Question's in the thread title.
Just curious why if everyone despises dealerships, why we don't have direct from-the-manufacturer car sales?
There's something rattling around in the back of my head that says to do so would be illegal, but I can't figure out for the life of me why that would be, and I can't remember where I saw/heard that.
I think there were some legal reasons, but isn't one of the Chinese/Indian planning to start up US sales with a direct to consumer model?
I think that I remember reading something about 15 years ago about Amway making an attempt at direct sales. Obviously, it never came about.
Always wondered that myself. Seems like total B.S. really. Here is the car, here is the price. Done. A car's price should have no bearing on how skilled a consumer is a haggling.
Of course now my job depends on dealerships somewhat (I work for a subsidiary of AutoTrader.com) so I have stopped asking that question.
Hooray dealerships!
(runs out of the room....)
I believe Daewoo had factory direct to customer sales...of a sort. That is, there were no dealerships, just guys selling you the car. It didn't last, if it existed, because as much as folks say they hate dealerships...no one wants to buy a car/make a huge investment, when there is no one to go back to for any complaints.
I also seem to remember (tho I could be wrong) that during the Vietnam era...tho it may still exist, you could buy a new car ot truck from guys who represented the factory, but for all intents and purposes were not dealers. I mean, they had no "store" like the Chevrolet and Ford dealers near you but instead worked out of "kiosks" at base exchanges (usually overseas). I'd have to pick up a recent copy of Army Times, or it's Air Force, Navy, and Coast Guard equivalents, to see if this still exists.
http://www.justice.gov/atr/public/eag/246374.htm said: In the United States, however, direct manufacturer auto sales are prohibited in almost every state by franchise laws requiring that new cars be sold only by dealers. These bans on direct manufacturer sales are part of a broad array of state laws that bar manufacturer ownership of dealers and regulate entry and exit of dealers through territorial restrictions and provisions on dealer termination.
Scion is about as close as you can get, or used to be. Configure online, pick up at dealership.
Totally wild-a$$ guess:
I'd bet there is some non-compete language in the dealer franchise agreements, to the effect that only franchised dealers may sell new cars to retail customers.
Even the cars from the big rental car companies often have a dealer stickers on their rump.
Osterkraut wrote: Scion is about as close as you can get, or used to be. Configure online, pick up at dealership.
I believe most manufacturers offer that in a sense. However, in the end, the mfgr is still selling the car to the dealer and the dealer sells it to you.
In a way, Saturn was a valid attempt at a "direct to consumer" feel with the no-haggle pricing, but even that went away a few years before the end.
The Manufacturer Direct model will not work as long as the American consumer is not capable of repairing their own vehicle.
My dealership brethren: Imagine, if you will, Sally HomEc taking delivery of her Prius from the UPS guy but the Prius has a defective battery pack!
As anything like this, it's a combination of things:
1) Cars are a big purchase and with state/local fees and registration, most people wouldn't know where to begin to get a car registered and legal to drive. Seems like any big purchase requires "help" (cars, boats, houses and, at one time, appliances)
2) The dealer network for service is important. Although manufacturer service centers wouldn't be too big of a stress.
3) The number 1 reason is, dealers want to sell you a car. It's not illegal in all 50 states because your government is smart enough to figure it out, it's because dealers line the pockets of the government officials.
I'm not trying to sound harsh because the same can be said against realtors. Make sure the groups contribute to the campaigns and the politicos will make sure there are laws in the books to protect you.
-Rob
In reply to John Brown:
Well that's just silly. Nothing could go wrong with a Toyota!
Joey
I'm a moe-ron.
joey48442 wrote: Well that's just silly. Nothing could go wrong with a Toyota!
We'll see. I have a certain 'reputation' to take something to a mechanic and the mechanic goes "funny, I've never seen one of those go wrong before".
And I've got a Prius booked as a rental if I ever make it to the US...
John Brown wrote: The Manufacturer Direct model will not work as long as the American consumer is not capable of repairing their own vehicle. My dealership brethren: Imagine, if you will, Sally HomEc taking delivery of her Prius from the UPS guy but the Prius has a defective battery pack!
Doesn't it have a return label on the inside of the glovebox? Stick that sucker on the windshield and call UPS to come pick it up.
Remember this?
http://gm.ebay.com/ga3/search/gmprogram
GM / Ebay partnership thing, no one was buying through it
John Brown wrote: The Manufacturer Direct model will not work as long as the American consumer is not capable of repairing their own vehicle....
To bad there aren't businesses out there that are capable or repairing motor vehicles...
...I wonder why no one has tried that, seems like they would get a lot of business, what with all the cars around...
I think Hitler tried this as a business model in the late 30's....didn't work out...there were planes and bombs and people with funny accents and guns all coming over for a look-see.
JFX001 wrote: I think Hitler tried this as a business model in the late 30's....didn't work out...there were planes and bombs and people with funny accents and guns all coming over for a look-see.
That was all a simple misunderstanding. It was all supposed to be a Formula V theme park until someone took it all too seriously.
bludroptop wrote: Totally wild-a$$ guess: I'd bet there is some non-compete language in the dealer franchise agreements, to the effect that only franchised dealers may sell new cars to retail customers. Even the cars from the big rental car companies often have a dealer stickers on their rump.
This is closer to the truth. It has more to do with existing dealership franchise agreements and local/state laws protecting them than laws specifically banning manufacturer-owned dealerships. In many cases, an automaker will own a handful of stores. As long as they can prove they're not directly competing with an existing franchise, they're generally OK.
Existing dealers are hard to get rid of in this country - plenty of legislation protecting them, no matter how poorly they perform. It takes a long time and a lot of resources to end a franchise agreement in most states.
John Brown wrote: The Manufacturer Direct model will not work as long as the American consumer is not capable of repairing their own vehicle. My dealership brethren: Imagine, if you will, Sally HomEc taking delivery of her Prius from the UPS guy but the Prius has a defective battery pack!
I thought about this when I bought my first house. I bought from the builder, spec'ed the house at the builder's office and then watched it progress. My loan was written by the builder and later sold to a mortgage arm of a major bank (much like a dealership sells its financing at profit). My home came with a standard warranty and a 60-day period during which I could list all the faults and a contracted supplier would show up to fix them (as in your Prius example). So, the model is there with a big purchase/asset.
It would take a huge event to change the way the business is done, however. As in, states wholesale overturning legislation. I doubt it will ever happen.
Its all a big joke. Lobbyist give money to the government folks to get what they want. If a dealership can have a car lot/service center so can Ford. Apple has their own stores and they sell their crap at Best Buy. It's all a big money scheme, everyone has their hands in each other pockets. I blame the labor unions (runs and hides while laugh hysterically) !!!
slefain wrote: Always wondered that myself. Seems like total B.S. really. Here is the car, here is the price. Done. A car's price should have no bearing on how skilled a consumer is a haggling. Of course now my job depends on dealerships somewhat (I work for a subsidiary of AutoTrader.com) so I have stopped asking that question. Hooray dealerships! (runs out of the room....)
Works at a dealership so x2!
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