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Related note: car stealerships are a relic of the past. There is no reason why a middleman should exist when buying a car. Consumers should have the option to p

Related note: car stealerships are a relic of the past. There is no reason why a middleman should exist when buying a car. Consumers should have the option to purchase directly from the manufacturer. I am personally not a fan of Tesla as a vehicle, but I admire the business model of buying directly from Tesla. Stealerships are a drain on the consumer. All that land they own can be used for productive economic activity or housing.

hypeatei 2y ago
I agree they're useless middlemen but I don't believe for a second that the direct-to-manufacturer model wouldn't also be enshitified eventually too.
- kevingadd 2y ago
  It's what we had before the laws prohibiting direct-to-consumer/manufacturer-owned dealerships. It's hard for me to find any reliable sources that explain why we got those laws though (was it because direct-to-consumer was bad?) It seems like the EU has reined in the worst excesses of dealerships a lot, and allows direct-to-consumer. Maybe the US will follow suit in a few decades.
  - kube-system 2y ago
    In the early days of the automobile, auto manufacturers didn't have the resources to have stores in every town in America. People couldn't just get a vehicle in Atlanta from Detroit if they didn't have a way to get there. Dealers both organically popped up, and some manufacturers actively engaged with local dealers to get their cars out to a broader audience (e.g. Ford with the Model T). But as those manufacturers and dealers grew, they then had the resources to operate at broader geographies, and dealers lobbed for franchise laws to "protect local businesses", etc.
  - stackskipton 2y ago
    Dealerships came about because car manufacturers were demanding that all service go through their dealerships at crazy marked up prices. So dealerships started as way to "protect the consumer" but quickly because terrible places all on their own.
metalliqaz 2y ago
I think you go too far. I too have a deep dislike for dealerships, but they are not useless. Specifically, it's a place you can go to test drive cars and they have OEM-certified garages for warranty repairs. Can't test drive when you buy online. I think the main problem with dealerships is the government granted monopoly. If a dealership is in a region, most states prevent any other dealership from setting up shop in that region. That's why so many of them are passed from father to son like a dynasty. No competition at all -- and they act like it. Restore competition and the "stealership" aspect should go away.
- sureIy 2y ago
  To be fair, how many copies of one car do you need? Once you got 15 models on display you should be good to go for testing purposes. You don’t need a parking lot with a hundred cars.
  - kristjansson 2y ago
    Some people want to buy a car _today_. Lots of people want to buy a car this week. Fewer people have the patience and funds to pay and wait for car on order.
  - metalliqaz 2y ago
    Sure, most people don't need to drive away same-day with a car, but some want to. That's the value of inventory.
- jcrash 2y ago
  >Specifically, it's a place you can go to test drive cars and they have OEM-certified garages for warranty repairs. Can't test drive when you buy online. Tesla doesn't have independent dealerships and it's quite easy to test drive their cars before you buy.
  - kristjansson 2y ago
    It's also very, very difficult to get them repaired...
kevingadd 2y ago
It's interesting, because in theory the requirement for independent dealerships could promote competition - they can compete to offer the lowest markup over MSRP, offer different addons, or offer better service. Just like going to a specialist shop for computer parts or audio gear or whatnot. But instead we ended up with a system where car dealerships basically own local lawmakers and got laws passed that not only prevent the manufacturer from competing with them, but make it really hard for people to start new dealerships to compete with them. And the experience shopping for cars at a dealership is absolutely terrible, which shows you that they don't feel any pressure to compete.
- bcrosby95 2y ago
  It did work that way though. I've never payed MSRP on a brand new car. Good luck doing that if all you can do is order from the manufacturer's website.
  - xnx 2y ago
    Would iPhones be less expensive if you could only get them from local dealers and not Apple?
    - bcrosby95 2y ago
      It depends upon if Apple tried to set price controls and how successful they were at pursuing businesses that violated them. For example, Games Workshop doesn't like when 3rd party retailers charge less, but it's easy to find 3rd party retailers that charge less than Games Workshop on their website. In response they've increasingly made certain models online only and its always at full markup.
