6 ms·
Any reference materials / history on car dealerships and how they’re part of the ecosystem? When I was writing software for dealership stocking (19 years ago n
by bfung 5y ago
Any reference materials / history on car dealerships and how they’re part of the ecosystem?
When I was writing software for dealership stocking (19 years ago now), it was pretty clear to me that there’s no good reason dealerships exist, as states could also make laws that covered the manufacturer.
It made sense when manufacturers didn’t know how to scale out end consumer services, like marketing, financing, repair, etc. But now in the 2000s and 2020s, all the manufacturers have their own distribution and financing arm as well.
It turns out that people want to buy from manufacturers: “it’s a Ford dealership”, “it’s a Toyota dealership” as opposed to “it’s bfung’s cars”. The extra indirection and separation of legal entities actually make a worse user experience.
In addition, to be able to use the manufacturer’s brand, the dealerships new car pricing are all subject to the manufacturer, so no arbitrage opportunities can be made, except for getting suckers. The incentives of the dealership has skewed toward pushing services and used cars as that’s where they make money now.
- judge2020 5y agoFor reference, here's the markups dealerships have put on some electric cars to make some extra cash. https://docs.google.com/spreadsheets/u/1/d/e/2PACX-1vQQEE7PkMhOPoiqL1KoMouCTk6ZJEHRdAW6ecBhV3CWiaB5QOQSH6WR-sariF-KZmmoL9oAM4K_gtaY/pubhtml https://docs.google.com/spreadsheets/u/1/d/e/2PACX-1vQQEE7Pk... (from reddit https://old.reddit.com/r/electricvehicles/wiki/index/msrptracker https://old.reddit.com/r/electricvehicles/wiki/index/msrptra... )
- HWR_14 5y ago> it was pretty clear to me that there’s no good reason dealerships exist, as states could also make laws that covered the manufacturer. How would that be the case? Let's say the manufacturer is in Oregon. Why would laws in California apply to them at all?
- Retric 5y agoBecause presumably their selling cars in California. It’s the same reason online retail needs to collect sales taxes in every state.
- HWR_14 5y agoThere are federal laws and Supreme Court cases specifically and exclusively applying to collecting sales tax that require online retail to do so. There is no legal framework to apply, for example, car lemon laws to those same online retailers. I suppose if you change US law then it might be possible. But if so I would anticipate a major shakeup and secondary effects you wouldn't expect.
- Retric 5y agoThe Supreme Court changed it’s mind independent of any changing federal laws and has removed physical presence from the requirements for the commerce clause. “[e]ach year, the physical presence rule becomes further removed from economic reality” That ruling is therefore not inherently limited to sales taxes and opens the door to lemon laws etc. At least assuming the purchaser is in their home state when the transaction takes place.
- HWR_14 5y agoThe ruling specified that it was a reasonable cost for SD to impose on Wayfair (the third part of a three part test) because of a 2005 federal setting up an interstate sales tax clearing system SD opted into. Meanwhile, all credit card companies operate out of SD to avoid the usury laws limiting interest in the various other states. It's a very narrow opinion. Or, to put it another way, ground your argument in finance laws not in sales tax.
- bfung 5y agoA jurisdiction with sufficient desire (political will) and market power will say “if you want to sell cars in this state, you need to follow my rules.”
- HWR_14 5y agoThat's not a thing they can really do. Look at the banking industry. Every wonder why most credit cards are run out of South Dakota? What if I sell to citizens of California and ship them cars, but we do all the business in Oregon? Sales taxes are a special exception with specific federal laws and Supreme Court rules.