By on October 8, 2013

welcome

The way that the auto industry uses the traditional independent dealer sales channel and proposed alternatives to that process have prompted considerable debate here at TTAC recently. While industry followers watch Tesla’s attempt to change the way automobiles are retailed with their factory owned outlets, General Motors is doing its part to change the retail sales equation, or at least make the negotiating process a bit more user friendly. If buyers want to, they can now complete the entire car buying process and even take delivery without ever stepping foot in a traditional dealership. However, GM says that the program is there to complement the existing retail dealer sales channel, not replace it.  According to Automotive Newsby the end of 2013, GM will expand  the Shop-Click-Drive online shopping program nationally.

Shop-Click-Drive has been running as a pilot program in eight states since 2012. It allows car buyers to buy vehicles, from initial inquiry to arranging final delivery, all online. Dealers are part of the process since Shop-Click-Drive is accessed through their own websites, not GM’s, but it’s clear that one of the features of the program is eliminating the perceived hassle of negotiating with a dealer that some people experience when buying new cars.

GM spokesperson Ryndee Carney said that the program will be available by the end of the year at all of GM’s 4,300 U.S. dealers. “Consumers increasingly want to do some degree of car-buying online,” she said. Interestingly, very few of the customers using the pilot program opted for a completely dealer-free experience. While about 900 vehicles were sold through Shop-Click-Drive, only five buyers opted to do the complete process online and take delivery without visiting a dealer. For all the complaints consumers have about car dealers, some people apparently still prefer some human interaction in their commerce. “People still want a relationship,” Carney said.

The program  has five steps:

1. Check inventory and pick a car or truck.

2. Get your trade-in value appraised.

3. Apply for credit.

4. Select options and extended warranties.

5. Schedule delivery either at the buyer’s destination of choice or pick it up at the dealer.

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81 Comments on “GM Expands Shop-Click-Drive Online Car Buying Program Nationally...”


  • avatar

    This isn’t the first time this has been attempted and it certainly won’t be the last. GM used to have a test drive track here in LV so consumers could drive a vehicle before ordering it online, without having to visit a dealership. These things are dreamed up by non retail theorists who lack the knowledge and experience that comes with working real car deals.

    Consumers will mostly use the Shop-Click-Drive price as a negotiating chip to get an even better price someplace else. Anyone who has ever worked in retail know that what consumers say and what they really mean or two different things. They also know the complexity of the average car deal exceeds what can normally be done without face to face contact.

    There is just no way a consumer gets maximum value for their trade without having someone lay eyes on it, drive it, and look it over. Non market participants generally think you just look up a value in a guidebook.

    Imagine the chaos if an OEM attempts to undermine its own dealer base.

    • 0 avatar
      Detroit-Iron

      Excellent points. That being said, this statement: “There is just no way a consumer gets maximum value for their trade without having someone lay eyes on it, drive it, and look it over.”

      Presumes that the dealer is acting on the consumer’s behalf. They are not nor should they be. The dealer is trying (in the case of a trade in) to pay the least amount of money for the best car.

      • 0 avatar

        No presumption it all, I just stated the obvious. Would ANYONE pay as much for something sight unseen as if they had actually looked at it?

        Yes, the dealer is trying to steal trade ins in a competitive environment where he/she knows all other dealers are crying for inventory. That makes sense, right? The fact is there is an internal war going on in each dealership. The new car department and the sales person wants the maximum amount for the trade possible. The used car manager wants to own the car for a price that allows him/her to recondition it and have enough money left over to make a sales profit, WHILE STILL BEING ABLE TO TAKE THE CAR TO WHOLESALE AUCTION AND CASH OUT.

        • 0 avatar
          wsn

          Then just don’t trade in online.

          Purchase a car on line and sell your old ride via Craiglist. IQ requirement: 80.

          People buy $30k diamonds on Bluenile, I don’t see why they can’t buy $30k cars on an official website of an auto maker.

    • 0 avatar
      morbo

      How much does NADA pay you to schill for them on blogs? Is TTAC really that big of a blog nowadays that paid ‘social media influencers’ (or whatever newspeak term you people use to describe your schtick) are sent to overwhelm the forums? Do you have a web crawler that alerts you to any utterance of Tesla or dealer relations, or do you manually check the blogosphere for places to attack?

      Oh and please respond in this thread; the last time your threadjacking got old fast.

    • 0 avatar

      Autotrader offers our local customers a trade in value online. They even get a guaranteed coupon for it’s value, and if we don’t want it, Autotrader cuts us a check and they buy the car! Awesome job Mr. Customer, by complaining that you don’t like to negotiate you guarantee you get ripped off! People work way too hard to try and get a good deal, but the day we switch to no-negotiations is the day I become a very rich salesman.

    • 0 avatar
      cwallace

      “Imagine the chaos if an OEM attempts to undermine its own dealer base.”

      I don’t know, I would welcome the “chaos” of conducting a transaction where each step wasn’t crafted as an opportunity to wring a few extra dollars out of me. Let me have a test drive and then go conduct all the F&I stuff online, and you’ll see me again for the maintenance.

      • 0 avatar

        You think you would welcome it but you have no idea what would happen if an OEM attempted to back stab its own distribution network. Dream on.

        • 0 avatar
          jetcal1

          “…you have no idea what would happen if an OEM attempted to back stab its own distribution network.”
          Let’s see,
          1. The OEM’s screw around with the holdback.(Lincoln)
          2. Screw around with the finance rates for those dealers unable to pay for their floorplan in cash.(GM)
          3. Set up arbitary sales goals (“Contests”) that are specifically designed to prevent individual dealerships from making goal. (Thus avoiding paying the prize.) (Acura/GM)
          4. In mid-stream reduce reimbursement for warranty repairs to approx 75%. (Chrysler)

          While I bemoan the changes I have seen in the stores over the last 45 years, I hold the OEMs partially culpable for these changes.

    • 0 avatar
      Grunt

      Hit the nail on the head sir on the trade-in part. The rest not so much.

    • 0 avatar
      suspension guy

      You have shown good reasoning and excellent understanding of the subject. I read most of your posts here, but may have missed something. Can you explain why dealers are better for the consumer than buying direct?

      My experience is that I have been able to get great deals from dealers. What has baffled me is how they manage to waste so much of my time and eventually have me pissed off – after the deal is done (I always pay full price at closing)-lol!

      Thanks, John

  • avatar
    sunridge place

    At the risk of unleashing a Ruggles attack….this is really a non-event.

    Its a link on the dealerships website not the OEM website. It acts like a lead source much like a Request A Quote. If they customer wants to go all the way through the process and apply for credit etc..they can. Or they can bail out and go more traditional.

    Here’s what it looks like..on the top toolbar.

    http://www.sawyerschevy.com/

  • avatar

    http://www.thecarconnection.com/news/1087492_gm-follows-teslas-lead-plans-to-sell-directly-to-online-shoppers#src=10065

    • 0 avatar
      sunridge place

      Wow…incorrect information on an automotive blog? No way!! That’s unpossible!!!

      The linked article is incorrect…period. This process happens 100% on the dealerships website…not the OEMs.