- itsoktocry 2y ago
  >But instead we ended up with a system where car dealerships basically own local lawmakers and got laws passed that not only prevent the manufacturer from competing with them, but make it really hard for people to start new dealerships to compete with them. There are practical reasons for this. People buy expensive items and expect to be able to get those items maintained and serviced. If the business was cutthroat, that could be more difficult. I don't want my dealer going bankrupt, frankly. But the idea that dealerships aren't out there competing with each other is insane. Have you ever actually bought a new car? >And the experience shopping for cars at a dealership is absolutely terrible, which shows you that they don't feel any pressure to compete. Just the complete opposite experience I've had in my lifetime of buying new vehicles. And the idea that they don't compete is an outright fabrication. You have an incredible amount of leverage buying a car, and you can shop quotes around.
jameshart 2y ago
Why is this a related note? Is the regulatory framework around car retail a contributing factor to their vulnerability to ransomware? This feels like a reflexive response to the mention of the word ‘car dealerships’, not something that will lead to a discussion of the substance of this article.
- xnx 2y ago
  I suppose dealerships couldn't get hacked if they didn't exist.
  - kube-system 2y ago
    The activity of dealing cars will still exist even if someone else (e.g. the manufacturer) is doing the dealing.
legitster 2y ago
It is kind of a crazy model. You don't go to the Pepsi store for Pepsi and the Coke store for Coke. The exclusivity dealerships get enshrined in law is kinda nuts. Still, I think there is something to be said for independent dealerships overall for service quality. Trying to get a Tesla serviced is still something of a nightmare. In comparison the service departments of dealerships have are much more robust.
- kube-system 2y ago
  I'm not sure that's a good comparison. There are several middlemen before you buy a Coke or Pepsi. Usually, your soft drink is manufactured from the brand's syrup by a bottling partner, which is then distributed to a retailer, who you buy it from. e.g: https://www.coca-colacompany.com/content/dam/company/us/en/about-us/coca-cola-system-chart%20(1)-no%20footnote.png/width3840.png https://www.coca-colacompany.com/content/dam/company/us/en/a...
  - legitster 2y ago
    I used to work for Pepsi-Co so I am well aware of how their distribution works. But in this case, at the point of retail it makes no difference. The store can sell as many different brands as they want. The problem is not the middlemen, it's the exclusivity arrangements that disincentivize brand competition.
    - kube-system 2y ago
      Then you should be aware that Pepsi/Coke are notorious for their exclusivity agreements in some of their retail channels e.g. I drank Coke products in my undergrad because of my school's exclusivity agreement.
    - bigstrat2003 2y ago
      Unfortunately the soda business isn't free of noxious exclusivity deals either. Restaurants almost never have both Coke and Pepsi products, it's either one or the other. As I understand it that's because restaurants get a lower price if they agree to exclusively offer one brand.
itsoktocry 2y ago
>Consumers should have the option to purchase directly from the manufacturer. They should have the option, sure. But what difference do you think this makes in reality? The process ends up being the similar. >but I admire the business model of buying directly from Tesla A lot of people don't want to buy a $40,000+ item online. Tesla understands this, which is why they opened "showrooms" to have real people walk you through the process. Oh, and let's not get started on surprise repair costs from Tesla, as if they are immune to that ridiculousness. Saying "no stealerships" (so clever) doesn't change the fact that there's a manual process involved with buying a car.
- cogman10 2y ago
  > But what difference do you think this makes in reality? The process ends up being the similar. The difference is the price listed is the price you pay. There's not an environment where the dealer is injecting whatever BS fee or piss poor financing they can to milk out every extra cent from the customer. The manufacture is incentivized to sell these cars at the advertised price.
  - itsoktocry 2y ago
    >The difference is the price listed is the price you pay. There's not an environment where the dealer is injecting whatever BS fee or piss poor financing they can to milk out every extra cent from the customer. What does the "advertised price" mean, when companies like Tesla can, and do, change it on a whim? Is that really better? No one is stopping you from walking into a dealership and paying sticker/MSRP.
