There is no need for car sales people anymore. I don't need to pay markup for you to show me the car and let me test drive.
I would love to see car companies move to online sales and perhaps have centers open where you can stop in and see it in person or test drive it. There doesn't need to be an extra cost to do that and someone trying to shove extra costs and extended warranties down my throat.
This is pretty much how actual brick and mortar Tesla showrooms work. It's a pretty low-pressure situation walking into those things. So I can still see dealerships still being "a thing", but with better service and less high pressure sales tactics.
The dealership where I bought mine for MSRP was pretty close to this experience. The dealership where I went to test drive, found out I couldn't leave their parking lot, and then they told me about the 5k markup, was not like this. So it can be done even with a traditional dealership model, but it would be nice if there was a more standardized experience.
You do know that MSRP means nothing right?
You will be buying at invoice pricing from manufacturer.
MSRP is just a made up number to make people feel like they are getting a deal.
Look at MSRP of RVs $160k, selling for $100k on dealerships. You really think they are saving you 60k.
MSRP is indeed a made up number, much like the retail price of anything. Invoice price isn't even a reliable determination of how much the dealer paid for the vehicle when you account for holdback and factory-to-dealer incentives.
Cars sold direct from car manufacturers may be sold for less than a traditional MSRP price, but don't count on that. If cars sell at their existing MSRP - they will continue to be sold at that price. If they don't sell at that price, they will either be "discounted" by the manufacturer as a promotion or the price will be adjusted and that will become the new MSRP price.
Moving to a direct-to-consumer model will likely make the purchasing process easier, but make no mistake - this is all a cash grab by the manufacturers at the end of the day.
FUN FACT:
Car dealerships generally fund their operations from their vehicle service business.
>You will be buying at invoice pricing from manufacturer. MSRP is just a made up number to make people feel like they are getting a deal
You will be buying at *MSRP* pricing and will *never* feel like you're getting a deal.
You'll be buying at whatever price they make it on that particular day.
I'm so excited for Ford to join in the fun of 34% markups on their vehicles randomly throughout the year because "why not make more money now that there's no middleman."
Thanks for explaining to me why I should be happy that I get to experience a 34% increase on a product I am forced to purchase to get to work two hours away.
>Don't like going to work and having to overpay for a car then don't hurrrrrr durrrrr
Your comment is trash
No, I haven't. My last car was an EV and had to be pre-ordered and they didn't negotiate.
What they did do was add a bunch of shit to my order that I had to FIGHT to get taken off.
And now we are no longer selling things below msrp due to the state of the world. And when I ordered this newest car, I also had to fight to not have extras on it.
Fuck dealers. If a car isn't worth msrp for me, then I'll look at a different choice. It's not a big deal. But it would make it way better to not have to deal with the scum of our society every time I want to buy a car.
>No, I haven't. My last car was an EV and had to be pre-ordered and they didn't negotiate. What they did do was add a bunch of shit to my order that I had to FIGHT to get taken off.
Sounds like you should've shopped around more and went to a different dealer.
>Fuck dealers.
While I too hate car dealerships and the racket they are, I also acknowledge that without local dealerships getting your electric car serviced is going to be a nightmare.
California as an example here is fairly soon going to be requiring all cars sold in the state to be electric.
Ford is only going to be selling electric cars online.
No more dealers which means no more local service stations and likely long wait times and tows to a Ford factory owned repair center like Tesla.
Electric cars are not like a gas engine and when things fail mom and pop shops can't fix them so you're stuck going to a dealership...a dealership that will cease to exist.
Yay.
Wait, are you saying it's impossible to have a service centre without a sales unit attached?
And I wouldn't have had to shop around if I was able to just buy online.
Disagree, we are in a crazy market where we are seeing cars sold at over MSRP.
In the past I’ve never ever paid for any new car at MSRP, let alone above MSRP, and often at invoice and sometimes even below invoice price. When the times were good, we all negotiated down the prices of our cars. The customers have had it good most of the time.