      • 0 avatar
        Pch101

        “The linked article is incorrect…period.”

        The article describes it as a lead generator for dealers that choose to participate. The text is correct, but the references to Tesla are misleading.

        • 0 avatar
          sunridge place

          Incorrect headline
          Incorrect comparison to Tesla
          Incorrect that this will be on OEM websites
          Incorrect that the shopper will not realize he’s dealing with a dealer

          Besides that. Its an accurate article.

          • 0 avatar

            The linked article was a response to an article in the WSJ which was ALSO full of inaccuracies.

          • 0 avatar
            sunridge place

            I read the WSJ article. It wasn’t incorrect. The carconnection.com one was riddled with factual errors.

            Not all automotive blogs are built equally.

            TTAC robot did well on this one and didn’t assume that this is an OEM attempt to sell direct to the customer. Jack/Derek seem to have the robot calibrated well on this one.

  • avatar
    Kenmore

    “People still want a relationship”

    Eew.. Ruggles-y.

    A few combative egotists and abuse-junkies do not speak for the rest of us.

    • 0 avatar

      The “rest of you” is such minority no one will pay any attention to you. You concentrate in one spot and think there are more of you than there are. The point about consumers wanting a relationship was not mine, but a rather natural observation by someone after seeing that out of 900 “Click Customers,” only 5 completed their deal without dealership involvement. That should even tell YOU something. But feel free to be one of the “5.”

  • avatar
    azmtbkr81

    Sites like TrueCar have been offering this exact service for some time now but I have heard mixed reviews from those who have used it. Hopefully GM will have better luck reigning in those dealers who still resort to their old tricks.

    While this system may not work for buyers who can’t bear to have the dealer make a cent of profit I would gladly pay a premium of a few hundred dollars to avoid having to endure the usual dealership shenanigans. I suspect those who don’t want to drive away in their new car feeling like they just went 3 rounds with Cain Velasquez probably would too.

    • 0 avatar

      Why would GM be doing anything? The consumer doesn’t have to negotiate. GM doesn’t own or run the dealerships. For those who want help buying a car, I suggest hiring a broker or an agent. OR visit a One Price store.

      • 0 avatar
        azmtbkr81

        TruCar doesn’t seem to have the clout necessary to stop dealers from playing the usual games with customers who have agreed to a price using their website. In the end these consumers still have to negotiate and are subject to the same dirty sales tactics they would encounter having walked in off the street. If GM is behind this effort hopefully they can put a stop to these practices and put pressure on dealers who aren’t honoring the online agreements. Sure the dealers could choose to ignore GM but it has been my experience that pissing off your suppliers is generally a bad idea.

        • 0 avatar

          Not only is GM behind this effort, they have been behind MANY efforts previously. Being behind it doesn’t mean they are selling direct to the public. It doesn’t mean they control their dealer body. They don’t own them. They don’t have the money to own them. What online agreements? Have you seen one?

          Pissing off your customers is generally a bad idea. Dealers are the only customers an OEM has. The end user is the customer of the dealer. This year will piss of consumers to the tune of about 16 million new vehicle sales.

          • 0 avatar
            azmtbkr81

            Yes I have seen these agreements and you can too at the TruCar website. Of course TruCar is in it to make money and that’s the real problem isn’t it? They aren’t powerful enough to punish dealers who don’t play ball without risking a large chunk of their revenue.

            So basically what you are saying is that GM is complicit in the dealerships’ trickery and deceit and the promise of a “hassle-free” “pressure-free” and “worry-free” experience is simply a ruse to steer more traffic into dealerships?

            Why would GM risk their reputation if they weren’t willing to back up these claims? I am potentially very much a customer of GM, in fact GM has an entire website and list of 800 numbers dedicated to customer care. If they receive a flood of calls from customers claiming that dealers are not honoring the pricing on their new website I have to think that they are going to do more than laugh at the fools who were stupid enough to believe they’d receive a real price online. The last thing GM needs right now is another PR debacle.

    • 0 avatar

      RE: “TruCar doesn’t seem to have the clout necessary to stop dealers from playing the usual games with customers who have agreed to a price using their website.”

      TrueCar has clout. TrueCar can discontinue its relationship with a dealer who doesn’t follow its rules. But then, TrueCar will lose the $300 per transaction they receive from the dealer for sold referrals too. Or perhaps you thought TC isn’t in business to make money?

  • avatar
    neonturbo

    It is not as complex as Ruggles makes it out to be. Drive car, like the car, buy the car. I did all my research mostly online, selected the vehicle I liked, found the vehicle in stock at the local dealer through the mfg website, got my credit union financing, and emailed the online sales rep that I would be coming in the next day to finalize paperwork. I should have been out of there in 20 minutes.

    I had to sit 4 hours and play their numbers game even though I was paying sticker (two loyalty/previous owner rebates though), I wasn’t negotiating price, and there was no trade-in. Then we played games with all the undercoating, glass etching, warranty extensions, and all that crap they try to pull for another hour. Meanwhile they are running my credit report 25 different ways with every fly-by-night finance company even though I have a check in my hand (thanks for dragging down my 750+ credit, jerks). They seemed to making everything as long and as difficult as they possibly could. Once I got done with the salesman, I then had to deal with finance manager, sales manager, and about 3 other people even before I could see the car.

    Just a year earlier I had a great dealer where I ordered a car, they called a few weeks later to tell me it was in. I called the credit union who sent an electronic payment of some type to the dealer, and I walked out in 20 minutes after two signatures. Unfortunately Chrysler decided this was a bad dealer that had to be closed. My family and I had purchased close to 2 dozen cars with this same excellent service at each transaction. None of the games, none of the holding you hostage, or any of the other dirty games.

    I would be so happy if I could buy online. No horrible salespersons who don’t know anything about cars, what an option is, or those stupid things they say and do (what would it take to get you into this car today?). ACKKKK! The future is online transactions, and similar methods (buy at Sams or Costco or your bank) should have been available in the past. I have better things to do than to negotiate for 4-5 hours to save $500.

    • 0 avatar

      RE: “It is not as complex as Ruggles makes it out to be. Drive car, like the car, buy the car.”

      And you would know this how?

      • 0 avatar
        neonturbo

        OK, you seem to have some insight, you have repeatedly said that car transactions are complex, yet you give no details of how complicated things really are. Can you explain these convoluted details to an idiot like me? Sure seems like ME doing all the leg work and YOU (the salesman) simply having me sign one bill of sale and one tax receipt is so crazy complicated nobody can understand it.

        Also why did one dealer make car buying as smooth as silk dozens of times over the past 20 years, and another dealer make things as horrible as possible? Same brand, same basic region of the state, I had the same credit union, and I tell them the same requirements outright every time I buy. Sticker price, I want advertised rebates, my financing, no add-ons.

        I repeat, this all should have been able to be handled online, except picking up the car, and signing the bill of sale and/or signing financing paperwork.

        • 0 avatar

          RE: “OK, you seem to have some insight, you have repeatedly said that car transactions are complex, yet you give no details of how complicated things really are. Can you explain these convoluted details to an idiot like me? Sure seems like ME doing all the leg work and YOU (the salesman) simply having me sign one bill of sale and one tax receipt is so crazy complicated nobody can understand it.”