    - pricechild 2y ago
      What does Tesla do differently regarding changing product prices that they're worth calling out compared to other companies? My personal experience is that they honoured my order and delivered a vehicle superior in every metric but "turning radius". (Which has a far higher price if ordered again on my delivery day) Every company in every industry modifies products and pricing? See e.g. "shrinkflation"
AlexandrB 2y ago
> All that land they own can be used for productive economic activity or housing. No it can't. You still need places where cars can be repaired as well as storage for parts/cars inventory. The only way you reclaim some land is if service gets worse. Edit: For example, Tesla sells direct to consumers but there's still a Tesla "showroom" in my town. In terms of footprint/appearance it's basically a dealership. So where are the land savings?
- mattmcknight 2y ago
  The Tesla showroom near me is much smaller than a dealership. That said, still need somewhere to buy/sell used cars.
- SoftTalker 2y ago
  A repair shop doesn't need parking for 100 unsold cars, and it doesn't need to be in a high-traffic part of town.
  - cogman10 2y ago
    Yeah, the footprint of my local mechanics are peanuts compared to the gigantic parking lots gobbled up by dealerships. Parts take space, but not 5 acres of space.
- cogman10 2y ago
  > No it can't. You still need places where cars can be repaired as well as storage for parts/cars inventory. The only way you reclaim some land is if service gets worse. You probably aren't going to have 10 Ford dealerships in town all selling the same models of cars. That's where the space savings comes in. As for parts/service, that also gets more streamlined as you aren't likely to have the audi/ford/dodge dealerships and instead just the 1 ford manufacturer in town.
  - itsoktocry 2y ago
    >You probably aren't going to have 10 Ford dealerships in town all selling the same models of cars. That's where the space savings comes in. So do we want competition, or not?
DowagerDave 2y ago
I'm not sure why you hate car dealerships so much, doesn't your opinion apply to any distributor between the manufacturer and the end consumer? This is a the same narrative that people said about bicycle retailers as well, but there are significant problems with the DTC model, notably service and support. And if you look where dealerships are located nobody wants to build housing in a big strip beside the freeway.
- simonw 2y ago
  Dealerships are a special case. From Wikipedia: https://en.wikipedia.org/wiki/Car_dealership https://en.wikipedia.org/wiki/Car_dealership > They have considerable political influence and have lobbied for regulations that guarantee their survival and profitability. By 2010, all US states had laws that prohibited manufacturers from side-stepping independent car dealerships and selling cars directly to consumers. By 2009, most states imposed restrictions on the creation of new dealerships to compete with incumbent dealerships.
  - kristjansson 2y ago
    Dealerships are more entrenched, but the economics aren't that different from big box stores selling white goods, bike shops selling bikes, etc. Retailing is hard, expensive, and idiosyncratic; providing adequate after sale service is worse. A manufacturer might reasonably prefer to make and market cars, while shuffling the inventory risk and retailing cost off to someone else.
vunderba 2y ago
That's a hell of a purchase to make effectively "sight unseen" without the ability to test drive the vehicle first which you would do at a dealership. The last vehicle I purchased was certified preowned and I went through several models before landing on one - much of my decision was based on how the vehicle handled to me.
- senthil_rajasek 2y ago
  We buy so many things "sight unseen" because of the quality and reliability. As an average car consumer, I have done many test drives and gotten nothing out of it except the car salesman looking like he did something. I will buy a reliable car sight unseen like I bought my big screen t.v.
  - astura 2y ago
    Yep, I've never gotten anything out of the test drive either - my mind was already made up based on price/features when I went to the dealership. I'm more-or-less just looking for something that gets me where I need to go safely, I don't care about "handling." My last car purchase (a Nissan Sentra) I didn't even bother with the test drive, I felt it would just be a waste of time. The other thing is that some "car people" that I know will rent a car before purchasing it because the test drive is far too superficial for them.
    - itsoktocry 2y ago
      >My last car purchase (a Nissan Sentra) I didn't even bother with the test drive, I felt it would just be a waste of time. Something led you to buy a Sentra, though, a car that is middling in its class. Why?