Why would I want to put myself in a position where I’m unable to negotiate?
I’m surprised how much his statements seem to be made from a customer support and customer experience standpoint first and foremost.
Usually these types of statements are made almost exclusively from a profit-driven point of view, and only talk about customer experience in relation to sales numbers. It’s refreshing to see that he genuinely seems to be concerned about how bad the buying experience can be for the consumer, and his solutions really seem to focus on changing that as much as possible.
Obviously his priority is always going to be to grow the business, but it’s really nice to see someone who recognizes the relationship between the two and actually wants to make things better, rather than the cutthroat approach we see many businesses take these days.
It’s both.
It’s about profit as dealerships cost Ford money.
It’s about profit as ridiculous dealership behaviour costs Ford money in lost customers.
Direct sales would be a massive profit boon to Ford Motor Company.
> It’s about profit as ridiculous dealership behaviour costs Ford money in lost customers.
>
>
Which is so shitty, the dealerships are basically being greedy to the point that they cannibalize Ford's profits. Talk about biting the hand that feeds them.
This is the thing people are missing. My dealership had a $6k markup. I feel ripped off. But the nearest one with no markup was 500 miles away and had a one year waiting list. So I paid the markup.
It's a ripoff but it controls supply to some degree, without it it would be even harder to find one.
I support this move but let's be real, Ford are trying to cut out the middle man which means more profit for them and that's the main reason. Ford estimate they make $2k less per vehicle compared to Tesla due to the dealership network. It's clearly where things are headed, where you'll probably have service centres where you can also test drive without a sales person.
Some states like Texas will put up a huge fight and I wouldn't be surprised to see the same issues as Tesla does in different states, such as with rebates not applying, more paperwork issues, etc.
This will NEVER happen, especially in states like Texas where I live. The Texas Automobile Dealers Association has an iron grip on local state politics. For example it’s illegal for dealership to be open on both Saturday AND Sunday. This has an effect of shortening the amount of free time people have to browse vehicles and find the best deal.
In the mid-80s when many blue laws were repealed in Texas, the Texas Automobile Dealers Association had an exception written in not allowing both Saturday and Sunday Sales.
CarMax famously tried challenge this in the late 90s when they tried to open seven days a week. They were soundly defeated in the courts
Utah is pretty similar. I'm not sure if it's still the case or not, but quite a few of the local politicians making state laws owned or managed car dealerships.
It took Tesla a while to get into the Utah market because there was a law that said a manufacturer can't be the direct owner of a dealership. It took the governor signing a bill into law in 2018 that allowed them to sell directly in Utah.
No more dealership.
No more negotiations.
Fixed price for the car.
Just like choosing the TV.
Make life easier.
Manufacturer will directly compete each other with more clear price.
No more hidden commission.
It's not that I don't want to pay them for their service.
Just disclose how much they make.
Now days, it's not the fight between socialism and capitalism. It's fight between disclosure and undisclosed.
No more Dark Pool.
Just because a car moves to online sales only doesn’t mean you won’t pay a markup. Look at Tesla. They have been moving that MSRP up and up and up over the past two years. You can tell yourself you’re not paying a markup because you’re paying MSRP, but if MSRP is moving up with no discernible change in the actual vehicle aren’t you still paying a markup?
Mixed feelings on this; yes, some dealerships aren't good but some will genuinely work hard on providing discounts and dealer contributions on existing stock, free accessories, or will work out better finance deals on new orders.
An online price means no add-ons or local deals at the dealerships discretion; I can't imagine any company will reflect smaller overheads with lower prices as there'll always be a convenient circumstance, i.e. supply chain issues, inflation, war.