          NO car deals are so simple. Every customer has to be offered a service contract as a CYA. Same with credit insurance. There are odometer forms for both new vehicle and the trade. If the trade has a payoff, that has to be dealt with. There are all sorts of FTC and TIL considerations and the forms to go with them. If the car has any accessories there are forms for the warranties on those. Rebates and incentives all have forms associated with them. Financing brings a whole new level of complexity. Only about 25% of consumers have fast track credit scores. The list goes on.

          RE: “Also why did one dealer make car buying as smooth as silk dozens of times over the past 20 years, and another dealer make things as horrible as possible?”

          That’s why YOU get to shop to find the dealer that satisfies you.

          RE: “I repeat, this all should have been able to be handled online, except picking up the car, and signing the bill of sale and/or signing financing paperwork.”

          Maybe so. Perhaps if more consumers would support this model it might actually gain traction. But there will be no buying direct from the OEM. Forgetaboutthat. OEMs aren’t about to undermine their own dealers.

        • 0 avatar

          Oh, and your lender might want to have a lien registered. The list goes on.

          35% of consumers are either sub prime or BHPH candidates. Perhaps 25% are fast trackable. Everyone else (about 60%) requires additional complexity in their financing. This means additional documentation like tax returns, pay stubs, copies of leases, etc. etc. Dealers are often able to arrange financing for customers who can’t get it on their own. That’s why at least 65% of all auto finance is done at the dealership level.

          The 25% can buy anything from anybody. They are the only ones who might be able to buy online without a dealer visit. YET, they are exactly the ones who PREFER to negotiate to get a better deal.

          Do the math. Most of the whiners are those who aren’t fast trackable and get upset when a dealer has to tell them stuff they don’t want to hear on behalf of the lender financing their deal.

    • 0 avatar
      Pch101

      “I have better things to do than to negotiate for 4-5 hours to save $500.”

      From what you described, you spent four hours negotiating, yet you paid sticker. For most cars, that means that you overpaid by at least a grand, and possibly much more than that.

      A well-managed haggle should take an hour or less, and should save you considerably more than $500 in comparison to sticker. If you spend four hours dickering at a dealership, then you’re doing something wrong.

      • 0 avatar
        neonturbo

        I didn’t want to negotiate, they were forcing to get me to “negotiate” with all the add on junk they were trying to sell to me and all the “terrific financing” they were trying to get me to sign. I sat there for that long repeatly telling them I wanted the vehicle as is, paying sticker, and only the two advertised discounts. I said “NO” probably 50 times that day, and I couldn’t get it through that idiot salesman’s head that I wasn’t buying any extras of any type. He “had to” give the full sales pitch or “he would be fired”. I know that is a trick, and I guess I fell for it in some way, but I still wasn’t going to purchase fabric protection or whatever snake oil they peddle.

        I should have walked away, but they were the only ones in a 200 mile radius that had the exact vehicle I wanted.

        • 0 avatar
          Pch101

          The negotiation begins the moment that you walk on the lot. And it happens whether you like it or not.

          Car sales are what they are. If you offer to pay top dollar, then you can expect them to counter by demanding top dollar, plus fifty more cents. You would have been better off had you accepted the game for what it is and played to win.

          Unless you’re buying a very hot car (which is unlikely), you should be focusing on the invoice, rather than the MSRP, and put the incentives into your pocket instead of theirs. Voluntarily paying sticker just marks you as a sucker who can be taken for more.

          • 0 avatar
            azmtbkr81

            “Car sales are what they are.”

            That’s the problem, no one should have to be a master negotiator to receive a fair price on a purchase as small as a car.

            The sales model is antiquated and seedy. It has been amazingly resistant to change over the years but chinks in the armor are thankfully starting to appear.

          • 0 avatar
            Pch101

            “no one should have to be a master negotiator to receive a fair price on a purchase as small as a car.”

            Negotiation is a natural part of life. It benefits you to know how to do it

            You don’t have to be a master at it, you just have to be reasonably competent at it. Again, it benefits you to be able to do it.

            Instead of residing in the world of coulda-woulda-shoulda, you’re better off living in the world that is. And negotiation is not only easy, but it’s actually enjoyable if you have fun with it.

            Resenting it only helps Ruggles and his buddies, not you. Seriously — if you are unwilling to adapt, then you are only being your own worst enemy. This system is designed to exploit those who try to fight it.

            “The sales model is antiquated and seedy.”

            It isn’t antiquated. It works for the automakers, which is why Henry Ford implemented the franchise model for car sales and why we still have it.

          • 0 avatar
            Hummer

            I disagree AZM, if you were around me for a while you would probably get annoyed, I try to negotiate anything that is over $100 (in situations the seller has the ability to offer a better price) or when something has labor rates attached to it.

            People love to talk how somethings simply don’t matter, “oh big deal you saved $20″ etc, but when you start adding the savings you have a real chunk of cash.
            Plus you never know, a couple months ago I wanted to bore an intake over to accept a larger throttle body, 2 shops were around $200-250, went to another shop he quoted $175, and I talked him down to $80, he did a perfect job and I saved ~ $100.

          • 0 avatar
            azmtbkr81

            The dealership model may have worked well in the past but its days are numbered. If Elon Musk thinks the dealership model is outdated who am I to argue? Dealerships pay millions of dollars every year to lobbyists to protect them from competition. Why bother if their business model could stand on its own two feet?

            Younger generations have zero interest in visiting a dealership. They want to go online, find the best price, complete all of the paperwork and payment online and have the damn car delivered to their door.

            I buy everything online: appliances, clothing, food, car parts, etc. why shouldn’t I be able to do that with a new car purchase? I’ve found that when I do attempt to negotiate a better price at a brick and mortar store that I am rarely able to best the prices that can be found online and I’ve wasted time, gas, and patience to do so.

            I do know how to negotiate and have to do so on a semi-regular basis as part of my job but I don’t enjoy it unless I am being paid. If I can find the best price with a few mouse clicks and e-mails I’ll choose that every time.

            Haggling and trickery seems like such an arbitrary and inefficient way to sell a car, maybe they should give you the option to play one on one basketball with the salesman instead?

          • 0 avatar
            Pch101

            “If Elon Musk thinks the dealership model is outdated who am I to argue?”

            Elon Musk hasn’t sold many cars, and he hasn’t produced anything more than one quarter of paper profit. Counting your chickens before they hatch isn’t a good way to analyze the business model.

            Manufacturers of most products don’t want to spend billions of dollars owning and operating stores. It’s easier for them to focus on production, and allow someone else to retail the product.

            The motivations that Henry Ford had to push the inventory management problem onto someone else while avoiding the overhead costs of retail still apply today. It’s takes money and management resources to operate a retail chain, and a PITA for someone whose talent lies in production and B2B sales. Tesla’s situation is unique because it is small, and this company-owned model would be too costly if it sold as many cars as the established automakers.

            “Dealerships pay millions of dollars every year to lobbyists to protect them from competition.”

