QOTD: Does the Dealer Model Need to Finally Change?
We've covered two stories today in which the dealership model comes into play.
In one, we see dealers pushing back against the plan made by the OEM they represent because the plan might cost them money -- and might cause them to run afoul of the law in some states. In another, we see an EV startup suing a state because it believes that laws that would force it to use independent franchise dealers are anti-competitive.
I have my own thoughts on the dealer franchise model that I should organize into an op-ed someday. But for now, I want to hear from you -- should OEMs be able to embrace direct sales? Or does the current model still work?
[Image: lumen-digital/Shutterstock.com]
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Tim Healey grew up around the auto-parts business and has always had a love for cars — his parents joke his first word was “‘Vette”. Despite this, he wanted to pursue a career in sports writing but he ended up falling semi-accidentally into the automotive-journalism industry, first at Consumer Guide Automotive and later at Web2Carz.com. He also worked as an industry analyst at Mintel Group and freelanced for About.com, CarFax, Vehix.com, High Gear Media, Torque News, FutureCar.com, Cars.com, among others, and of course Vertical Scope sites such as AutoGuide.com, Off-Road.com, and HybridCars.com. He’s an urbanite and as such, doesn’t need a daily driver, but if he had one, it would be compact, sporty, and have a manual transmission.
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What should happen is a hybrid of the current system. Turn the dealer into an order taker with every model being in stock for test drives; then order the vehicle at a negotiated price (never above sticker) and then have the ability to refuse to buy once the vehicle arrives after having test driven the product. There should be no penalty to the consumer for rejecting an order. The dealer can stock the vehicle and sell it like normal process without padding the sticker with anything.
I view the argument over dealerships much as I do the Left's ongoing, fevered efforts to subvert capitalism. Neither system is beholden to change just to accommodate those weaker societal elements unable to function within them.
The dealer model inherently favours those who 'do not need a vehicle immediately' or who are educated regarding how to research costs and negotiate. It also favours those with higher credit ratings. Is this unfair? Well that depends upon who you ask. Dealers do have high costs. The land, the building(s), payroll and the cost of inventory. If the dealer does not 'get you' on the cost of the car purchase, then they may 'get you' with finance rates or on your trade-in. Trade-ins are where many dealers used to make their greatest profit. Yes, there was more profit selling used than new. Personally I believe that the system should change but doubt that it will, too much.
dumbasses don't realize dealers are the strength.