this is under some delusion that a company-owned store is inherently superior, when the most likely outcome of a company store model is higher prices. The best way to protect the consumer is by passing consumer protection laws.

      • 0 avatar
        stuki

        “Consumer protection laws”, like all laws, are designed to protect those that sponsor them. Which are rarely some guy who is barred from ordering his car from Amazon, despite wanting to do so.

        Even absent “consumer protection laws”, nothing would force anyone to deal with a company owned store instead of a dealer. If the company stores were truly such horrible places, people wouldn’t shop there, and the company would suffer as a result. Dealer franchises may well be the optimum way of moving certain cars, but if they are, they would be so without having to rely on barring all other possible sales models.

        Outside of the auto field, there are very few lines of business where dealers rely on franchise laws to “protect the consumer.” And yet, there are very few goods outlets those protected consumers rate as low as auto dealerships.

        Of course, if one is sufficiently indoctrinated in the twin pillars of progressivism; things are diiiiiferent in this case, and the man haled as an expert on TV cares about you and knows more than you, since he is after all the one who funded some politicos campaign; then anything is possible. For those of us higher up the evolutionary ladder, not so much.

  • avatar
    redav

    I support Tesla on this one, and I hope that laws protecting dealers are repealed. I do not believe any dealerships have been harmed by Tesla stores.

    I support diversity of business models because that enables innovation and permits companies to use the system that best benefits them. Laws should still protect consumers, but I prefer that they define objectives/results rather than specify methods.

  • avatar
    AMC_CJ

    The dealership model needs to go, period.

    Factory outlets, where cars are rarely stocked but instead tested and order. Keep inventories very low, just-in-time production, etc. Keep the service and parts side, but have everything under a corporate system.

    I use to work for a dealership in the service department. For one, millions of dollars (of a good) year goes towards the owner, who is most cases now inherited the business and really does nothing but keeping tabs on the GM. Then you have the game of the dealer buying vehicles from the OEM, getting swamped with bad sellers, etc.

    The biggest problem with that is people are impatient, and what a car the day of purchase; not wait a few weeks for it to show up from a central distribution center or factory.

    Now, to a personal level, I work for a very large corporation now. Despite my qualifications, at a dealership, unless my last name happened to be the on the sign out front, there was only so far I was every going to get. If you think buying a car from a dealership is bad enough; try working for one…..

    • 0 avatar
      stuki

      My gut feeling is that, if the dealership model is truly as universally bad as it’s reputation, it wold already be gone. Instead, I suspect it sometimes works, sometimes not, and whether it does is dependent on the market it’s in, the models it sells, and how it is ran.

      What needs to go, are laws preventing dealers from being exposed to competition from others outlets, and other modes of selling vehicles. As always, just scrap all laws pertaining to the matter, and things will work themselves out.

  • avatar
    carguy

    The dealer model is really not adding enough value to justify its existence. And dealers know it – that is why dealer associations are spending so much money to lobby law makers.

    While dealers can be useful for OEMs in that they can do some of the dirty work by proxy, I don’t think advantage outweighs the negatives in the long run.

  • avatar
    Advance_92

    Minus the experience of actually dealing with dealerships (which I think most everyone agrees is terrible), isn’t the business model using them what keeps prices low in the US versus other countries? By having a supply on hand it results in a lot more cars which are cheaper to buy, although for anyone that cares about options it can paradoxically limit your choices.

    On the other hand, with today’s technology and manufacturing methods how hard would it be to order a custom car and have it sent to your town these days?

  • avatar
    stuart

    If automobile dealers are truly “necessary,” why do they need laws that protect them from competition?

    If Jones Clunkmobile is providing significant value to The Public, Jones should have no problem competing with Walmart or Sears or Home Depot, or an online web-store. Or all of the above.

    If personal computers and major appliances can be bought in all of these places, why not cars?