            What they don’t want is to have billion-dollar automakers to cherry pick their best locations once the dealer has gone to the trouble of establishing them. That’s understandable for them — they spend a lot of money to own their stories, and they have a lot to lose if their supplier turns into a competitor.

            “I do know how to negotiate and have to do so on a semi-regular basis as part of my job but I don’t enjoy it unless I am being paid.”

            If you’re any good at haggling, then I’m willing to bet that the money that you would save from an hour of negotiation would exceed what you earn over the same period.

            If you don’t want to negotiate, then it’s your loss. The winner in that situation is Ruggles and his friends, not you.

          • 0 avatar
            wsn

            azmtbkr81 “That’s the problem, no one should have to be a master negotiator to receive a fair price on a purchase as small as a car.”

            You don’t need to. Just Google the invoice and add $500 to it. Call the dealer with that price and drive there only if they agree. If they change terms, drive to the next dealer.

            See, the whole process doesn’t need you to be a master negotiator. You only need to spend 1~3 hours, which you have to no matter what.

          • 0 avatar
            azmtbkr81

            @WSN – That doesn’t sound like a very fun way to spend a Saturday but you are right, that is the way we are currently forced to buy cars. I’d much rather sit down for an hour with a cup of coffee, click through the options I want, pay a set price, and then go for a bike ride.

            @Pch – Musk has had a pretty successful track record so far, if anyone can can turn the industry upside down it is him – and I hope he does it. If he were as small potatoes as you seem to think he is why is he barred from selling cars in Texas? Clearly the dealerships there find something to be afraid of.

            I agree with you about the reasons the dealerships pay lobbyists but I don’t agree that it is right. By doing so they are artificially limiting competition and we as consumers suffer for it – that sucks.

            Just because I don’t like haggling doesn’t mean I don’t do it when I need to. It puts me in a bad mood and basically ruins what should be an exciting and fun experience, thus I am willing to pay a premium, albeit not an exorbitant one, not to have to spend a Saturday surrounded by a bunch of shysters. Hopefully Musk and GM will pave the way to allow me to do just that.

          • 0 avatar
            Pch101

            “Musk has had a pretty successful track record so far”

            The company hasn’t made any money. And it can’t expect to be profitable at such low sales volumes.

            There are reasons why established, profitable automakers have large stores, and many of them. Tesla is a pimple on the backside of the industry; it doesn’t provide many insights as to how to operate a larger, viable and profitable automaker.

            “By doing so they are artificially limiting competition”

            Company-owned stores are less competitive. You can’t play off one Tesla dealer against another, since there aren’t any.

            “Just because I don’t like haggling doesn’t mean I don’t do it when I need to.”

            If you don’t haggle, then the loser in the transaction is you. Refusing to haggle is just shooting yourself in the foot, and only helps the retailer.

          • 0 avatar
            azmtbkr81

            “Tesla is a pimple on the backside of the industry”

            I’m sure that’s exactly what Boeing and Lockheed said when Musk started Space X.

            I’m not suggesting that the company store is the only option, although if it were competition would still be alive and well. With the auto market tending toward one size fits all commodity CUVs competition would be driven by other manufacturers, not dealers, with essentially the same results.

            What I have in mind would be a internet-only auto dealer that maybe has a small showroom in major cities for test drives but no inventory in stock. You’d eliminate the expense of having a showroom in every podunk town, large sales staff, and keeping inventory on hand. Vehicles are drop shipped from the manufacturer or from a regional distribution center to the consumer at considerable savings. Those who absolutely must have a car today can go do battle with the wolves at the traditional dealership.

        • 0 avatar

          Just say NO and walk away. A GREAT negotiating strategy.

          • 0 avatar
            ktm

            I truly don’t understand how any of the “Best and Brightest” are spending 4 hours negotiating with a car dealer. Here’s a tip:

            1) Test drive cars you like to find the make and model you want to buy.
            2) Go to multiple dealerships websites.
            3) Find link to On-line Inventory.
            4 Find car you like with options you want.
            5) Click Get Quote. Print out quotes from all dealerships. Quotes are almost always for invoice or maybe slightly over/under.
            6) Call dealership and speak with Internet Sales Manager and arrange time to go in and buy the car.
            7) Drive new car home.

            I’ve purchased 5 cars this way for my immediate family, even remotely for my mother who lives on the other coast.

  • avatar
    jmo

    Who negotiates these days?

    Me: “What do you think of invoice – $1000 in owner loyalty”

    Sales guy: “Sounds good to me.”

    Helping a friend buy a car.

    Me: “How about invoice?”

    Sales guy: “That works.”

  • avatar

    horror stories aside, the general public will most usually prefer Stop-Pick-Drive visits at their local storefront.

  • avatar
    Vulpine

    Not good enough; it still forces the buyer to settle for whatever is on the dealer’s lot, not order a-la carté direct from the manufacturer. This also means that any dealer mods–things the dealer has done to ‘enhance value’ (and price) are already on these vehicle and therefore impossible to remove in many cases. After all, it’s hard to say “NO undercoating” once the dealer has already sprayed it on as an example. Dealerships also tend to order at both extremes of the model lineup–either base-models with no or minimal options or glitzed out with every option in the book. Rarely will you find one in between.

    This will not work.

    • 0 avatar

      You order a car and get what you want if you don’t want what’s in stock. That’s how it works. Important dealers have to settle for vehicles the way the OEM wants to build them.

    • 0 avatar

      Not good enough for what. The industry adapts to the majority, not exceptions. They can’t satisfy everyone. Between dealers and OEMs they build what most people want. If you want a custom order, order it and wait for it. OR find something else to be satisfied with. I don’t know how many times I have to explain this, bu the industry has enough to do to satisfy the majority of consumers without spending resources fussing over the incorrigible whiners. If the shoe fits …..

  • avatar
    Robbie

    Ruggles: I just want to buy a VW GTI, will pay cash, and will donate my old car to my daughter. Why on earth do I need a dealership? I am happy to click and purchase.

    • 0 avatar

      Do you expect the industry to chage to adapt to the exception to the rule? Where would you get a new GTI if not from a VW dealership?

    • 0 avatar

      Do you expect the industry to change to adapt to the exception to the rule? Where would you get a new GTI if not from a VW dealership?

      • 0 avatar
        Robbie

        I’d be happy to pick it up at a warehouse 200 miles from here, or have a truck drop it off in front of my house. This GTI would have been bought a while ago already, if it weren’t for the dealership experience and the impossibility of a “normal” hassle-free sale. It’s the manufacturer’s loss. I don’t think Apple forces its customers to go through hour long bouts of dimwitted negotiations with dealership crooks before I am allowed to buy my Macbook at an Apple store.

  • avatar

    RE: “Author: azmtbkr81
    Comment:
    The dealership model may have worked well in the past but its days are numbered.”

    So you say. I don’t think so. You obviously haven’t thought this through, probably because you don’t understand the issues.

    RE: “If Elon Musk thinks the dealership model is outdated who am I to argue?”

    Just curious, but where did he ever say it is outdated. Is HE in for a shock UNLESS he has no visions of moving out of his niche.

