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It's interesting, because in theory the requirement for independent dealerships could promote competition - they can compete to offer the lowest markup over MSR

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.
- rrr_oh_man 2y ago
  > you can shop quotes around And use them openly against each other to get a better subsequent quote.
  - itsoktocry 2y ago
    Exactly. And once they know you are interested, you have all the leverage, because there are so many great cars out there. You can negotiate ferociously. I once had the salesman turn his terminal around and say to me, "Have a look. By the time we pay the guys to detail and prep the car, we will make $700 off this sale. I have no more room."
    - seattle_spring 2y ago
      Which was a negotiation tactic and a lie, since dealers make a lot of their money from volume bonuses and not just the price difference of a car. "Invoice price" is also often not the actual price dealerships pay for a vehicle.
- kevingadd 2y ago
  Yes, I've bought cars a couple times, and also had to trade-in cars. Every dealership experience I had was drawn-out misery where they tried to scam me. Maybe it depends on where you live? Carmax was fairly OK in comparison to my experience with dealers but still took like 8 hours.
- nick__m 2y ago
  And the idea that they don't compete is an outright fabrication. Not when almost all the dealerships in given region are own by the same family. Here the same group own the Genesis, Infiniti, Kia, Hyundai, Mazda, Mercedes, Mitsubishi, Nissan and Volvo dealerships in a 100km radius. If I want a Mazda I can get a quote from Joe Cardealar or I can drive 50km and get a quote from his brother Steve Cardealar.
- yangikan 2y ago
  > 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. So, more competition is bad for the consumer?

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.

rrr_oh_man 2y ago
> you can shop quotes around And use them openly against each other to get a better subsequent quote.
- itsoktocry 2y ago
  Exactly. And once they know you are interested, you have all the leverage, because there are so many great cars out there. You can negotiate ferociously. I once had the salesman turn his terminal around and say to me, "Have a look. By the time we pay the guys to detail and prep the car, we will make $700 off this sale. I have no more room."
  - seattle_spring 2y ago
    Which was a negotiation tactic and a lie, since dealers make a lot of their money from volume bonuses and not just the price difference of a car. "Invoice price" is also often not the actual price dealerships pay for a vehicle.
kevingadd 2y ago
Yes, I've bought cars a couple times, and also had to trade-in cars. Every dealership experience I had was drawn-out misery where they tried to scam me. Maybe it depends on where you live? Carmax was fairly OK in comparison to my experience with dealers but still took like 8 hours.
nick__m 2y ago
And the idea that they don't compete is an outright fabrication. Not when almost all the dealerships in given region are own by the same family. Here the same group own the Genesis, Infiniti, Kia, Hyundai, Mazda, Mercedes, Mitsubishi, Nissan and Volvo dealerships in a 100km radius. If I want a Mazda I can get a quote from Joe Cardealar or I can drive 50km and get a quote from his brother Steve Cardealar.
yangikan 2y ago
> 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. So, more competition is bad for the consumer?