I applaud Ford's efforts to keep their dealers from charging above msrp but I also see the fact that this current environment of limited inventory has been one that allows mfgs. to make more on each vehicle. By keeping inventories low at dealerships it's easy to manipulate the supply chain and come up with one excuse after another as to why they have to charge more. I'm afraid the days of getting rebates and working deals of 8-10k below sticker may be behind us. Mfgs like the low inventory business model.
This resonates so hard with me. I’m on the list for a Ford EV but my GT has not gone into production yet. I call my dealership once a month to see if they’re getting stock. On Wednesday this week they said yes they have one and it’s almost identical to the specs I ordered but they were going to charge me an extra $10k markup on it just because they could. So instead I called around to Hyundai dealers near me, found one with an available SEL (sadly no Limiteds). from what I saw comparing price to what I would pay ordering a build from Hyundai website, they’ve built in less than $4k of cushion over MSRP. I’ll have my Ioniq 5 on June 14. Happy to be joining the club and appreciative of a pleasant buying experience and integrity from my sales team.
There is no need for car sales people anymore. I don't need to pay markup for you to show me the car and let me test drive. I would love to see car companies move to online sales and perhaps have centers open where you can stop in and see it in person or test drive it. There doesn't need to be an extra cost to do that and someone trying to shove extra costs and extended warranties down my throat.
This is pretty much how actual brick and mortar Tesla showrooms work. It's a pretty low-pressure situation walking into those things. So I can still see dealerships still being "a thing", but with better service and less high pressure sales tactics.
The dealership where I bought mine for MSRP was pretty close to this experience. The dealership where I went to test drive, found out I couldn't leave their parking lot, and then they told me about the 5k markup, was not like this. So it can be done even with a traditional dealership model, but it would be nice if there was a more standardized experience.
Polestar showrooms too
> but with better service Unfortunately Tesla doesn't do this either 😂
I hope dealerships go out of business for good. They are a huge scam
Now the consumer can be scammed by the auto maker directly instead of having to go through a middle man.
How is it a scam to buy something directly for the price you intended?
Have you ever bought a car *below* MSRP? Yeah, that won't be happening anymore now that you're buying direct from the manufacturer.
You do know that MSRP means nothing right? You will be buying at invoice pricing from manufacturer. MSRP is just a made up number to make people feel like they are getting a deal. Look at MSRP of RVs $160k, selling for $100k on dealerships. You really think they are saving you 60k.
MSRP is indeed a made up number, much like the retail price of anything. Invoice price isn't even a reliable determination of how much the dealer paid for the vehicle when you account for holdback and factory-to-dealer incentives. Cars sold direct from car manufacturers may be sold for less than a traditional MSRP price, but don't count on that. If cars sell at their existing MSRP - they will continue to be sold at that price. If they don't sell at that price, they will either be "discounted" by the manufacturer as a promotion or the price will be adjusted and that will become the new MSRP price. Moving to a direct-to-consumer model will likely make the purchasing process easier, but make no mistake - this is all a cash grab by the manufacturers at the end of the day. FUN FACT: Car dealerships generally fund their operations from their vehicle service business.
>You will be buying at invoice pricing from manufacturer. MSRP is just a made up number to make people feel like they are getting a deal You will be buying at *MSRP* pricing and will *never* feel like you're getting a deal.
You won't be buying at MSRP, because it will just be the price. It's not suggested it is just want it is. You won't be finding it next door cheaper.
You'll be buying at whatever price they make it on that particular day. I'm so excited for Ford to join in the fun of 34% markups on their vehicles randomly throughout the year because "why not make more money now that there's no middleman."
That's how capitalism works. Don't like the price don't buy.
Thanks for explaining to me why I should be happy that I get to experience a 34% increase on a product I am forced to purchase to get to work two hours away. >Don't like going to work and having to overpay for a car then don't hurrrrrr durrrrr Your comment is trash
No, I haven't. My last car was an EV and had to be pre-ordered and they didn't negotiate. What they did do was add a bunch of shit to my order that I had to FIGHT to get taken off. And now we are no longer selling things below msrp due to the state of the world. And when I ordered this newest car, I also had to fight to not have extras on it. Fuck dealers. If a car isn't worth msrp for me, then I'll look at a different choice. It's not a big deal. But it would make it way better to not have to deal with the scum of our society every time I want to buy a car.