      - astura 2y ago
        I already answered in the comment you are replying to - "my mind was already made up based on price/features" and "I'm more-or-less just looking for something that gets me where I need to go safely." I know that "car guys" can't fathom this but I've driven a LOT of car models (as I've rented a LOT) and they are (mostly) the same to me; I consider cars almost a commodity. I wouldn't even know how to compare vehicle "handling."
deleted 2y ago
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ct0 2y ago
Manufacturers want to offload the customer service as it's extremely expensive as well as limit liability. That's why dealers exist and will continue to exist.
deleted 2y ago
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jimt1234 2y ago
Does anyone know exactly how we got to this situation (required car dealerships)?
- jcrash 2y ago
  National Auto Dealers Association (NADA). Once there was a large number of these independent dealers, they had the political sway to get it made into law. https://caredge.com/guides/how-did-car-dealerships-become-so-powerful https://caredge.com/guides/how-did-car-dealerships-become-so...
pc86 2y ago
I'm not defending the dealership model but when you use the term "stealership" in any way other than making fun of people who say it unironically, you come off as the same kind of person who says "M$" when referring to Microsoft. Out of touch and impossible to reason with.
toast0 2y ago
I'm not in love with dealerships, but one thing that a dealership does is provide final QA on inbound cars. They don't catch everything, but they do catch some of the things that slipped through QA at time of manufacture. It's somewhat telling that Tesla has a bad reputation for delivered quality, and they don't have a dealership network that does final QA. Of course, dealerships also like to install unnecessary options while they're doing the other parts of dealer prep, so it's a mixed bag.
- rootusrootus 2y ago
  > final QA on inbound cars Indeed, a good dealer will spend several hours checking out the new arrivals and then detailing them to remove the transport dirt. AFAICT Tesla doesn't do this as well themselves, both my Model 3s had some fairly obvious defects that took me under a minute to spot.
gist 2y ago
> car stealerships are a relic of the past. There is no reason why a middleman should exist when buying a car. Consumers should have the option to purchase directly from the manufacturer. This is really such a classic clueless HN comment from someone who both doesn't understand business and hasn't taken the time to understand why things are done the way that they are. (My comment doesn't mean in any way that things can't and shouldn't change and/or can't be improved. But seriously calling them in part 'stealerships'. And 'there is no reason'. Thanks for having it all figured out.
- ajcp 2y ago
  ...okay, and what understanding of the business and the way things are done are you bringing to bear here? I as well don't like OPs rhetoric but if you don't have a counter why...counter?
kylehotchkiss 2y ago
> There is no reason why a middleman should exist when buying a car. There are for the politicians who benefit from the lobbying the dealerships do! I agree with you though, I just don't love the entire model of dealerships being that some local person just wants to run their own business and this is the easiest. So little brand or experience consistency across dealerships and so much perception that the person benefiting most from your transaction is the dealership itself. I have zero interest in putting any money in some locals pocket for a car transaction, I'd really rather it all just go directly to Toyota and have Toyota keep a more consistent experience across the country.
rootusrootus 2y ago
> car stealerships are a relic of the past Hard disagree. Shitty car dealers should be a relic of the past, sure, but the business model is sound. It's basically like every other product you buy. How often are you buying from the manufacturer? Almost everything you buy from a store. That's what a dealership is. Inventory is nice to have for all the same reasons you are happy the home store has inventory. And a built-in service department with a good parts and knowledge source is pretty important for a big expensive device which requires maintenance and that you're going to keep long enough for it to break a couple times. The laws protecting them, I do think should be repealed. But I don't see the business model going anywhere. And I am on my second Tesla, so I see the alternative. The buying experience is easier, sure, but otherwise it's all the same shit under a different name. And some dealers can provide the same experience, frankly. In the future all of them will, or they will go out of business.

