By on June 5, 2013

Picture courtesy

Tesla’s Elon Musk found someone to blame for the lackluster sales of EVs, and the death of some EV makers: Car dealers, and their National Automobile Dealers Association NADA.

“The auto dealers association is definitely creating some problems for us, making it harder to get things done,” Musk said at Tesla’s shareholder meeting with Reuters taking notes. Tesla wants to sell its cars directly to consumers, which is against the law in most states. Attempts to have the law changed “met stiff resistance from dealer groups around the country,” Reuters says. Musk keeps trying.

Musk has said car dealers are bad advocates for electric cars because they rely mostly on gas-powered vehicles. Musk told shareholders that the traditional dealer model “didn’t work for Fisker, didn’t work for Coda. In the last 90 years, when did it work?”

NADA spokesman David Hyatt fired back:

“Industry experts say Fisker failed because it rushed its product to market before engineering problems were resolved. Coda did not receive government loans and was under-capitalized.”

“Thank goodness there are independent dealers left to try to help the customer. Manufacturers and brands may come and go, but the dealers are there for the long term.”

Car dealers are a very formidable lobby group. Fighting windmills would stand better chances.

Get the latest TTAC e-Newsletter!

57 Comments on “Musk Blames Car Dealers For Lackluster EV Sales...”

  • avatar

    I.C.E vehicles gain the electricity required to run their accessories simply by burning a tank of fuel. Fuel is nature literally packaging energy from the sun in a simple product for us to use.

    Electricity is a byproduct of fossil fuels.

    Nuclear power isn’t safe and is quite expensive – until compact cold Fusion someday becomes a reality.

    Gasoline/diesel/natural gas is simpler to produce, simpler to transport and simpler to refuel than electricity will ever be. With fossil fuels as the BASE of our energy economy, EV will NEVER be more efficient (and please don’t tell me how much more efficient electric motors are than I.C.E.)

    That being said, I do enjoy seeing Tesla improving, making new cars and increasing the value of the shares I bought at $27 a year ago. And I’m quite disappointed in the states making moves to limit their progress and innovation.

    Texas of all places should be doing their best to get EV into the infrastructure because they have so much land that receives direct sunlight. Here in NJ, I made a video about a nearby solar charging area that uses panels to cover what would otherwise be a sun blazing hot parking lot on a typical summer day. Why waste energy from the sun?

    The PLANTS certainly don’t.

    If people want EV, then they’ll DEMAND THEM. Thus far, people are content spending less than $40,000 on an I.C.E vehicle which in many cases offers more features than the Model S does.

    Why spend over $10,000 premium just to drive an electric car?

    • 0 avatar

      Because all the murder and mayhem in the middle east is due to oil. 9/11 is due to oil. 3 billion Chinese and Indians want oil. what else?

      • 0 avatar

        OH COME ON.

        You’re telling me the MURDER AND MAYHEM hasn’t been going on since LONG BEFORE we even HAD CARS IN THE FIRST PLACE???

        Don’t be so naiive.

        That comment sounds like pure LIBERAL “greener” anti-Bush propaganda.

        Keep in mind, Obama is pushing both the “green agenda” and the WARS simultaneously.

        • 0 avatar
          Dr. Kenneth Noisewater

          If they didn’t have oil, we wouldn’t be involved, or give two shits about how many of them killed each other.

          If it were up to me, we’d tariff oil to the point where its price dropped precipitously and the royals would either abscond to Switzerland with their ill-gotten gains or be butchered by radicals who would descend into camel-fuckery within a generation or be blasted by retaliatory drone strikes if they left their hell-forsaken Middle Eastern reservation.

    • 0 avatar

      “With fossil fuels as the BASE of our energy economy, EV will NEVER be more efficient (and please don’t tell me how much more efficient electric motors are than I.C.E.)” Umm, have you studied anything about thermal efficiencies with respect to the size of the power plant. A 1 GW thermal plant can have 2.5 times the thermal efficiency of a small internal combustion engine. Even accounting for losses from transmission, distribution, charging, discharging, and the electric motor, the EV is still around 50% more efficient than an ICE.