    RE: “Dealerships pay millions of dollars every year to lobbyists to protect them from competition. Why bother if their business model could stand on its own two feet?”

    Exactly what competition are they trying to protect themselves from?

    RE: “Younger generations have zero interest in visiting a dealership. They want to go online, find the best price, complete all of the paperwork and payment online and have the damn car delivered to their door.”

    People in hell want ice water too. I see young people in dealerships all the time. Are YOU the self appointed voice for “young people?” “Young people” tend to NOT have fast track credit scores and have oodles for school debt. They have limited experience in the business world, but think they know everything. Hey, I was that age once too. They are more a threat to move back in with their parents than they are to change the world in the next few years. If they don’t see the difference between finding some credit line on a credit card and buying a vehicle, they aren’t likely to move out of the mail room at whatever place they work. So are they going to pout if they can’t get what they want? The industry will take them more seriously when they become serious themselves. Perhaps they will take advantage of GM’s new program. Maybe the 5 out of 900 who did car deals from start to finish were young people? :)

    RE: “I buy everything online: appliances, clothing, food, car parts, etc. why shouldn’t I be able to do that with a new car purchase?”

    When you figure that out perhaps your company will reward you with a management position. Until then, I don’t think so.

    RE” I’ve found that when I do attempt to negotiate a better price at a brick and mortar store that I am rarely able to best the prices that can be found online and I’ve wasted time, gas, and patience to do so.”

    And they take trade ins and arrange financing too, I’m sure. Big difference between gadgets and vehicles. Big difference in the paperwork required too.
    RE: “I do know how to negotiate and have to do so on a semi-regular basis as part of my job but I don’t enjoy it unless I am being paid.”

    Good for you. Now if you learn the elements of business you should have a rewarding career.

    RE: “If I can find the best price with a few mouse clicks and e-mails I’ll choose that every time. ”

    So you will take advantage of the new GM program? Maybe YOU can be one of the 5 out of 900 participants in that program who actually took the program from beginning to end.

    RE: “Haggling and trickery seems like such an arbitrary and inefficient way to sell a car, maybe they should give you the option to play one on one basketball with the salesman instead?”

    I thought you said you negotiate in your job? Do you also take trade ins and deal with complex financing issues?

    • 0 avatar
      azmtbkr81

      “You obviously haven’t thought this through”

      What is the average age of new car buyers these days? Mid 50s or so? The auto industry is a trailing indicator of consumer preferences simply due to the fact that the average customer age is so high. Older folks don’t mind buying cars in the traditional way – I’ll give you that. How many new purchases do you think they have left – 2 or 3 at best? This momentum may carry the traditional model for another 15 years or so but as the younger generations start to enter the market in earnest the model will change. It has for every other retail industry on the planet and to think that the auto industry is immune is really nothing more than arrogance.

      “People in hell want ice water too”
      That’s a good one but hopefully not the customer service advice you dispense to your clients.

      “I see young people in dealerships all the time. Are YOU the self appointed voice for “young people?””
      That’s because they don’t have a choice not to be. Don’t take my word for it: If iPhone sales, Facebook, Twitter, and every person you see under the age of 35 with their noses glued to a smartphone aren’t enough to convince you that their worlds revolve around online interaction I don’t think anything will.

      “Exactly what competition are they trying to protect themselves from?”
      Online dealerships and factory owned dealerships are the two that come to mind.

      “When you figure that out perhaps your company will reward you with a management position. Until then, I don’t think so.”
      No need, seems as though GM and Tesla are off to a good start, I guess we’ll see just how deep the dealership pockets really are.

      So you will take advantage of the new GM program?
      Not likely, not much of a GM guy, but if Ford offered a similar program I most certainly would.

      “I thought you said you negotiate in your job?”
      I do, but I don’t haggle over minutea like vin etching and fabric spray that I never requested in the first place. My re-sellers sell me what I need and nothing more and honor their quoted prices. If any of them attempted the dirty tricks that are commonplace in car dealerships all it would take would be one call to the manufacturer’s rep and that re-seller would have a very bad day indeed.

      • 0 avatar

        RE: “Author: azmtbkr81
        Comment:
        “You obviously haven’t thought this through”

        What is the average age of new car buyers these days? Mid 50s or so? The auto industry is a trailing indicator of consumer preferences simply due to the fact that the average customer age is so high. Older folks don’t mind buying cars in the traditional way – I’ll give you that. How many new purchases do you think they have left – 2 or 3 at best? This momentum may carry the traditional model for another 15 years or so but as the younger generations start to enter the market in earnest the model will change. It has for every other retail industry on the planet and to think that the auto industry is immune is really nothing more than arrogance.”

        I’ve watched it for 40 years. One thing is an almost universal characteristic about the young. They move from inexperienced to experienced over time. You are great with the predictions without understanding the basics of business. As the inexperienced learn about business their level of understanding as a cohort will improve. At some point they will learn how business works. The ones that don’t will remain mundane employees working for their more enlightened brethren. It worked that way in my era too. I too was a youngster, wide eyed and full of idealism. Once I learned how the business world worked, I became an effective manager and moved on from that point.

        But let’s assume you are right as a matter of exercise. Exactly how would the transition take place? That’s what you haven’t thought out because you don’t understand why it is the way it is. Now business relationships are in place. The OEM depends on the dealer body. You don’t even understand the math of it all. It WILL change but not in the way you fantasize. Multiply 16000 times 20 million and tell me what you come up with. That’s a start.

        RE “People in hell want ice water too”
        That’s a good one but hopefully not the customer service advice you dispense to your clients.”

        In business, it isn’t practical to cater to the rank exception. You say you hate dealers and don’t want to negotiate. But what do most people do anyway? They try to negotiate.

        Explain to us how a dealer maintains a $3K average without charging some more than others. How do you think that would change if the OEM owned the stores? Or would you force build to order on the consumer? DO you have any idea how that would raise prices? Supplier costs are NEGOTIATED base on volume. The dealer inventory buffer enables that. That inventory buffer is financed BY DEALERS, not the OEM. They don’t have the money. Which OEM would go first to YOUR model? How would they get rid of the current dealer with which they have relationships? The list goes on and on. Again, you need to learn how the current system works first, IN TOTAL, not obsess over the tiny part of it you don’t like.

        RE: “I see young people in dealerships all the time. Are YOU the self appointed voice for “young people?””
        That’s because they don’t have a choice not to be. Don’t take my word for it: If iPhone sales, Facebook, Twitter, and every person you see under the age of 35 with their noses glued to a smartphone aren’t enough to convince you that their worlds revolve around online interaction I don’t think anything will.”

        They will grow up. You think this is the first conversation like this I’ve had in my life? What do you think I encounter when I lecture college classes? Again, gadgets are gadgets, and vehicles are different. Tradeins. Financing. Government Paperwork. Let’s start there.

        RE: “”Exactly what competition are they trying to protect themselves from?”
        Online dealerships and factory owned dealerships are the two that come to mind.”

        What scenario can you imagine that would induce an automotive OEM to compete with and undermine their own dealers? Why would they try that?