hypeatei 2y ago

I agree they're useless middlemen but I don't believe for a second that the direct-to-manufacturer model wouldn't also be enshitified eventually too.

kevingadd 2y ago
It's what we had before the laws prohibiting direct-to-consumer/manufacturer-owned dealerships. It's hard for me to find any reliable sources that explain why we got those laws though (was it because direct-to-consumer was bad?) It seems like the EU has reined in the worst excesses of dealerships a lot, and allows direct-to-consumer. Maybe the US will follow suit in a few decades.
- kube-system 2y ago
  In the early days of the automobile, auto manufacturers didn't have the resources to have stores in every town in America. People couldn't just get a vehicle in Atlanta from Detroit if they didn't have a way to get there. Dealers both organically popped up, and some manufacturers actively engaged with local dealers to get their cars out to a broader audience (e.g. Ford with the Model T). But as those manufacturers and dealers grew, they then had the resources to operate at broader geographies, and dealers lobbed for franchise laws to "protect local businesses", etc.
- stackskipton 2y ago
  Dealerships came about because car manufacturers were demanding that all service go through their dealerships at crazy marked up prices. So dealerships started as way to "protect the consumer" but quickly because terrible places all on their own.

metalliqaz 2y ago

I think you go too far. I too have a deep dislike for dealerships, but they are not useless. Specifically, it's a place you can go to test drive cars and they have OEM-certified garages for warranty repairs. Can't test drive when you buy online. I think the main problem with dealerships is the government granted monopoly. If a dealership is in a region, most states prevent any other dealership from setting up shop in that region. That's why so many of them are passed from father to son like a dynasty. No competition at all -- and they act like it. Restore competition and the "stealership" aspect should go away.

sureIy 2y ago
To be fair, how many copies of one car do you need? Once you got 15 models on display you should be good to go for testing purposes. You don’t need a parking lot with a hundred cars.
- kristjansson 2y ago
  Some people want to buy a car _today_. Lots of people want to buy a car this week. Fewer people have the patience and funds to pay and wait for car on order.
- metalliqaz 2y ago
  Sure, most people don't need to drive away same-day with a car, but some want to. That's the value of inventory.
jcrash 2y ago
>Specifically, it's a place you can go to test drive cars and they have OEM-certified garages for warranty repairs. Can't test drive when you buy online. Tesla doesn't have independent dealerships and it's quite easy to test drive their cars before you buy.
- kristjansson 2y ago
  It's also very, very difficult to get them repaired...

kevingadd 2y ago

It's interesting, because in theory the requirement for independent dealerships could promote competition - they can compete to offer the lowest markup over MSRP, offer different addons, or offer better service. Just like going to a specialist shop for computer parts or audio gear or whatnot. But instead we ended up with a system where car dealerships basically own local lawmakers and got laws passed that not only prevent the manufacturer from competing with them, but make it really hard for people to start new dealerships to compete with them. And the experience shopping for cars at a dealership is absolutely terrible, which shows you that they don't feel any pressure to compete.