      Another way to put it, if we replace ever gas car with an EV, and took all of the gas and burned it in large centralized power plants, we’d use less gas every year than we currently do.

    • 0 avatar

      Is this a troll?

      The article has NOTHING to do with the merits of electric vs. ICE to power cars.

      It IS about how special interet groups (like NADA) effectively bribe legislators to creat and maintain monopoly/oligopoly markets for their memebers.

      In a free society, if I make a product, it’s my right to figure out how I want to sell it. NADA workd hard to prevent that from happening, to subvert the free market for the profit of their members.

      In so doing, they help corrupt the political process (not that it needs much help). What NADA is doing is just plain wrong, and we should stand up and say so. And expose the politicians who “rent” their votes for money.

  • avatar
    DC Bruce

    I wonder if Mr. Hyatt can cite an instance where a Fisker dealer “helped” the customer with his now-orphaned and apparently half-baked hybrid car.

    To the extent that all-electric cars require less maintenance than ICE-powered care, and that dealers rely on their repair shop to be profitable, maybe Musk has a point.

    But I don’t think the service requirements of Tesla cars are all that much less than of today’s ICE-powered cars. Engine oil changes are hardly a big money-maker.

  • avatar

    What is really the benefit to the consumer for forbidding manufacturers from selling directly to the consumer? I can buy a laptop from Dell, Lenovo, Apple and so on. I can buy a house from the builder. What’s so special about cars, other than their dealers have a powerful lobby group?

    Surely manufacturer-owned car stores can provide the same service at a cheaper price than having an independently-owned dealership. There’s still a need for a physical presence of course – you need to test drive and get it repaired and serviced.

    I’m sure some of the best & brightest can educate me, as I honestly can’t think of any good reasons these laws exist.

    • 0 avatar
      Dr. Kenneth Noisewater

      An argument could be made for forcing competition among 3 Big automakers to prevent them from applying cartel tactics on pricing, but that situation has passed a long time ago. There’s plenty of carmakers competing with each other now, and plenty of capacity to build cars (vs wartime restrictions), so any rationale for forcing a multitier system is long gone.

      Now it’s just incumbent special interests protecting their turf, at the expense of innovation and the customer.

      Musk is right, it needs to be ended. I would add lots of other lobbyist/special-interest driven carveouts and exemptions to that list as well.

    • 0 avatar

      I think that before communication technology became what it is today these laws probably made more sense. In the modern era phones and internet put customers in contact with each other, insurance companies, legal representation, government employees, media in general and so on…all of which has greatly improved the average buyers transaction confidence (and resulted in enforced consumer protection laws as well). Before all of this I would imagine it could be pretty easy to justify a law that ensured there was a local, responsible entity that could be held to account (or is within the customer’s sphere of influence at least). Also, before cell phones and road side call boxes that work breaking down was probably a far riskier proposition then than it is now (although it’s still pretty easy to die in some remote locations). So customers already knew that the products were going to break down (because all old cars did) and they knew that there was a non-zero chance of death due to exposure in that more rural version of America.

      Cars are the most expensive, necessary and dangerous thing that Americans buy, so I wouldn’t necessarily chalk the first of these laws up to dealer lobbying either (although they may well have been/probably were). Given the relevance of cars to voter’s livelihoods it makes laws regulating their sale an easy campaign point for public approval, while simultaneously pleasing a major local business presence and generating cash for campaigns. Inevitable in other words.

      All that said, they are totally counterproductive nowadays.

      • 0 avatar
        Dr. Kenneth Noisewater

        “Cars are the most expensive, necessary and dangerous thing that Americans buy”

        Houses. Most expensive, most necessary, and potentially most dangerous (deaths at home vs deaths on the road ;)).

        I don’t see laws forcing RE developers to have to use a franchise model to sell their properties.

