In the Future, Will Car Dealerships Exist?
Car dealerships are a conundrum. For decades, they’ve prevailed despite changes in every aspect of what occurs at a new car dealership. The big question is whether they will continue doing business as they have, or will there be changes to a system that’s out of touch with buyers today?
How new cars are bought is at the center of this debate. In the past, the rules governing dealerships meant that the majority of sales would occur in their territory. Online buying has changed that, and if Toyota won’t sell a Tacoma with a manual transmission in a city or suburbs, you can find an outlying dealer that will. This goes for colors, equipment, and even discounts.
Service is where a dealership still retains the upper hand. Most of the work must be done at a franchised dealer while it’s under warranty. They say it’s due to the new vehicle training technicians receive. If the servicing dealer is the one that sold it, chances are that you’ll get preferential treatment. It may not get you to the front of the service line, but you might get a loaner car or other perks.
After your Kia’s warranty has expired, here’s where you’re on your own, or your dealer has your back. You’ve exceeded the warranty by 2,000 miles when you notice the clear coat on the hood is peeling. It is about $1,800 to refinish the hood at the dealership. If you and the dealership can’t work something out, they’ll schedule an appointment with a service manager from Kia. This service manager can decide if Kia will pay for it, if the factory will split the cost with you, if Kia and the dealership will cover it, or your claim is denied outright. This is part of what happens at a dealership, and how they operate.
If dealerships go away, there will likely be nameless, faceless warranty stations. Your vehicle will be repaired under warranty, and after that, you’ll take it to an independent. Warranty stations would be much like a rental car agency, with numerous franchises that they serve, and long lines due to volume. Will any of this lower the ownership costs, or simply raise your frustration level?
[Images: © 2021 J. Sakurai/TTAC]
With a father who owned a dealership, I literally grew up in the business. After college, I worked for GM, Nissan and Mazda, writing articles for automotive enthusiast magazines as a side gig. I discovered you could make a living selling ad space at Four Wheeler magazine, before I moved on to selling TV for the National Hot Rod Association. After that, I started Roadhouse, a marketing, advertising and PR firm dedicated to the automotive, outdoor/apparel, and entertainment industries. Through the years, I continued writing, shooting, and editing. It keep things interesting.
More by Jason R. Sakurai
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The Future. There are different visions of the Future depending on your political inclinations. My vision of the Future is that in the Future I will configure the car I want online and then 3D print it in my garage. Yes, every Democrat will have 3D printer in his garage. Every Republican too. In regards of payments - there will be no money in the Future - everything will be free as it should be from the very beginning.
As much as dealers are portrayed as the scam artists trying to fleece people, they are actually advocates for the customer. Imagine dealerships were just corporate stores. If you get rejected at your local Toyota store, you are now completely locked out of buying a Toyota altogether. In the current system of independent dealers, you have different businesses working with different banks etc that can use their relationships to get you into the car you want.