        RE: “When you figure that out perhaps your company will reward you with a management position. Until then, I don’t think so.”
        No need, seems as though GM and Tesla are off to a good start, I guess we’ll see just how deep the dealership pockets really are.”

        You prove my point. Tesla has a few months of accounting gimmick profits under their belt and YOU want to take a victory lap. That type of irrational exuberance won’t get you promoted in the business world. The GM program is NOTHING like what you imagine. They don’t control the prices. They merely created the software, or paid to have it done, and have asked dealers if they want to participate. Again, 5 out of 900. That should tell you something. To us market participants it only confirmed what we’ve been learning for twenty years. BTW, a real market participant isn’t someone who buys a car every few years. IN this context, it is people who participate as owners, operators, and other retail auto market professionals.

        RE: “So you will take advantage of the new GM program?
        Not likely, not much of a GM guy, but if Ford offered a similar program I most certainly would.”

        The Ford Collection offered a similar program over ten years ago. So did Priceline. Why wouldn’t you want to learn from those experiences? Maryann Keller supervised the Priceline experiment and put her heart and soul into making it work. She is humble enough to have learned many lessons from that financial disaster. There are still Ford execs around who have scar tissue from the Ford experiment. One of my best friends ran one of their stores in OKC. I was once a Ford dealer. I stay close to many of those people. I get my information first hand. I was in those Ford stores regularly. OK is my home state. Another friend owned one of the stores in Tulsa. That store was sold to Ford for the “Collection.” The same guy…. I’ve known him since Junior High School …. kept his Ford store just outside of the Tulsa market. I know exactly what happened.

        You seem to think that today’s young people are a lot different than other eras. Well, they do think they invented the Internet and it belongs to them… but the human nature hasn’t changed.

        RE “I thought you said you negotiate in your job?”
        I do, but I don’t haggle over minutea like vin etching and fabric spray that I never requested in the first place.”

        IF you truly know how to negotiate, then you know how to say NO and make it stick. Better go back to negotiating school. The best negotiators have the best careers. Might call Chester Karrass.

        RE: “My re-sellers sell me what I need and nothing more and honor their quoted prices. If any of them attempted the dirty tricks that are commonplace in car dealerships all it would take would be one call to the manufacturer’s rep and that re-seller would have a very bad day indeed.”

        That might be because your resellers have a different relationship with their OEM than dealers do with their OEMs. But as a practical matter, auto OEMS just don’t know how to retail cars. The older execs know this for a fact and have the scar tissue to prove it from having tried. The younger ones? Not so much.

        • 0 avatar
          azmtbkr81

          “That’s what you haven’t thought out because you don’t understand why it is the way it is”

          I haven’t? Here is how the transition would take place:

          -Car company X start selling vehicles online at set prices.
          -Joe Sixpack visits a dealership to examine and test drive the car he wants. The dealer has one or maybe a few of each model on hand. Joe can negotiate the SALE, not trade-in, of his existing car as a separate transaction with the dealership or with CarMax or whoever he chooses.
          -Joe places his order online at the manufacturers website and his car is built and shipped to the dealership. If Joe wishes to use the the manufacturer’s financing it can be completed online or over the phone, it works for the mortgage industry so why not the auto industry?
          -Manufacturer pays a fee to dealer to prep and clean the car.
          -Joe picks up his car at the dealership, hassle free, and takes it back to he dealership for repairs or warranty work.

          No middleman, no sales/trade-in/financing shell game, no maintaining the largest inventory in the Tri-State area. The dealership essentially becomes an authorized independent service center.

          Most dealerships claim that the don’t make much on new car sales anyways so how would this hurt them let alone threaten their existence?

          If the dealership model works in some areas fine – let them stay in business if they think that they can compete. Many industries do just that and it works well for the OEM and the reseller. To shut manufactures or online dealers out completely is uncompetitive and hurts the consumer. Let the market sort it out – not politicians and lobbyists.

          “Explain to us how a dealer maintains a $3K average without charging some more than others. How do you think that would change if the OEM owned the stores? Or would you force build to order on the consumer?”

          The OEM (or closely controlled reseller) would make a set amount of profit on each car sold with a sliding scale: higher percentage of profit for more expensive vehicles, custom orders etc. The average profit per vehicle wouldn’t change with an OEM dealership, although you’d eliminate the variability of pricing (which accountants hate) and eliminate the expenses associated with storing thousands of cars in inventory. Anyone who has taken a business 101 class since 1985 knows that storing, insuring, guarding, and otherwise tending to large amounts of very expensive inventory in the hopes that someone will stumble in and make a purchase is a horrendously inefficient and unpredictable way to run a business.

          “In business, it isn’t practical to cater to the rank exception.”

          Come on, you don’t really believe that there isn’t a high level of dissatisfaction with the way customers are treated by car dealers do you? I’m certainly not the exception. Spend 30 seconds googling “top consumer complaints” and auto dealers are at or near the top of ever single list. I’d love to hear your thoughts on how to change that one without redesigning the entire system from the ground up. Oh and I’m not buying the whole “the customers are idiots who don’t know what they want or say what they mean” schtick. I’d be booted out on my ass if I said that to my boss at any job I’ve ever held.

          “That might be because your resellers have a different relationship with their OEM than dealers do with their OEMs.”

          They do have a different relationship – the right relationship and I’m talking about companies that are as large as the largest of auto manufacturers. The concept of a manufacturer having zero control or input over the way their products are sold or who they are allowed to partner with makes exactly zero sense in any industry.

          “But as a practical matter, auto OEMS just don’t know how to retail cars.”

          Maybe, and maybe not all would choose to but what is the harm in allowing them to try if the traditional model is inherently superior? OEMs have tried time and time again only to be stonewalled by uncompetitive laws designed to protect the dealers.

          “Why wouldn’t you want to learn from those experiences?”
          Absolutely, but 10 years is a very long time and it doesn’t mean it should never, ever be tried again.

          “IF you truly know how to negotiate, then you know how to say NO and make it stick”

          Why bother with the theatrics when there are plenty of no-nonsense resellers who conduct themselves in a professional manner? I don’t have patience for people who don’t understand my business or who waste my time attempting to sell me things they know I don’t need. I simply choose not to do business with them.

          Unfortunately I don’t have that option when buying a new car so I and millions of others are stuck playing the game.

          Anyways, I’d done posting, must move on to other things. I always enjoy a spirited debate with a fellow Okie – I’m from Lawton. I don’t claim to be an expert on the auto industry but I am certain that my views on the state of the auto dealership are shared by many. Hopefully you’ll gain some insight from someone who is both an auto enthusiast and reluctant but hopeful customer of your clients.

          • 0 avatar

            “RE: “I haven’t? Here is how the transition would take place:

            I haven’t? Here is how the transition would take place:

            -Car company X start selling vehicles online at set prices.”

            Stop right there. Before going on to the next step, ask yourself what happens. You’re saying ONE OEM goes first and establishes a direct from the factory purchase option for customers, undermining its dealer distribution base, a few thousand independent businesses that have all made multi million dollar investments based on CONTRACTS and agreements with that OEM. Do you have a clue what happens next?