    • 0 avatar
      el scotto

      Your 4th sentence says it all. Dealers have extremely powerful lobby groups at the state and national level. Do you know a former car salesperson? They may have left the business, but the owner is still funneling money into his pockets. The dealers aren’t going down without a fight. However, the car franchise laws are archaic and everyone hates most car dealers. Apologies to nullomodo and any other car dealer I’ve forgot on here. This could be a gubernatorial candidate’s issue.

    • 0 avatar

      Well these days we get the propaganda from left and right about how wonderful free trade is between countries and blocs. Get rid of tariffs has been the clarion call.

      Dealers are the tariffs between manufacturer and customer and inhibit trade. But dealers want to keep their “import duty” by existing.

      I’m with Musk on this one if I truly believe in freedom of trade. But I’m not sure – standards of living seemed better in many ways three decades ago.

  • avatar

    I don’t care for EVs, but the “independent” dealerships need to go down. Last time we discussed this, it turned out that they only destroy value while serving as a useful buffer for the carmaker in case of customer abuse and fraud.

    Toyota has a lot to answer for blowing their chance with Scion, when they decided that existing dealers were to sell it.

  • avatar

    EVs go against the business model of the dealers. The dealers make their money on services. If a car is no/low maintenance, there is no incentive for the dealer. To add to it, the dealer tries to trick/force people into buying cars and that is not the reputation Tesla wants.

    “Thank goodness there are independent dealers left to try to help the customer. Manufacturers and brands may come and go, but the dealers are there for the long term.”

    This is the funniest thing ever. How in the world will they “help” the customer exactly? If the manufacturer makes their own parts, is the dealer going to open up a factory and make the parts for you? There is nothing a dealer can do that any other service center can’t. Oh, right, the dealer can “help you” by ripping you off and selling you another car.

    • 0 avatar

      These “services” also include milking the buyer at purchase time. My “no haggle” price didn’t include the money they tried to make in the finance office.

    • 0 avatar

      Funny stuff. There is nothing the manufacturer can’t do for (or to) you that the dealer can.

      For example, if you have a Tesla S, you are required to pay for a $600 annual inspection every 12,500 miles or 12 months, whatever is first, in order to keep the warranty intact. So you are forced to purchase service from the mfg. service center in order to have a warranty.

      For your $600, you get a tire rotation, top up of washer fluid, replacement of wear items, such as wiper blades and brake pads. Wiper blades probably wear like on any car, but on a car with regenerative braking, pads wear extremely slowly. Even without regen braking, most cars’ pads are good for around 50k-60k miles. With regen, a Tesla S’s pads are probably good for like 80k, or what Tesla considers 6.4 years.

      So for $600 a year, you get a tire rotation, refill your washer fluid and maybe wiper blades. And if you are the type of person who wants to do this kind of thing on your own, TS.

      So I agree – a dealer is making its money on service, but a manufacturer’s own service outlets shoot a pretty good stick in that department, too. In fact, they shoot an even better stick, because an independent dealer cannot require to you pay for warranty coverage and deny you the right to do your own maintenance, but it seems (I’m sure this will be wrangled out in court) that the mfg’s own service dept. CAN.

      • 0 avatar

        Fordson, funny stuff but there is no 600$ maintenance requirement. Your behind the times, Tesla does not require it anymore.

        But if you do want Tesla to do maintenance, if you take a multi-year package its 425$ a year and it includes valet and ranger services.

        • 0 avatar

          What is ranger service? It has to be fun to justify $425 a year for service with a car that has been advertised as being low maintenance compared to an ICE car.

          $425 a year as part of a multi-year package implies a discount for the long term commitment. That makes $600 a year sound probable on a pay as you go. Are you saying that maintenance is no longer required for warranty continuation, so customers are just supposed to fork over hundreds a year to show what good customers they are?

          • 0 avatar

            As mentioned, it is optional. But some people like the hassle free convenience for their luxury cars.

            Tesla Valet Service
            Tesla is putting in place a valet service, so that your car is seamlessly picked up and replaced with a loaner and then returned as soon as we are done. There is no additional charge for this.