  • avatar
    Glenn Mercer

    Just for the record, here is the portion of Massachusetts law often cited in conjunction with Tesla; it says a manufacturer is not allowed:

    “(10) to own or operate, either directly or indirectly through any subsidiary, parent company or firm, a motor vehicle dealership located in the commonwealth, of the same line make as any of the vehicles manufactured, assembled or distributed by the manufacturer or distributor.”

    • 0 avatar
      Type57SC

      That seems pretty clear against Tesla (and against common sense, capitalism and the consumers’ interest). So why did the court not stop Tesla as the dealers wanted and as the law seems to support?

    • 0 avatar
      Herm

      Its not really a dealership as long as they dont accept money, its just a showroom, a permanent display with employees that can answer your questions, offer you a test drive etc.. they dont even do repairs at these showrooms and I doubt they accept trade-ins. Similar to a car displayed in the courtyard of a mall

      • 0 avatar
        JMII

        That is what I was thinking. Telsa has a “store” in Scottsdale AZ, I saw the Model S there. It was nothing more then a display of a car along with branded merchandise: stuff like hats, shirts, keychains and various other swag. They had videos showing the car in action along with those cut-away engineering displays you see at car shows that allow you to explore the guts under the pretty skin. This store was small, just big enough to walk around the car. I wonder how much they pay in rent for what is basically a promotional display? How many sales does such a place generate? I assume its more about getting the brand recognized and allow people to see what is basically a rare/special vehicle. I think Ferrari has similar stores. In Paris I saw the same thing with Toyota, they had their F1 car on display along with other cars both new and historic.

  • avatar
    buck-50

    I would gladly pay list price if I never had to deal with a car dealer again. Order my car online with the options I want, get a delivery date, done. No more “We don’t have one in red with a stick, but we do have an automatic in camry gold… but I got another buyer coming in in 20 minutes to look at it…” No more negotiating, no more hidden costs, no more floormats cost extra.

    • 0 avatar
      stuki

      “No more negotiating, no more hidden costs, no more floormats cost extra.”

      Problem is, if you reveal that preference, List Price will start creeping up and up. Until you no longer would be willing, or able, to do just that. Bargaining is a two way street, and has been part of all cultures since the dawn of time for a reason.

      • 0 avatar
        buck-50

        Somehow I doubt that prices would creep up any more than they already do. If the prices are out there, on the internet, the actual prices that everyone is actually paying, it’s a lot harder to creep those prices up without giving people more stuff they want.

        If it was up to me, you’d have a dealership with one of each model for test drives, and that’s it. No inventory waiting to push. Test drive, order it off the internet, have it delivered a week (or 12, screw you volkswagen) later. Less wasted space for dealerships, no inventory to get trashed in a storm… You lose the ability to buy a car right now but honestly, is that a bad thing?

      • 0 avatar
        Herm

        Scion is that way, no haggling, everyone pays the same.. have you visited a Scion dealership yet?

      • 0 avatar
        stuki

        @Herm

        I was going t be snarky and respond “Nope, and neither have anybody else in recent years….”

        I did go to check out the 86 when it came out.

        Just out of curiosity, what do Scion dealers do when they are stuck with unsold inventory? Are you sure they don’t simply cover up their bargaining by moving it to more opaque areas like lease and financing rates? And perhaps discounts for paying cash? Or are they like Ferrari, permanently undersupplied by design?

    • 0 avatar
      krhodes1

      @buck-50

      Buy a BMW. They will cheerfully build one to order just for you. And if you pick it up at the factory in Munich, they even give you a nice discount! You still have to place the order at a dealership, but they are not so bad to deal with, especialy if you are willing to pay MSRP. Technically floormats are an option, but BMW tosses them in if you do Euro Delivery. I refuse to buy a new car “off the rack” if I am spending real money I want it my way.

      Figure six-weeks delivery time to the US East coast.