            Forget for a moment about the FTC, who will be up in arms immediately. Forget for a moment about the battalion of attorneys licking their chops. As a dealer, the first thing I do is put my OEM on notice. IF I was a smart dealer up to that point, I would have already taken on other franchises to support my facility in case on OEM faltered. One doesn’t want to get caught with a high dollar purpose built facility that is a white elephant without a viable franchise to operate out of it. If I hadn’t already done so, I quickly move to find any available franchise to buy. NOw would be a perfect time for Chinese brands to find eager dealers to give them a try. Or maybe I would buy out another dealer to replace the one who is in the process of backstabbing me. In the meantime, other dealers are taking similar strategies. The upshot is that the current dealers change their focus from trying to make their ROI from the renegade OEM and sales at that OEM drop precipitously, as does their market penetration and stock price. They are now losing money. The build to order model doesn’t sustain production OR product development as consumers turn to other products. After all, with dealers terminating and refocusing on other brands, where will I get my build to order whatever serviced? A declining OEM is going to build service facilities operated by employees when it can’t even sustain product development?

            Don’t worry. Heads have already rolled and your forward thinking OEM has already rolled back its foolhardy plan and promised not to back stab its partner dealers ever again.

            The idea that current dealers sit idly by while their OEM back stabs them is naive beyond belief. ANd I haven’t even touched on the shit storm of legal activity, led by restraining orders, to be brought by any OEM to be so foolhardy as to break contracts in place. Those contracts have NOTHING to do with any franchise law. They have to do with contract law.

            Then there is the matter of common sense. With ALL OF THE PREVIOUS failures of trying to create a “One Price” selling environment for consumers, what OEM exec would think of having his/her name on such a stupid move. Roger Smith is universally reviled in the industry for the stupidness of his moves while at GM, which set the stage for its eventual demise. Who might want to take his place is the stupidest auto CEO of all time? You might get Dan Ackerson to try such stuff, but his board wouldn’t let him. His heir apparent, MArk Reuss? He’s a real car guy. No possible way. Ford has already learned its lesson. Toyota? The same. I was part of their grand experiment in Japan, in that I told them exactly what would happen before it happened. Their bid, however, was through its own dealers. Toyota wouldn’t think of undermining its partner dealers. NEVER.

            Bottom Line. It ain’t happening.

          • 0 avatar

            RE: “Anyone who has taken a business 101 class since 1985 knows that storing, insuring, guarding, and otherwise tending to large amounts of very expensive inventory in the hopes that someone will stumble in and make a purchase is a horrendously inefficient and unpredictable way to run a business.”

            Anyone who knows anything about car buyers knows instant gratification is what its all about.

          • 0 avatar

            If you are from Lawton I understand your frustration with your local dealers. Frankly, I can’t recall ever having encountered such a hot spot of dealer incompetence. There has been a record of preying on service people in that town and I hope those dealers get served their heads on a platter.

            You must be fairly young not to remember the disastrous Ford experiment, which played out largely in our homes state.

            BTW, the Monroney Label is a product of OK Senator Mike Monroney, something people have forgotten about over the years.

  • avatar

    RE: “By doing so they are artificially limiting competition and we as consumers suffer for it – that sucks.”

    Who exactly is artificially limiting competition?

  • avatar

    RE: “Why would GM risk their reputation if they weren’t willing to back up these claims? I am potentially very much a customer of GM, in fact GM has an entire website and list of 800 numbers dedicated to customer care. If they receive a flood of calls from customers claiming that dealers are not honoring the pricing on their new website I have to think that they are going to do more than laugh at the fools who were stupid enough to believe they’d receive a real price online. The last thing GM needs right now is another PR debacle.”

    You are not a customer of GM. You are a customer of the dealer handling GM cars. Same with all OEMs. GM has NO INFLUENCE on how dealers price their vehicles. IF they did, and dealers played along, the FTC would come down on them like a ton of bricks. Like I said in an earlier post, once you learn the basics of business your company might have a management position for you. Until then, probably not.

    • 0 avatar
      azmtbkr81

      Nowhere in my post did I suggest that GM would influence the price of the sale, only that they would exert pressure on dealers who fail to honor the prices they’ve committed to online. In other words GM would encourage dealers to cut the games and shady sales tactics that give them and by extension GM a bad name. That has been my point from the beginning and I don’t know how I can make it any more clear. The car industry is the only one I know of where verbal and written agreements can be made and then ignored with such reckless abandon. It is a huge problem and one I find hard to believe that an “expert” is willing to defend.

      From a business perspective clearly GM has recognized a problem that you fail to see: people despise the new car buying experience and want it to change. Why else would GM bother spending millions to develop a website whose main purpose is to offer a “hassle free” experience. Ignore the customer at your own peril…there’s a little business 101 for you.

      • 0 avatar

        RE: “Author: azmtbkr81
        Comment:
        Nowhere in my post did I suggest that GM would influence the price of the sale, only that they would exert pressure on dealers who fail to honor the prices they’ve committed to online.”

        What kind of pressure? OEMs don’t get involved in that kind of she said/he said stuff. Imagine the chaos if consumers thought they could enlist the OEM in their negotiation with dealers. That would create a whole new kind of negotiating strategy on the part of consumers, one the OEM would tire of quickly.

        RE: “In other words GM would encourage dealers to cut the games and shady sales tactics that give them and by extension GM a bad name.”

        No, not hardly. Even the OEMs figured out LONG AGO that there is a small cohort of whiners who can’t be satisfied.

        RE: “That has been my point from the beginning and I don’t know how I can make it any more clear. The car industry is the only one I know of where verbal and written agreements can be made and then ignored with such reckless abandon.”

        Don’t you have attorneys in your city? Doesn’t your state have an attorney general’s office? A DMV? A consumer advocate department? You are trying to assert that verbal and written agreements are ignored with abandon in most or all dealerships, a “fact not in evidence.” Its just false. And anecdotes don’t make the assertion true.

        RE: “It is a huge problem and one I find hard to believe that an “expert” is willing to defend.”

        It is NOT a pervasive problem. There are HARSH penalties and financial retribution levied against such practitioners. And some of my best friends are involved in ferreting out examples and hanging them from the highest tree. There is such a thing as deterrence. This isn’t a day and age where business people want to take such chances. I suspect you have an overactive imagination and are trying to over reach your portrayal of events you probably didn’t understand. Maybe you should take an attorney with you to your dealer next time, document these things you say are pervasive, and let your attorney make the dealer buy next car for you as penalty for what you say they all do. You can probably find an attorney for $250/hr. Since you’ll catch ‘em “red handed” it sounds like a winning strategy to me.

        RE: “From a business perspective clearly GM has recognized a problem that you fail to see: people despise the new car buying experience and want it to change.”

        Again, people hate car dealers BUT LOVE THEIR OWN. The human nature with SOME people of not wanting to have to enter the arena with a chance for loss hasn’t changed since the beginning of time. Guarantee them a win, and they can’t wait to play. Name us a single business where the merchant’s costs have been made public knowledge? Name me another business where consumers think they are ENTITLED to know a merchant’s proprietary information. GM is trying ANOTHER experiment to try to satisfy a VERY SMALL number of people who make NO REAL DIFFERENCE in the big scheme of things. There will continue to be experiments. They had a similar experiment in CA about 7 years ago which didn’t work out. The numbers aren’t any better this time around.