            Tesla Rangers Come to You
            Tesla Rangers are service technicians who make house calls. For an additional fee, they can come to your home or office to perform most maintenance and warranty repairs.

          • 0 avatar

            C’mon, Weapon. Tesla tried to make customers pay them $600 a year as a condition of keeping their warranties in effect, and they tried (are still trying) to make them pay multiple hundreds of dollars for service operations that a regular dealer would charge maybe $30 for.

            Nobody forced you to come on here and claim that regular dealers are such ripoff artists and that Tesla has such superior motivations.

            Go read some long-term tests of high-end sedans – I’m pretty sure that many of them have accounts of dealers sending valets to take the cars in for service and returning them. Will they do an oil change in your driveway? No, but that is probably because they have service departments close by.

            So yeah, M-B probably would do this for you, and during the warranty period, they would not charge you $425 to do it, either.

            Tesla has to offer service performed at your premises because their service center network is so small and for an EV they probably CAN do the service at your home or office. Although when Edmunds had to have the touchscreen on their one-week-old S replaced, they had to do it at a service center, not at Edmunds’ office. And for a tire rotation on my $100k car, I think I would rather have them put the car up on a lift instead of a coming into my driveway with a couple of floor jacks under the pinch welds on the rocker panels.

        • 0 avatar


          I see, Weapon…they threw that against the wall and it didn’t stick and was creating a lot of ill will and bad PR, so they backed off at that point. I stand corrected.

          So now, they perform that tough tire rotation and arduous refill of the washer fluid for ONLY $425/year IF you buy a multi-year service contract out of the goodness of their hearts. Such a deal.

          Actually, I’m being unfair – Musk came right out and said that they were modeling the $600/year on what Mercedes was charging. The fact that for around $600 the M-B dealer was going to do actual work worth maybe $300, and the Tesla service center was going to do work worth maybe $30 nobody was supposed to notice.

          Weapon, for $425 a year, any comparable ICE car owner can pick up an extended warranty/service contract that will do the same thing as the Tesla one.

          So, the part about the Tesla service centers being so much less rapacious than independent dealers – where does that come in, or did I miss that?

          • 0 avatar

            Wait, for 425$ a year mercedes will send a ranger to my house to repair my car at my convenience and loan me a top of the line mercedes while my car is being maintained/repaired?

            Where do I sign up?

          • 0 avatar
            Dr. Kenneth Noisewater

            Is Tesla’s version of OnStar included in that price?

            Cuz OnStar is pretty expensive after the trial period wears off, and its current data implementation isn’t nearly as nice as Tesla’s 3G..

        • 0 avatar

          Fordson, I don’t see where your getting, ok they required it in the past since most likely they needed cash flow to fund the service centers as a new company. After they were successful and were able to exceed expectations they can do without it. And your saying a dealer will come to my house to maintain my car for 30$ and offer me a top of the line loaner while? again, where do I signup? the price just keeps on dropping!

          I am pretty sure I never said that the dealers are ripoff artists. I said the dealer business model contradicts Tesla’s model. Because the dealers make their money on service. Tesla offers service as an OPTION. Ask any person who bought a Tesla if they would have preferred to go through a dealer.

          The only one I am aware of that does loaners is Lexus. With that said, Tesla offers option of fixing it in your driveway and they give you a top of the line loaner. Not just any loaner. So if you bought a 60k Tesla Model S, they will loan you a performance plus Tesla Model S that is worth 110k. You also have option of loaning a Roadster if you wish and it is available in your area.

          In case of Edmunds, if they had the service option then they could have gotten a loaner and while having the car picked up for maintenance. You can argue that their service network is small but Tesla plans to have 75 centers up in 6 months. End of the day I think the service option is a good option from Tesla. They are selling luxury cars and there are a lot of people who don’t like dealing with hassles. This option adds to the luxury of the car.