bcrosby95 2y ago
It did work that way though. I've never payed MSRP on a brand new car. Good luck doing that if all you can do is order from the manufacturer's website.
- xnx 2y ago
  Would iPhones be less expensive if you could only get them from local dealers and not Apple?
  - bcrosby95 2y ago
    It depends upon if Apple tried to set price controls and how successful they were at pursuing businesses that violated them. For example, Games Workshop doesn't like when 3rd party retailers charge less, but it's easy to find 3rd party retailers that charge less than Games Workshop on their website. In response they've increasingly made certain models online only and its always at full markup.
itsoktocry 2y ago
>But instead we ended up with a system where car dealerships basically own local lawmakers and got laws passed that not only prevent the manufacturer from competing with them, but make it really hard for people to start new dealerships to compete with them. There are practical reasons for this. People buy expensive items and expect to be able to get those items maintained and serviced. If the business was cutthroat, that could be more difficult. I don't want my dealer going bankrupt, frankly. But the idea that dealerships aren't out there competing with each other is insane. Have you ever actually bought a new car? >And the experience shopping for cars at a dealership is absolutely terrible, which shows you that they don't feel any pressure to compete. Just the complete opposite experience I've had in my lifetime of buying new vehicles. And the idea that they don't compete is an outright fabrication. You have an incredible amount of leverage buying a car, and you can shop quotes around.

jameshart 2y ago

Why is this a related note? Is the regulatory framework around car retail a contributing factor to their vulnerability to ransomware? This feels like a reflexive response to the mention of the word ‘car dealerships’, not something that will lead to a discussion of the substance of this article.

xnx 2y ago
I suppose dealerships couldn't get hacked if they didn't exist.
- kube-system 2y ago
  The activity of dealing cars will still exist even if someone else (e.g. the manufacturer) is doing the dealing.

legitster 2y ago

It is kind of a crazy model. You don't go to the Pepsi store for Pepsi and the Coke store for Coke. The exclusivity dealerships get enshrined in law is kinda nuts. Still, I think there is something to be said for independent dealerships overall for service quality. Trying to get a Tesla serviced is still something of a nightmare. In comparison the service departments of dealerships have are much more robust.

kube-system 2y ago
I'm not sure that's a good comparison. There are several middlemen before you buy a Coke or Pepsi. Usually, your soft drink is manufactured from the brand's syrup by a bottling partner, which is then distributed to a retailer, who you buy it from. e.g: https://www.coca-colacompany.com/content/dam/company/us/en/about-us/coca-cola-system-chart%20(1)-no%20footnote.png/width3840.png https://www.coca-colacompany.com/content/dam/company/us/en/a...
- legitster 2y ago
  I used to work for Pepsi-Co so I am well aware of how their distribution works. But in this case, at the point of retail it makes no difference. The store can sell as many different brands as they want. The problem is not the middlemen, it's the exclusivity arrangements that disincentivize brand competition.
  - kube-system 2y ago
    Then you should be aware that Pepsi/Coke are notorious for their exclusivity agreements in some of their retail channels e.g. I drank Coke products in my undergrad because of my school's exclusivity agreement.
  - bigstrat2003 2y ago
    Unfortunately the soda business isn't free of noxious exclusivity deals either. Restaurants almost never have both Coke and Pepsi products, it's either one or the other. As I understand it that's because restaurants get a lower price if they agree to exclusively offer one brand.

itsoktocry 2y ago

>Consumers should have the option to purchase directly from the manufacturer. They should have the option, sure. But what difference do you think this makes in reality? The process ends up being the similar. >but I admire the business model of buying directly from Tesla A lot of people don't want to buy a $40,000+ item online. Tesla understands this, which is why they opened "showrooms" to have real people walk you through the process. Oh, and let's not get started on surprise repair costs from Tesla, as if they are immune to that ridiculousness. Saying "no stealerships" (so clever) doesn't change the fact that there's a manual process involved with buying a car.

cogman10 2y ago
> But what difference do you think this makes in reality? The process ends up being the similar. The difference is the price listed is the price you pay. There's not an environment where the dealer is injecting whatever BS fee or piss poor financing they can to milk out every extra cent from the customer. The manufacture is incentivized to sell these cars at the advertised price.
- itsoktocry 2y ago
  >The difference is the price listed is the price you pay. There's not an environment where the dealer is injecting whatever BS fee or piss poor financing they can to milk out every extra cent from the customer. What does the "advertised price" mean, when companies like Tesla can, and do, change it on a whim? Is that really better? No one is stopping you from walking into a dealership and paying sticker/MSRP.
  - pricechild 2y ago
    What does Tesla do differently regarding changing product prices that they're worth calling out compared to other companies? My personal experience is that they honoured my order and delivered a vehicle superior in every metric but "turning radius". (Which has a far higher price if ordered again on my delivery day) Every company in every industry modifies products and pricing? See e.g. "shrinkflation"