        RE: “Why else would GM bother spending millions to develop a website whose main purpose is to offer a “hassle free” experience.”

        Who said they spent millions of dollars? Ford spent a LOT more than a few million in their failed attempt to satisfy those who cannot be satisfied. Some estimate that boondoggle at $1 billion, but it was easily hundreds of millions.

        RE: “Ignore the customer at your own peril…there’s a little business 101 for you.”

        Know what customers mean versus what they say is what’s important. You might need an advanced degree to understand that.

        http://wardsauto.com/blog/people-love-their-dealer-hate-yours

  • avatar

    RE: “Author: wsn
    Comment:
    Then just don’t trade in online.

    Purchase a car on line and sell your old ride via Craiglist. IQ requirement: 80.

    People buy $30k diamonds on Bluenile, I don’t see why they can’t buy $30k cars on an official website of an auto maker.”

    First things first. What is YOUR IQ? You want to sell your car on Craiglist and buy outright? How much more do you need to get for your car to equal the deal you get at your dealer? Show us your IQ?

  • avatar

    RE: “People buy $30k diamonds on Bluenile, I don’t see why they can’t buy $30k cars on an official website of an auto maker.”

    Because they won’t sell you one direct, that’s why. They don’t have a dealers license, for starters. They have a manufacturer’s license.

  • avatar

    RE: “What I have in mind would be a internet-only auto dealer that maybe has a small showroom in major cities for test drives but no inventory in stock. You’d eliminate the expense of having a showroom, large sales staff, and keeping inventory on hand. Vehicles are drop shipped from the manufacturer or from a regional distribution center to the consumer at considerable savings. Those who absolutely must have a car today can go do battle with the wolves at the traditional dealership.”

    Now THIS is a good one. It certainly won’t get you out of the mail room. But feel free to gather up some investors and give it a go. How would you go about getting a franchise from an OEM? How would you pay for the cars an OEM might send you? What would you do for parts inventory and a service department? What would you do with the trade ins? What would you do when you customer owes more on their trade than it is worth? What do you do if some other dealer has already been granted the territory YOU want? Surely you’ve thought these things through. You sound so sure of yourself.

  • avatar

    RE: “Author: Robbie
    Comment:
    I’d be happy to pick it up at a warehouse 200 miles from here, or have a truck drop it off in front of my house. This GTI would have been bought a while ago already, if it weren’t for the dealership experience and the impossibility of a “normal” hassle-free sale. It’s the manufacturer’s loss.”

    I’m sure the loss of one GTI is tearing them up, but YOU want them to think they are missing thousands of deals by not selling direct, right?

    RE: “I don’t think Apple forces its customers to go through hour long bouts of dimwitted negotiations with dealership crooks before I am allowed to buy my Macbook at an Apple store.”

    No they don’t, but then gadgets and vehicles don’t have a lot in common now, do they. There are some things I don’t like about iPhones. No replaceable battery and no micro SD slot. Do you think Apple is rushing to change these things for little old me? Hell no. They’ll send me down the street to buy an Android gadget because making the change doesn’t suit their plan. Get it?

  • avatar
    Beerboy12

    At least a web site will give me straight answers about the car I want to buy and not try to sell me something I don’t want…
    I often ask dealer sales people questions I know the answer to and show interest in extras I have not interest in just to amuse my self with the reply and the defeated look… Mean? I know… They are just people trying to make a living. I don’t object to them or their ways, I do appreciate other sources of the information I need though.
    Bring on the click / buy stuff, I say!

    • 0 avatar

      RE: Author: Beerboy12
      Comment:
      At least a web site will give me straight answers about the car I want to buy and not try to sell me something I don’t want…”

      Depends on the web site, now doesn’t it.

      RE: “I often ask dealer sales people questions I know the answer to and show interest in extras I have not interest in just to amuse my self with the reply and the defeated look… Mean? I know… They are just people trying to make a living. I don’t object to them or their ways, I do appreciate other sources of the information I need though.
      Bring on the click / buy stuff, I say!”

      Maybe you will be one of the 5 out of 900 who will actually use it from start to finish?

      • 0 avatar
        Beerboy12

        Mostly web sites tell me what I already know to, usually “no” to simple requests like “can I get it with manual and / or diesel”…
        Once you get passed the nonsense though, most web sites end up giving you the information you need, sales people are much harder work and very often just don’t or won’t give up the answers and very often make stuff up. This is my experience though and so I trust the interwebs more.
        5 out of 900 How about we watch that space for a bit?

  • avatar

    RE: “Author: suspension guy
    Comment:
    You have shown good reasoning and excellent understanding of the subject. I read most of your posts here, but may have missed something. Can you explain why dealers are better for the consumer than buying direct?”

    It makes no difference because OEMs set up the dealer network and aren’t about to screw with it. They certainly aren’t going to try to compete with the business people who invested millions to represent the OEMs products through sales and service. What would be the upside? What would be the downside?

    But in general terms, employees work for OEMs. Dealers are entrepreneurs. Employees trying to operate dealerships have failed miserably in past experiments. Even if the current system isn’t perfect in every way, there isn’t enough money in the world for the OEMs to buy out their dealers. Competition amongst dealers works in favor of consumers. The FTC likes it that way.

    But here we have a few who want to call Tesla transformative and successful after a few months of profits largely a result of accounting sleight of hand. I laud them for their efforts and results so far. I’d like them to succeed. But to succeed they will have to decide to either stay a boutique OEM or to try to achieve economy of scale via the mass market. The latter will require entrepreneurial investors as dealers. Auto manufacturing is incredibly capital intensive. Just designing a car and bringing it to market is a daunting and expensive task. To continue to invest in appealing new products over time involves huge capital investment and some home runs and some strike outs over time. Trying to establish a factory owned dealer network would mean Tesla would have to compromise greatly on both the R&D and distribution sides while eating up any cushion the company might have to weather a storm. Musk will go as far as he can, then sell out his company stores to real dealers for huge multiples, while still trying to maintain as much control as possible.

  • avatar

    RE: “5 out of 900 How about we watch that space for a bit?”

    I’ll be glad to. Did you watch the failed PriceLine experiment? The failed AutoBids Online experiment? The NUMEROUS Silicon Valley failed experiments? Are you watching TRED? Have you watched the history of One Price?

    You must think everyone thinks like you. There ARE a lot of young people, unschooled as they are in business, that can’t understand why vehicles can’t be sold like gadgets. Those folks aren’t in any position of authority in their companies so they don’t make enough money to be taken seriously anyway. IF they learn enough to become manager material in the real business world, they will have already learned why it doesn’t work. But there will always be a Silicon Valley wunderkind ready to finance the next big deal, however. Why don’t you find one of those guys to fund YOUR attempt. Then you can tell us about the experience. And we’ll watch for a bit longer.


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