          Using a similar example, personally, I always pay extra to get in-home warranty on my computers for example because I don’t like dealing with the hassle of stores. I don’t have time to waste going to a store and they then don’t have a part or we and then I have to leave it there or come back later and etc, its a pain. I prefer the tech come to my house and do all the fixing while I do my own stuff. And I can fix my own pcs if I wanted to because I know how, but again I don’t care to deal with the hassle. I think every luxury car maker should come with the hassle free service option.

          • 0 avatar

            Which way did you go with your own S? Did you take the service package, do pay-as-you-go, or just do it yourself? You think it’s a good deal, so – ?

            And an awful lot of the posts I saw on the loaner deal said that people were getting rental-level Impalas, not a Performance Plus S. Also have seen lots of people who paid the $600 to keep their warranties intact and who paid the extra $100 ranger deal that is now free who are not happy. Google it if you don’t believe me.

            As far as I can tell from their coverage, Edmunds did not get an offer to have the tech come to their offices to replace the screen, nor did they offer a loaner of any kind.

            And you get me wrong, Weapon…I have no problem with the idea that dealers are ripoff artists – I agree. I just think Tesla’s service centers and by extension Tesla corporate sound like they’re ripoff artists, too.

            Either: a)market the daylights out of how trouble- and maintenance-free your premium EV is, or b)whack people $425 a year for that tiny amount of maintenance. Choose one. NOT both.

          • 0 avatar

            Weapon, you state “I said the dealer business model contradicts Tesla’s model. Because the dealers make their money on service. Tesla offers service as an OPTION.” I think only Tesla can service a Tesla. Great OPTION.

            How is dealer service not an option? Is it not my OPTION to service my ICE vehicle at any vehicle service center? It certainly does not void my warranty. I only do warranty service at my dealer…

            And really… in home service? I’m sure that guy that shows up at your house working on your PC is a highly trained technician just like the guy that makes my burrito at Taco Bell is a Mexican chef.

            By the way, I’m not a big fan of dealers either and would prefer to order my vehicle direct from the manufacturer. I just think your argument is weak at best.

        • 0 avatar

          They probably got a good slapdown for flagrantly violating the Magnuson-Moss Warranty Act.

  • avatar

    If he can get the laws changed, more power to him. Frankly, I don’t see the big deal. Wine sellers who were fed up up with silly distribution and tax laws figured out silly work arounds and most states decided to back down rather than have their anachronistic schemes expose their backwardness. Word was getting around how cases of wine were being driven from one warehouse to a series of loading docks at different addresses where the truck would bump the dock and drop off papers to friends and family members who weren’t even there but were the official owners of an LLC that made a small margin and paid the taxes. In the end, the wine was delivered in the same truck it started in having legally changed hands several times.
    So Mr. Musk just needs to figure out how to create a legal dealership model which uses lawyers and servers and some real estate to meet the letter of the law (and any likely easy changes). Add some trustworthy people who will play the part of independent dealer for a little while, and Bob’s his uncle.

  • avatar

    I could see the point of NADA not wanting factory stores competing with its members’ stores, but Tesla is a new brand and has no existing dealer network to compete with. Let them sell direct! Of course, that sets the precedent so when the Chinese brands finally get here they will want to sell direct to, which will be more competition to the existing dealer model than $100k electric cars.

  • avatar

    “Thank goodness there are independent dealers left to try to help the customer. ”

    Indeed. The closest BMW dealer to me helps me to understand why I should pay $600 for a fuel service at 45k miles. After all, gas deposit build up in cylinder walls can hurt the performance of my car. And I wouldn’t want that.

  • avatar

    ““Thank goodness there are independent dealers left to try to help the customer. Manufacturers and brands may come and go, but the dealers are there for the long term.””

    Possibly the worst logic ever. This guy actually believes that the average lifespan of a car dealer is longer than that of an manufacturer? Does not compute.

    Quick, someone do a long term analysis of how many dealers have gone out of business vs. how many automakers have gone out of business in the past X years.

  • avatar

    Heh. “Manufacturers and brands may come and go, but the dealers are there for the long term.”

