Quote:
Originally Posted by BGM-M3COMP
Like i said, salesman do not work for free. I have too many friends in this business and my dad, before he passed away, has been a car salesman for over 20 years working at many different car makers. His "hussle" was to sell cars. Obviously. That's why they're there.
If we can eliminate that, the car buying experience will be much easier and everyone can basically pay a "flat rate". Where did i say if this happens we'll be paying what the dealer pays for the car? You already said it yourself, profits are made from service. I would almost bet there are more service work done on warranty alone than those who are sending their used out of warranty car, to the "DEALER" for service. A lot of more people are smarter than that. Yet these dealers are still making gigantic profits. It's from sales.
I still hope the future will eliminate dealers. There's really no need for them. They are just there to technically show you the car and allow you to test drive. Contracts can technically be done online with e-signatures.
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My apologies if I misunderstood - but your last sentence in the previous message mentioned we could perhaps pay $65k instead of $80k because of the elimination of dealer profit. The issue with that is that 1) if there are cost savings by eliminating the dealer network, manufacturers aren't simply going to hand those over to the customers. I used to work for a manufacturer which also acted as a distributor, and the consumer paid the same price for the product whether they bought from a 3rd party dealer or if they bought it direct from the manufacturer.
The issue is, while sales people don't work for free, there's other cost benefits to utilizing a dealer network over direct sales from the manufacturers point of view. Delivering direct to customer as an example - there's a
significant added cost to that as opposed to consolidated shipping into dealerships. Then there's the issue of service centers. The current model of utilizing dealers as service centers works well. Eliminate the dealer network and all of a sudden you, as a manufacturer, will either have to foot the bill to establish your own service centers, or you outsource to a 3rd party. Either way that cost doesn't go away. If you look at Tesla's model, customers getting timely service has been a major issue. And finally, even the process of setting up a test drive at your place of residence, there's cost associated with that.
Like I said before, I get the convenience benefit of this all. But if you're a savvy shopper, you're getting screwed by paying what everyone else is paying whereas previously you would have come out ahead (in some cases significantly) through discounts, since there's zero negotiation/shopping around/relationship building in a direct sales method.
We're in a crappy market, so it's easy to point the finger at dealers who are taking advantage by charging markups on top of MSRP. But in a normal market, if you follow the process I outlined, working with dealers is convenient and satisfactory while getting a great deal on a car. I'll take that any day of the week.