  • avatar
    tikki50

    Oh please Tesla push forward with this model so larger OEM’s will bite in and kick the snot out of dealers. Sorry but your monopoly on new cars sales is about to fall, you’ll actually have to produce a positive buying experience! Large OEM’s brands get tarnished real quick locally from a poor dealer. I’M all for the brands taking dealers over, I would guess the hold up has been legal issues. But if Tesla is going to take that fight more power to them. I might just actually buy a new car for once. Imagine that.

  • avatar
    dolorean

    Didn’t we already try something like this about 15 years back? Daewoo, right?

  • avatar
    healthy skeptic

    For the record, I, as a member of the general public, do not feel like I’m being harmed by Tesla retail outlets. I’ve been to a couple. Didn’t buy a car, but each was a nice, pleasant, no-pressure experience.

    Can’t say the same for any car dealership I’ve ever visited. Maybe that’s where the harm is coming from.

  • avatar
    phlipski

    Read last month’s Esquire article on Elon Musk – great stuff. He loves a fight with entrenched companies who he feels are ripping him off. There’s a choice line about him pondering getting into the aluminum business since Alcoa was gouging him on some rocket parts. I see no reason for dealer protection laws. High end audio is a similar situation – some brands (Paradigm) sell through dealers, and some (Audioengine) sell factory direct. Let the market decide. Isn’t that what capitalism is all about?

    • 0 avatar
      stuki

      Of course that’s what capitalism is all about. Which is why all those who want to leech off of others without providing actual value is so hellbent on discrediting it.

    • 0 avatar
      Type57SC

      The laws came about when GM had 50%+ market share and could do anti-competitive things, and abuse monopolistic power in unconsumer friendly ways. With today’s market share, those are no longer concerns of most consumer advocates and outsiders who have no stake in the status quo.

  • avatar
    daveainchina

    I’m just happy to see this. Hopefully we’ll see a renaissance in how new cars are sold.

    I suspect the end result will be better for most people, just not the current dealers that fail to adapt.

  • avatar
    olddavid

    The franchise laws came about to protect the dealer from anti-competitive practices. The OEM could easily operate a store at a loss, driving the local ownership out, then assume his assets at liquidation prices. I’m baffled by the vitriol of your experiences with your local dealers. My family operated a dual franchise dealership for almost 20 years. Our little town had less than 20,000 people, and as such, everybody knew everybody. When I was 12, I used to drive a local judge to work when he had his Imperial serviced. My Father used to trade a Jeep to the local Cadillac dealer every year so my Mom could drive a Sedan deVille. The point is that we were no different than the local grocer. If your experience has been so detrimental, why not leave, get on the phone and find someone who could do business with you in a manner that allowed some dignity? This adversarial mindset started in the 1950′s with a selling technique from a company called Hall-Dobbs Management. They asserted that if you sent enough people at the customer, eventually they’d find a face they liked and buy. The whole let me take your offer to the boss etc. came from these deep thinkers. They came to dinner at our house and my Dad threw them out. My Mother was mortified, yet she agreed that they had to go. Yet, statistically, they were winning. In retrospect, more scrutiny should have gone to looking at the data. I cannot even remember the amount of times we got business from a town 60 miles away with larger population that appreciated being treated with respect. The comment from Buck50 astounded me. Pay more for the same car? Is anyone out there listening? This here interweb thing should be able to help, right?

    • 0 avatar
      stuki

      The problem with franchise laws, as with ay laws, is that they don’t protect dealerships like the one you refer to. Unless the OEM you were supposedly protected against could give the customer as good service as you are describing, they would be better served by letting such good dealers do it for them.

      In reality, the law only ends up protecting scummy dealers; since even dealers that nobody likes, gets to have a local monopoly because laws makes it too costly to go into competition with them.

      It’s like gun laws. They are only there to make things difficult for decent people, while criminals will get their guns even if they are illegal.

  • avatar
    BobinPgh

    One question I always had about dealer: For the customers who want cars right away, why not have 10 to 20 cars in inventory rather than 150 to 200? There would not be so much money tied up. Or is the reason for so many unsold cars to keep the line going and they are just using customers as an excuse?


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