    Yes, which explains why there are plenty of Oldsmobile, Pontiac, and Saab dealers still around. Except there aren’t. Or perhaps I don’t understand the meaning of “long term”.

  • avatar

    manufacturers still want to own and control distribution and this young fella is nothing more than a front man to spew anti dealer garbage. I ain’t buying it and neither should you.

    • 0 avatar

      It would be interesting to hear your perspective since you were/are a dealer. What value do they add in general. Why shouldn`t a manufacturer (especially a new one) not have the choice in a free market from setting up their own showrooms/dealerships?
      Isn`t this just a case of a vested interest, oh how the irony plays out.

    • 0 avatar

      And what is wrong with a manufacturer owning/controlling their distribution? It is their product.

      A dealer adds no value and just makes them hate the car brand more. To add to it, with EVs dealers as a whole are useless.

    • 0 avatar

      I’m no Musk cheerleader, but calling him nothing more than a front man for the other automakers is without obvious basis.

    • 0 avatar

      Sorry, Elon Musk’s comments make more sense than yours.

    • 0 avatar

      In industry after industry, manufacturers CHOOSE how they want to sell theit products to end users. There are many examples of industries where some companies sell direct, while others sell through dealers/retailers. In every case, in a free market that is their right. And should be.

      Cars would be no different, except that the dealers use money to persuade politicians in order to preserve a monopolistic market. That’s not a free market. Dealers spend money on politicians so that they can receive economic rent from consumers.

      In a free market, some car manufacturers would sell direct, some would sell through delaers and some would use a mix of outlets. That is normal on this continent. The consumer should not be held to ransom by being forced to buy his car from a dealer, simply because the manufacturer is not allowed to sell to him any other way.

  • avatar
    Rod Panhard

    Y’all got it wrong. What Elon Musk was really saying was,

    “We’ve sold orders to the ‘early-adopters’ who have been very generous by giving us deposits, waiting patiently for us to fulfill their orders, and telling others to drink the Kool-Aid. Now we’ve got a problem. We’ve run out of ‘early-adopters’ at the prices we can afford to sell this car. So I’m going to transfer some blame now.”

    That’s what he was really saying.

    • 0 avatar

      That is not what he is saying, Tesla at this point is unaffected because they use the direct model. They have enough sales to fill up the year. Musk is talking about EVs as a whole. He is saying EV sales are low because the dealers who make most of their money on services do not want to push EVs which are low maintenance.

  • avatar

    Someone is trying to pump up their over-inflated stock price.

  • avatar

    I think the dealers are in for a rude awakening when the American people realize what’s going on here. Auto dealers are nearly universally despised. Most people avoid them, because they’re afraid of being taken advantage of. I don’t see how they add any value, and I certainly don’t believe they deserve a legislated oligopoly.

    I’m particularly upset about TX, since Rick Perry has been touring the country promoting Texas’ low-regulation, pro-business climate and inviting companies to relocate to Texas. Meanwhile, he and his friends in the state legislature blatantly disregard free market principles and pursue cronyism and government regulation over consumer choice and freedom. What a bunch of odious hypocrites.

  • avatar

    I agree with him on the dealer issue.

    But Fisker and Coda died because they had lousy products.

    Nissan actually promotes the Leaf on its web site and in its dealerships, and it appears they want to sell more. But I’m sure the dealers would rather sell and service Altimas.

    However, in this early stage of EV deployment, you don’t really have to hard-sell an EV; the customer is already somewhat sold before they come in. They really need to test drive one, learn about financing terms, and figure out the charger arrangements.

  • avatar

    To me the dealer system creates a system where the auto manufacturers are trying to make the dealers happy and not necessarily the final customer. So, ultimately, dealers are deciding what cars Americans want to drive rather than Americans or the manufactures.
    Musk is right, as usual and also, as usual is not afraid to say it.

  • avatar

    Bigtrucks-are you referring to the parking lot on rt 73?

  • avatar

    I agree with Musk. Last time I went to a Chevy dealer, I knew far, far more than the sales rep about the Volt. It was ridiculous.

