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Yeah, but car sales ain't it. Carvana and similar are such a better experience than dealing with a salesperson whose incentive and words you have to interrogat

Yeah, but car sales ain't it. Carvana and similar are such a better experience than dealing with a salesperson whose incentive and words you have to interrogate. I'd wager that salespeople will be needed only for high ticket price, high risk deals where trust is critical in getting the job done. Anything else that can be made transactional will be and the associated sales jobs will be lost.

ineedasername 5y ago
Carvana etc are not full service though. You can't go test drive in advance. Also, dealerships are tightly linked to manufacturers, very similar to other franchises, and the incentives are in the manufacturers' favor for the existing model: there's relatively little profit, especially considering the overhead, in selling the car itself. The profit center is in servicing the cars at the dealership service center: The manufacturer has decent margins on parts and the dealership gets it's money on labor. Dealerships get a little extra in the points they take on financing, and higher margins selling used trade-in cars, but service is the key. That is an extremely tight linkage between manufacturer, sales, financing, and service that will be very difficult to break.
- pfranz 5y ago
  I've never heard of Carvana, but test drives aren't something we should need dealerships for. Having 1 or 2 cars of each is all you need. Technically a low-end model would be fine, but I can see them only offering the highest end model to upsell features. Then you do what brick-and-mortars have complained about for years and order exactly what you want online. Personally, I think renting a car for a medium term is way better than test driving. It's the Pepsi Challenge problem. If you can buy a new car, drop down a hundred or two to see how your commute works, how easy it is to park at home, etc. Sure, dealerships have a rats-nest relationship that would be hard to untangle. Looking at the history I don't think manufacturers care about them them and you can run a repair shop without it. > service is the key. I get what you mean about certain aspects, but I would not describe the process of buying a car in that way. If you walk in with cash in hand and pointing to a car it will take 4 hours and you will be coerced into paying for something you didn't want.
  - ineedasername 5y ago
    I'm not saying things couldn't work differently, only that the incentives don't align to make that very easy to accomplish. Tesla did it because they had the advantage of looking at the current status quo and saying "Yeah, no thanks, we'll retain control of whole process." I get what you mean about certain aspects, but I would not describe the process of buying a car in that way. I don't know what you mean. I don't think I said much about the hassle of buying a car: I agree with you on that. When I say "service is the key" I mean mechanically servicing the car, not customer service. I also wouldn't contradict you on the test drive idea, but that's almost exactly how dealerships do it already. Unless you really insist on driving the exact car you're buying, they are going to direct you towards the demo car reserved for that purpose. Repair shops: Yes they can exist outside of dealerships, but manufacturers can't build their own service centers without bankrupting the dealerships, which is how they get sales in the first place. Dealerships do occasionally flip to another manufacturer if the local market for their cars is bad, and they would do that in a heart beat if the manufacturer opened its own independent service center nearby. I completely agree that better models for all of this could exist, but, as you said, the intertwining factors are a real rats nest. This is why I'm extremely skeptical when someone claims everything will be different in 20 years. Breaking this rats nest requires some type of black swan event. By definition those are mostly unforeseeable, and I don't see anything right now to change things. Carvana and those like it focus on used cars, which have always been much more decoupled from the manufacturer/dealership relationship already. As a final side note, you can avoid the 4-hour dealership visit pretty easily these days: My wife just needed a new car, and we worked with their online sales person via email, casually going back & forth 2 or 3 times over the course of a discussing options and hammering out the details. Trade-in value was determined by giving them the VIN # and pictures of the car. When we went in to pick up the car, all we had to do was review the details. There was a little bit of wait for the insurance company to put the car on our policy (they can't do that until the transaction is official) and for the finance officer to be available, after which we reviewed the paper work, signed, and were done. The whole process took under an hour.
    - throwawayboise 5y ago
      > Unless you really insist on driving the exact car you're buying I certainly do. I thought this was the norm?

ineedasername 5y ago

Carvana etc are not full service though. You can't go test drive in advance. Also, dealerships are tightly linked to manufacturers, very similar to other franchises, and the incentives are in the manufacturers' favor for the existing model: there's relatively little profit, especially considering the overhead, in selling the car itself. The profit center is in servicing the cars at the dealership service center: The manufacturer has decent margins on parts and the dealership gets it's money on labor. Dealerships get a little extra in the points they take on financing, and higher margins selling used trade-in cars, but service is the key. That is an extremely tight linkage between manufacturer, sales, financing, and service that will be very difficult to break.

pfranz 5y ago
I've never heard of Carvana, but test drives aren't something we should need dealerships for. Having 1 or 2 cars of each is all you need. Technically a low-end model would be fine, but I can see them only offering the highest end model to upsell features. Then you do what brick-and-mortars have complained about for years and order exactly what you want online. Personally, I think renting a car for a medium term is way better than test driving. It's the Pepsi Challenge problem. If you can buy a new car, drop down a hundred or two to see how your commute works, how easy it is to park at home, etc. Sure, dealerships have a rats-nest relationship that would be hard to untangle. Looking at the history I don't think manufacturers care about them them and you can run a repair shop without it. > service is the key. I get what you mean about certain aspects, but I would not describe the process of buying a car in that way. If you walk in with cash in hand and pointing to a car it will take 4 hours and you will be coerced into paying for something you didn't want.
- ineedasername 5y ago
  I'm not saying things couldn't work differently, only that the incentives don't align to make that very easy to accomplish. Tesla did it because they had the advantage of looking at the current status quo and saying "Yeah, no thanks, we'll retain control of whole process." I get what you mean about certain aspects, but I would not describe the process of buying a car in that way. I don't know what you mean. I don't think I said much about the hassle of buying a car: I agree with you on that. When I say "service is the key" I mean mechanically servicing the car, not customer service. I also wouldn't contradict you on the test drive idea, but that's almost exactly how dealerships do it already. Unless you really insist on driving the exact car you're buying, they are going to direct you towards the demo car reserved for that purpose. Repair shops: Yes they can exist outside of dealerships, but manufacturers can't build their own service centers without bankrupting the dealerships, which is how they get sales in the first place. Dealerships do occasionally flip to another manufacturer if the local market for their cars is bad, and they would do that in a heart beat if the manufacturer opened its own independent service center nearby. I completely agree that better models for all of this could exist, but, as you said, the intertwining factors are a real rats nest. This is why I'm extremely skeptical when someone claims everything will be different in 20 years. Breaking this rats nest requires some type of black swan event. By definition those are mostly unforeseeable, and I don't see anything right now to change things. Carvana and those like it focus on used cars, which have always been much more decoupled from the manufacturer/dealership relationship already. As a final side note, you can avoid the 4-hour dealership visit pretty easily these days: My wife just needed a new car, and we worked with their online sales person via email, casually going back & forth 2 or 3 times over the course of a discussing options and hammering out the details. Trade-in value was determined by giving them the VIN # and pictures of the car. When we went in to pick up the car, all we had to do was review the details. There was a little bit of wait for the insurance company to put the car on our policy (they can't do that until the transaction is official) and for the finance officer to be available, after which we reviewed the paper work, signed, and were done. The whole process took under an hour.
  - throwawayboise 5y ago
    > Unless you really insist on driving the exact car you're buying I certainly do. I thought this was the norm?