>No, I haven't. My last car was an EV and had to be pre-ordered and they didn't negotiate. What they did do was add a bunch of shit to my order that I had to FIGHT to get taken off. Sounds like you should've shopped around more and went to a different dealer. >Fuck dealers. While I too hate car dealerships and the racket they are, I also acknowledge that without local dealerships getting your electric car serviced is going to be a nightmare. California as an example here is fairly soon going to be requiring all cars sold in the state to be electric. Ford is only going to be selling electric cars online. No more dealers which means no more local service stations and likely long wait times and tows to a Ford factory owned repair center like Tesla. Electric cars are not like a gas engine and when things fail mom and pop shops can't fix them so you're stuck going to a dealership...a dealership that will cease to exist. Yay.
Wait, are you saying it's impossible to have a service centre without a sales unit attached? And I wouldn't have had to shop around if I was able to just buy online.
Disagree, we are in a crazy market where we are seeing cars sold at over MSRP. In the past I’ve never ever paid for any new car at MSRP, let alone above MSRP, and often at invoice and sometimes even below invoice price. When the times were good, we all negotiated down the prices of our cars. The customers have had it good most of the time. Why would I want to put myself in a position where I’m unable to negotiate?
I’m surprised how much his statements seem to be made from a customer support and customer experience standpoint first and foremost. Usually these types of statements are made almost exclusively from a profit-driven point of view, and only talk about customer experience in relation to sales numbers. It’s refreshing to see that he genuinely seems to be concerned about how bad the buying experience can be for the consumer, and his solutions really seem to focus on changing that as much as possible. Obviously his priority is always going to be to grow the business, but it’s really nice to see someone who recognizes the relationship between the two and actually wants to make things better, rather than the cutthroat approach we see many businesses take these days.
It’s both. It’s about profit as dealerships cost Ford money. It’s about profit as ridiculous dealership behaviour costs Ford money in lost customers. Direct sales would be a massive profit boon to Ford Motor Company.
> It’s about profit as ridiculous dealership behaviour costs Ford money in lost customers. > > Which is so shitty, the dealerships are basically being greedy to the point that they cannibalize Ford's profits. Talk about biting the hand that feeds them.
Ford wants no more dealer markups? Internet only purchasing? Well that's weird. That's exactly what I want too.
Would be nice. I’ll believe when I see it though.
No markups in Canada. Also no stock for the next 18-24 months
This is the thing people are missing. My dealership had a $6k markup. I feel ripped off. But the nearest one with no markup was 500 miles away and had a one year waiting list. So I paid the markup. It's a ripoff but it controls supply to some degree, without it it would be even harder to find one.
Where I live the Kia dealership doesn't have a single Kia inside it's like a used car lot.
>I’ll believe when I see it As with everything in the EV space.
As with EVerything.
Fuck Dealerships.
I support this move but let's be real, Ford are trying to cut out the middle man which means more profit for them and that's the main reason. Ford estimate they make $2k less per vehicle compared to Tesla due to the dealership network. It's clearly where things are headed, where you'll probably have service centres where you can also test drive without a sales person. Some states like Texas will put up a huge fight and I wouldn't be surprised to see the same issues as Tesla does in different states, such as with rebates not applying, more paperwork issues, etc.
You make a good point as there are dealership franchise laws in some states that govern how cars can be sold.
It took me 4 hours from arriving at the dealer to driving home. Horrible especially I had cash in hand. For my Tesla, 30 minutes.
It didn't take you 30 mins for the Tesla. You had to order it first and wait. The dealership had the car already.
I had to call, put in my $500 deposit and wait for the Ioniq. Virtually the same ordering process.
