#CarDealers

Buying a new car usually requires visiting a dealership. That puts you at a disadvantage: You’re on foreign soil, and they know you don’t know your way around.

As other used car retail outfits like Shift go public in an attempt to grow their number of stores and break into the (lucrative?) used-only dealership market, established player Carvana has a different issue on its hands: There just aren’t enough used cars to buy these days.

Used car retailer Shift is going public today, and continues its promise to make car shopping a breeze during these here Quarantine Times. But will their not-so-unique (and now public) model make a dent in the market?

Hi there! You’ve probably learned a bit about your author during my time at TTAC, but you might not know I toiled in the service department of various car dealerships early in my career.

I started as a porter in high school, then eventually worked as a greeter in the service bay (basically, managing the flow of cars and customers in the service drive), before finally working as a service writer (aka service advisor). I did that final job both in an express-service lane at a dealer (think oil changes and basic maintenance) as well as in a capacity as a “regular” advisor (not just oil changes, but all types of repair).

Michigan auto dealers will be allowed to resume in-person sales on Tuesday, according to the latest in a long list of executive orders signed by Gov. Gretchen Whitmer. The state, which harbors the fourth-highest coronavirus death toll in the country (following New York, New Jersey, and Massachusetts), has enacted some of the strictest countermeasures in the country.

This has created no shortage of pressure to both reopen Michigan so life/business can return to normal and maintain closures to avoid further contagion risks. Obviously, that’s proven difficult to do. All steps taken towards reopening come with conditions, including those established for Michigan’s dealerships.

But first, some backstory.

Colorado has been considering allowing automakers to sell electric vehicles directly to consumers, but pushback from dealerships complicated things. Senate Bill 167 was intended to level the playing field against Tesla, which already engaged in direct sales, by opening up the door for rival electric vehicle manufacturers to similarly bypass the dealership model.

However, dealer groups noticed the language in the bill effectively permitted any automaker producing EVs to engage in direct sales, Naturally, they cried foul. The bill had its final legislative hearing on Monday, and its new language identifies a difference between a legacy automaker with existing storefronts and EV firms without them.

We’re not talking about my Golf Sportwagen purchase today; they were slow to negotiate, but not sleazy. The topic at hand is what happened this past weekend when I helped my grandmother purchase a used car.

It turns out that at some dealers, even though the calendar says 2020, sales practices are more in line with 1980.

What happens when specific used car requirements combine with some old fashioned encouragement from TTAC staff?

A one-way road trip spanning five states, that’s what.

U.S. light-vehicle dealers reported an operating loss for the first time since the National Automobile Dealers Association (NADA) began collecting data in 2009. While everyone continues reporting pretax net profits, concerns are beginning to swell around their dependency on factory incentives, which are not included in operating tabulations.

NADA’s analysis of 2019’s first-quarter auto sales shows that incentive spending is down compared to the same period a year ago. The group expects above-average discipline from automakers in terms of incentive spending throughout the year. According to J.D. Power, average incentive spending per unit was down $119 to $3,821 through March 2019 — with the brunt of that going toward trucks. However, if sales remain low, spending may creep back up to help clear out languishing inventories.

This time last year, Lincoln was busy promoting its Experience Centers — storefronts that promote the brand and its products, but don’t serve as active dealerships. Then, in August, it asked around 80 Ford/Lincoln dealerships to commit to building separate Lincoln-only facilities by July. It was an attempt to elevate the premium brand by making it appear more exclusive, akin to what Cadillac attempted with Project Pinnacle and what Hyundai Group wants to achieve with Genesis.

Unfortunately, all of these programs garnered a “mixed response” from dealers. Many complained that the cost of building a separate showroom for higher-end models is prohibitively expensive. That has also been the case with Lincoln. The California New Car Dealers Association even wrote Ford Motor Co. last month, asking it not to punish storefronts that fail to divide their facilities, and it looks as though the automaker has acquiesced.

This week is the third and final installment of our QOTD series about cornering the used car market and finding the most bang for the buck.

We’re going all out for this finale, and giving you plenty of money to shop.

In last week’s Part 1 of this three-part QOTD series, we asked you to scan through the old brain box and offer up good examples of used cars for the budget-minded motorist, keeping your purchase within a stringent $8,000 budget. Today you’ll get a more generous sum of money, but you’ll also find yourself subject to heightened buyer expectations.

Let’s pick out some really tremendous used cars.

This week marks the first of a three-part QOTD series where we’ll discuss everyone’s favorite topic here at TTAC: used cars. And for this first installment, we’re on a tight budget.

Car dealerships are an American institution. Often controlled by a patriarch with an unusual amount of sway in the local community (and their sometimes cosseted children), dealer franchises dot the country’s landscape like moles on a back. Isolated near exit ramps, they serve as gleaming beacons of civilization as you traverse through long expanses of wilderness on a road trip.

North America wouldn’t be the same without them but, according to one automotive regent, irreparable change is coming to the dealer networks we’ve become begrudgingly accustomed to. Bill McDaniels, president of McDaniels Automotive Group, runs a half-dozen stores selling selling Acura, Audi, Porsche, Subaru, and Volkswagen-branded vehicles in South Carolina. He’s one of those automotive viceroys mentioned earlier, right down to having his son as the chief operating officer for his business, and he’s convinced the era of family-owned dealerships is almost over.

Is this one man’s paranoid delusion or an astute observation of industrywide trends?

We live in polarized times, when acknowledging the existence of one group of evil people is considered to be a defense of a second group of evil people that the first group of bad actors consider their enemies. Some folks have trouble holding the concept that it is possible to despise both sides of a controversy, without having to identify with this or that tribe. I dislike having to use caveats in my writing but let me say at the outset that I think that people and businesses should not unduly take advantage of situations during natural disasters and other catastrophes.

We’ve seen a lot of inspirational stories out of Texas and Florida in the literal wake of two mammoth storms. We’ve also seen some price gouging and looting. Catastrophes bring out the worst and best in both those that are directly affected, and in those who observe from afar.

A couple of Florida car dealers, in Hollywood and further north in Tallahassee, decided to shelter their inventories from Hurricane Irma in public parking structures made available to residents trying to keep their personal vehicles above flood waters (and somewhat protected from flying debris). The dealers may have protected their vehicles from Irma, but that didn’t protect them from a storm of bad publicity. Every car those dealers parked in those structures meant someone’s daily driver couldn’t be saved from the maelstrom.