AlexandrB 2y ago

> All that land they own can be used for productive economic activity or housing. No it can't. You still need places where cars can be repaired as well as storage for parts/cars inventory. The only way you reclaim some land is if service gets worse. Edit: For example, Tesla sells direct to consumers but there's still a Tesla "showroom" in my town. In terms of footprint/appearance it's basically a dealership. So where are the land savings?

mattmcknight 2y ago
The Tesla showroom near me is much smaller than a dealership. That said, still need somewhere to buy/sell used cars.
SoftTalker 2y ago
A repair shop doesn't need parking for 100 unsold cars, and it doesn't need to be in a high-traffic part of town.
- cogman10 2y ago
  Yeah, the footprint of my local mechanics are peanuts compared to the gigantic parking lots gobbled up by dealerships. Parts take space, but not 5 acres of space.
cogman10 2y ago
> No it can't. You still need places where cars can be repaired as well as storage for parts/cars inventory. The only way you reclaim some land is if service gets worse. You probably aren't going to have 10 Ford dealerships in town all selling the same models of cars. That's where the space savings comes in. As for parts/service, that also gets more streamlined as you aren't likely to have the audi/ford/dodge dealerships and instead just the 1 ford manufacturer in town.
- itsoktocry 2y ago
  >You probably aren't going to have 10 Ford dealerships in town all selling the same models of cars. That's where the space savings comes in. So do we want competition, or not?

DowagerDave 2y ago

I'm not sure why you hate car dealerships so much, doesn't your opinion apply to any distributor between the manufacturer and the end consumer? This is a the same narrative that people said about bicycle retailers as well, but there are significant problems with the DTC model, notably service and support. And if you look where dealerships are located nobody wants to build housing in a big strip beside the freeway.

simonw 2y ago
Dealerships are a special case. From Wikipedia: https://en.wikipedia.org/wiki/Car_dealership https://en.wikipedia.org/wiki/Car_dealership > They have considerable political influence and have lobbied for regulations that guarantee their survival and profitability. By 2010, all US states had laws that prohibited manufacturers from side-stepping independent car dealerships and selling cars directly to consumers. By 2009, most states imposed restrictions on the creation of new dealerships to compete with incumbent dealerships.
- kristjansson 2y ago
  Dealerships are more entrenched, but the economics aren't that different from big box stores selling white goods, bike shops selling bikes, etc. Retailing is hard, expensive, and idiosyncratic; providing adequate after sale service is worse. A manufacturer might reasonably prefer to make and market cars, while shuffling the inventory risk and retailing cost off to someone else.

vunderba 2y ago

That's a hell of a purchase to make effectively "sight unseen" without the ability to test drive the vehicle first which you would do at a dealership. The last vehicle I purchased was certified preowned and I went through several models before landing on one - much of my decision was based on how the vehicle handled to me.

senthil_rajasek 2y ago
We buy so many things "sight unseen" because of the quality and reliability. As an average car consumer, I have done many test drives and gotten nothing out of it except the car salesman looking like he did something. I will buy a reliable car sight unseen like I bought my big screen t.v.
- astura 2y ago
  Yep, I've never gotten anything out of the test drive either - my mind was already made up based on price/features when I went to the dealership. I'm more-or-less just looking for something that gets me where I need to go safely, I don't care about "handling." My last car purchase (a Nissan Sentra) I didn't even bother with the test drive, I felt it would just be a waste of time. The other thing is that some "car people" that I know will rent a car before purchasing it because the test drive is far too superficial for them.
  - itsoktocry 2y ago
    >My last car purchase (a Nissan Sentra) I didn't even bother with the test drive, I felt it would just be a waste of time. Something led you to buy a Sentra, though, a car that is middling in its class. Why?
    - astura 2y ago
      I already answered in the comment you are replying to - "my mind was already made up based on price/features" and "I'm more-or-less just looking for something that gets me where I need to go safely." I know that "car guys" can't fathom this but I've driven a LOT of car models (as I've rented a LOT) and they are (mostly) the same to me; I consider cars almost a commodity. I wouldn't even know how to compare vehicle "handling."

