Quote:
Originally Posted by Bongoxxx
From what I’ve seen the two are not planning on going exclusively online - just giving customers the option to buy online and potentially avoid the dealer “experience”.
Will that mean a cheaper or more expensive result for the customer?
Hard to say, today it totally depends on your negotiating skills and understanding all the paperwork thrown in front of you with the dealer additions. Many customers do not get any discount when they buy their car today from a dealer, and /or are given a discount only to have that discount eaten up with rust protection, paint protection, fabric protection, wheel locks for $400 etc. etc.
Will manufacturers offer at invoice (like dealers get) probably not - will they sell at MSRP where you start your negotiating at the dealer - who knows…
In the end it will give customers the option to buy online/direct and make the choice to buy that way from the comfort of their home at a fixed price or go into a dealer and try to do better.
|
If one buys directly from the manufacturer there is no such thing as "invoice"; invoice is the theoretical "price" the car is sold to the dealer by the manufacturer. Publicly buying direct from the manufacturer on-line will mean that there is no price derivation between "invoice" and "MSRP" because there is no price competition as there is only a single on-line source from the manufacturer for the product.
If a manufacturer wants to offer the option to buy on line while there is still a franchise dealership sales structure then that is not a change to the legacy economic structure for the sale of automobiles we are discussing. If anything it will just be smoke and mirrors that will involve the dealership structure somehow, or third-party processors like Carvanna and the like. However, I'd bet there are non-compete clauses in the franchise contract that do not allow the Manufacturer to undersell its dealers or use third-party processors to sell cars directly to the public. As I've previously stated, the franchise dealership structure carries a lot of the cost for the sale and support of the manufacturer's products, I highly doubt dealers would tolerate losing sales directly to the manufacturer. The legacy manufacturers at this point do not have the management infrastructure in place support the sales and service end of the business. Standing up that part of the business will be cost intensive and kind of pointless since it already has and pays (dealership holdbacks, incentives, etc.) for that end via the franchise dealership model.
Again, if you want to have a good dealership experience, just pay full MSRP and say yes to all the upsell options.
But, it's always about price, if it wasn't we wouldn't be discussing it...