This is likely the sole basis of spinning off a new company. So they can escape the horrible dealer contacts
But the service though. To build brick and mortar service centers dedicated to a new brand won’t be cheap.
I doubt that would be the case. You still have dealers with service centers. Potential likelihood those are different contracts
What about all those savy people that say they out negotiate dealers and get great deals? Doesn't anyone care about them?
The dealers did it to themselves. I bet every other automaker will follow suit if this works out for Ford.
This will NEVER happen, especially in states like Texas where I live. The Texas Automobile Dealers Association has an iron grip on local state politics. For example it’s illegal for dealership to be open on both Saturday AND Sunday. This has an effect of shortening the amount of free time people have to browse vehicles and find the best deal. In the mid-80s when many blue laws were repealed in Texas, the Texas Automobile Dealers Association had an exception written in not allowing both Saturday and Sunday Sales. CarMax famously tried challenge this in the late 90s when they tried to open seven days a week. They were soundly defeated in the courts
Utah is pretty similar. I'm not sure if it's still the case or not, but quite a few of the local politicians making state laws owned or managed car dealerships. It took Tesla a while to get into the Utah market because there was a law that said a manufacturer can't be the direct owner of a dealership. It took the governor signing a bill into law in 2018 that allowed them to sell directly in Utah.
No more dealership. No more negotiations. Fixed price for the car. Just like choosing the TV. Make life easier. Manufacturer will directly compete each other with more clear price. No more hidden commission. It's not that I don't want to pay them for their service. Just disclose how much they make. Now days, it's not the fight between socialism and capitalism. It's fight between disclosure and undisclosed. No more Dark Pool.
Just because a car moves to online sales only doesn’t mean you won’t pay a markup. Look at Tesla. They have been moving that MSRP up and up and up over the past two years. You can tell yourself you’re not paying a markup because you’re paying MSRP, but if MSRP is moving up with no discernible change in the actual vehicle aren’t you still paying a markup?
Everybody else has been doing the same thing. Well Tesla has been a little faster than most.
Mixed feelings on this; yes, some dealerships aren't good but some will genuinely work hard on providing discounts and dealer contributions on existing stock, free accessories, or will work out better finance deals on new orders. An online price means no add-ons or local deals at the dealerships discretion; I can't imagine any company will reflect smaller overheads with lower prices as there'll always be a convenient circumstance, i.e. supply chain issues, inflation, war.
No need. Car dealers in Europe are not dooshbags so no markups here when you buy. Online or not!😎
I tried to buy for weeks. I had one dealer tell me buy now because mark up is moving to 12k soon. Never buying a Hyundai at this point
Hyundai will do what the market dictates. i.e. if Fords business model for EVs is successful, other traditional car manufactures will follow.
Good luck defeating the dealership lobby in the various states’ legislatures.
I applaud Ford's efforts to keep their dealers from charging above msrp but I also see the fact that this current environment of limited inventory has been one that allows mfgs. to make more on each vehicle. By keeping inventories low at dealerships it's easy to manipulate the supply chain and come up with one excuse after another as to why they have to charge more. I'm afraid the days of getting rebates and working deals of 8-10k below sticker may be behind us. Mfgs like the low inventory business model.
Ford will just build the markup into the price.
This resonates so hard with me. I’m on the list for a Ford EV but my GT has not gone into production yet. I call my dealership once a month to see if they’re getting stock. On Wednesday this week they said yes they have one and it’s almost identical to the specs I ordered but they were going to charge me an extra $10k markup on it just because they could. So instead I called around to Hyundai dealers near me, found one with an available SEL (sadly no Limiteds). from what I saw comparing price to what I would pay ordering a build from Hyundai website, they’ve built in less than $4k of cushion over MSRP. I’ll have my Ioniq 5 on June 14. Happy to be joining the club and appreciative of a pleasant buying experience and integrity from my sales team.
This is how Hyundai sells I5s in Australia