    The dealer structure is outdated and needs to change. I am sick of some secret Sales Manager hidden in some office (usually situated a few feet off the floor to make you feel as if they are king) having to negotiate some deal, only to have to negotiate further, followed by “hey, you need “rim” insurance for those wheels.

    Why can’t I just go in … say this is the vehicle I want, the price is what it is, and I order the damn car. All the mumbo jumbo and being left in a cubicle while a “serious” discussion happens is very last century.

    Changing this will be difficult, but it has to happen.

    • 0 avatar

      Last time I went into a Ford dealership, the salesman didn’t even know that the Expedition EL existed.

      The sales manager was requiring all salesmen to bring the customer to meet him so he could have a turn at assessing you, and while I was chatting with the manager ever so briefly, the salesman came back after looking for their Expedition brochure and said, “sir, you’re right, we do have an Expedition EL!” right in front of his boss, who was shaking his head in disbelief.

      The F&I guy is the devil. The whole process of buying a car could be so much easier, and there’s a reason people hate car dealerships.

  • avatar

    I think Musk was specifically complaining about the power of the multi-location dealership groups — a handful of very large operations that have the resources to protect themselves. Two of the top seven of these groups, Sonic and Hendrick, are located in North Carolina where Tesla is prevented from selling cars.

    The biggest chain, AutoNation, has a deal with Tesla to buy cars customers want to trade in, so I’m not sure what they think. Could be a marriage of convenience.

  • avatar

    Car dealers are, for the most part, completely unnecessary. In this day and age we simply do not need the current model to buy/sell cars. At least new cars. We should be able to buy directly from the manufacturer and the manufacturer (like Tesla) could have demo stations for you to sit in and drive the car. No high pressure sales tactics. No markups. No pressure at the finance table to buy all the BS aftermarket protection packages and extended warranties. No games and lies.

    Refreshing. Make it happen.

  • avatar

    Every automaker would like to go direct to the customer and bypass franchise dealers. Ford tried to set up some factory owned dealerships some years ago and got shot down by NADA in a similar fashion that Tesla is now. The reason is the same for all automakers – they want the dealer profit margin themselves and/or the opportunity to profitably lower prices. Manufacturers also would like more control over the sales and servicing process, which is almost universally disliked by customers, but which manufacturers have limited means to force independent franchised dealers to improve. For electric vehicles, the dealer margin can also be a further hurdle because the margins on ICE cars are likely higher – so if I can make 9% on an ICE sale or 4% of an electric car sale – which one is the dealer going to push on the customer?

  • avatar

    Aw ‘come on, guys. New car dealers are fun to do business with. Just go to the interweb and look up how much they paid for the car you want including any current rebates. Subtract another 3 to 5% to get close to the real number.

    Now you got ’em by the balls in any negotiation. Leave ’em a $100 ‘profit’ and walk if they don’t take it. Maintain a genial, businesslike demeanor. I have had salesmen follow me across a parking lot on a rainy day w/o an umbrella. Great fun. If you run out of places to go, start all over and offer a little extra. Car dealers generally won’t hold any earlier unpleasantness against you. They are almost always kind and forgiving souls.

    Oh yeah. Don’t forget to check the interweb, Yelp for example, to see which dealers have a reputation for giving adequate or better after sale and under warranty service. Deal only with them.

Read all comments

Recent Comments

  • Jeff S: 40 mpg is good for any truck even if it is based on an Escape. A truck is not as aerodynamic as a car...
  • kcflyer: I thank you Tim for the story. I think I can learn something from it although I have never been on a track....
  • Jeff S: With the chip shortage the USA is starting to turn into Cuba.
  • jmo2: Maybe there is more to life than panel gaps?
  • redapple: To the Best and Brightest. RE TESLA. I think they are crap. Being an old GMAD Doraville guy responsible for...

New Car Research

Get a Free Dealer Quote

Who We Are

  • Adam Tonge
  • Bozi Tatarevic
  • Corey Lewis
  • Mark Baruth
  • Ronnie Schreiber