deleted 2y ago

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ct0 2y ago

Manufacturers want to offload the customer service as it's extremely expensive as well as limit liability. That's why dealers exist and will continue to exist.

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jimt1234 2y ago

Does anyone know exactly how we got to this situation (required car dealerships)?

jcrash 2y ago
National Auto Dealers Association (NADA). Once there was a large number of these independent dealers, they had the political sway to get it made into law. https://caredge.com/guides/how-did-car-dealerships-become-so-powerful https://caredge.com/guides/how-did-car-dealerships-become-so...

pc86 2y ago

I'm not defending the dealership model but when you use the term "stealership" in any way other than making fun of people who say it unironically, you come off as the same kind of person who says "M$" when referring to Microsoft. Out of touch and impossible to reason with.

toast0 2y ago

I'm not in love with dealerships, but one thing that a dealership does is provide final QA on inbound cars. They don't catch everything, but they do catch some of the things that slipped through QA at time of manufacture. It's somewhat telling that Tesla has a bad reputation for delivered quality, and they don't have a dealership network that does final QA. Of course, dealerships also like to install unnecessary options while they're doing the other parts of dealer prep, so it's a mixed bag.

rootusrootus 2y ago
> final QA on inbound cars Indeed, a good dealer will spend several hours checking out the new arrivals and then detailing them to remove the transport dirt. AFAICT Tesla doesn't do this as well themselves, both my Model 3s had some fairly obvious defects that took me under a minute to spot.

gist 2y ago

> car stealerships are a relic of the past. There is no reason why a middleman should exist when buying a car. Consumers should have the option to purchase directly from the manufacturer. This is really such a classic clueless HN comment from someone who both doesn't understand business and hasn't taken the time to understand why things are done the way that they are. (My comment doesn't mean in any way that things can't and shouldn't change and/or can't be improved. But seriously calling them in part 'stealerships'. And 'there is no reason'. Thanks for having it all figured out.

ajcp 2y ago
...okay, and what understanding of the business and the way things are done are you bringing to bear here? I as well don't like OPs rhetoric but if you don't have a counter why...counter?

kylehotchkiss 2y ago

> There is no reason why a middleman should exist when buying a car. There are for the politicians who benefit from the lobbying the dealerships do! I agree with you though, I just don't love the entire model of dealerships being that some local person just wants to run their own business and this is the easiest. So little brand or experience consistency across dealerships and so much perception that the person benefiting most from your transaction is the dealership itself. I have zero interest in putting any money in some locals pocket for a car transaction, I'd really rather it all just go directly to Toyota and have Toyota keep a more consistent experience across the country.

rootusrootus 2y ago

> car stealerships are a relic of the past Hard disagree. Shitty car dealers should be a relic of the past, sure, but the business model is sound. It's basically like every other product you buy. How often are you buying from the manufacturer? Almost everything you buy from a store. That's what a dealership is. Inventory is nice to have for all the same reasons you are happy the home store has inventory. And a built-in service department with a good parts and knowledge source is pretty important for a big expensive device which requires maintenance and that you're going to keep long enough for it to break a couple times. The laws protecting them, I do think should be repealed. But I don't see the business model going anywhere. And I am on my second Tesla, so I see the alternative. The buying experience is easier, sure, but otherwise it's all the same shit under a different name. And some dealers can provide the same experience, frankly. In the future all of them will, or they will go out of business.