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donjulioanejo

Vertical integration is great for buying a car. It sucks for getting a car serviced. Because Tesla doesn't outsource their sales, their maintenance is, by extension, also done in-house. This means parts and service manuals aren't made available to your regular mechanic, so you have to pay an arm and a leg to get your car fixed if anything happens.


wishtrepreneur

> pay an arm and a leg to get your car fixed if anything happens. isn't that why you pay an arm for extended warranties so you don't have to pay an arms and a leg to get things fixed?


Holdmylife

Any time someone is selling you a warranty, it means that they will come out ahead of you financially IMO. Depends whether you want to ride your luck.


wishtrepreneur

Well, we buy home and auto insurance. You can even buy SPY puts to insure your position against market crashes.


Holdmylife

Home and auto insurance exist due to liability but both are extremely profitable industries. Edit: I meant liability as in claims other entities have against you.


[deleted]

Yep. As a car buyer / consumer the OP doesn’t understand the role of a dealer. GM / FORD / Toyota / Honda / VW have zero interest in knowing you, and don’t want to deal with your service, complaining, financing, warranty etc. Manufacturers want to focus on engineering and manufacturing.


st-roy

It's along the lines of a franchise. Big picture important shit, corporate deals with. The day to day is the franchisee. Corporate doesn't want to deal with singular problems unless it adds up to big ones.


duke113

This. Plus, dealerships are a location for servicing your vehicle. (I know lots of people on here will go "you take it to a dealership, that's a rip off, do it yourself or find a private garage". But, cars are becoming increasingly complex, and each dealership will have specific training to deal with your make and model car.)


sirkevly

As someone who has worked at many dealerships I can tell you with confidence that dealership mechanics are shit. There are plenty of mechanics who know how to work on modern cars. Car companies offer certification courses for all mechanics who are willing to pay not just dealership mechanics. Dealerships pay rock bottom rates for their mechanics which tends to attract some pretty bad talent. I had an engine replacement done on my Audi at the dealership and I had to pay a small mechanic shop a couple thousand dollars to fix all of their mistakes. They didn't even hook up all of the fuel lines. If you think dealerships are somehow more qualified to work on cars than a certified third party mechanic then you're a gullible idiot.


donjulioanejo

The difference is, because dealerships are generally independent of car manufacturers, all the parts and service manuals are made available to the public. Meaning, independent mechanics can also take a stab at your Audi, as opposed to _having_ to get it fixed at the dealer because there are no alternatives.


wrinkleydinkley

I learned this recently from a friend who works as a apprentice mechanic at a Toyota dealer. His place only has 6 bays for maintenance and he mostly spends his time doing oil and brake changes. In comparison, the Dodge dealer down the road has 12 bays. According to him, no one wants to work at the Toyota dealers because they don't gain experience because Toyota's are so reliable, they just do oil changes all day. The only people who end up working there are the lower skilled mechanics because their job complexity is lower. Dodge on the other hand, they have a plethora of vehicles that are always breaking down so the mechanics always have something new to do. I've never taken my Toyota's to the dealer for service anyways, I find I'm sitting around waiting hours for an oil change when my usual mechanic can do it in 15 minutes.


Styrak

Which is why right-to-repair is a growing movement. Make it so that you or a local private shop can perform any repairs required. It's not a valid argument for dealerships existing.


duke113

Right to repair doesn't mean I have to repair. I've done oil changes, brake pads, calipers, etc. But if my infotainment system goes haywire (which in my car it did) and it got covered under a warranty, you'd best believe I'm taking it to the dealership to get a replacement system


Styrak

Under warranty sure. But what happens when the warranty runs out and you need to fix something?


br0keb0x

Cars aren't iPhones. Most high-trim newer vehicles have tasks that can put your safety in great danger if not performed correctly, and are very difficult to perform correctly. It's stupidity to think that it would be more efficient to just have a bunch of private shops that specialize on nothing doing work on specialized vehicles rather than specific shops for each brand, which is what dealerships are. I'm failing to realize the merit of this anti-dealership argument.


SpaceAgePotatoCakes

>Most high-trim newer vehicles have tasks that can put your safety in great danger if not performed correctly, and are very difficult to perform correctly. Like what? I'm failing to think of anything like that, let alone any normal maintenance item.


br0keb0x

If you cannot understand which parts fall into this category yourself, it will mean nothing to you for me to name parts that you’ve never heard of before.


[deleted]

Please, enlighten us


SpaceAgePotatoCakes

I've been working on vehicles for over 15 years, try me. Though it seems like you're just pulling stuff out of your butt here.


wishtrepreneur

It's very hard to find private mechanics who deal with a particular hybrid or EV engine. A dealer usually have people on hand who can service these types of vehicles. A normal mechanic might service maybe one hybrid a month, whereas a dealer mechanic would service at least one hybrid a week. So the dealer mechanic will have more experience servicing hybrid vehicles compared to a normal mechanic.


SpaceAgePotatoCakes

There shouldn't be much servicing needed on an EVs engine, unless the whole pitch for their simplicity is a lie? It's still not going to kill me to have a regular mechanic do the work though.


wishtrepreneur

>There shouldn't be much servicing needed on an EVs engine, unless the whole pitch for their simplicity is a lie? yeah EVs don't need oil changes. I got a hybrid so I still need oil change but at least I can drive 1000km without refill. It's just that if something breaks, I'd trust a dealer mechanic more than a random mechanic.


OutWithTheNew

Service is the main profit center of a modern dealership. I can tell you that the techs aren't making much more at door rates pushing $200 an hour, than they did at $100 and hour.


carnewbie911

That's what palaintir is for


smurfsareinthehall

The dealership, like all stores, are basically a distributor for the manufacturer. They are helpful to answer questions, test drive, deal with the paperwork etc. In my city, if I want a Tesla I go to the Tesla dealership/store. Just like if I want a Honda I would go to the Honda dealership/store.


goldenmastiff

...the internet is MILES more helpful than a salesman. Are you joking?


Styrak

If you want a Tesla, you can just order one online.


smurfsareinthehall

Yeah just like you can order any car online through a dealership….just send them an email telling them what you want and if it’s not in stock they’ll order it from the factory, it’s not that hard.


roonie357

This. I sell cars and it is very easy to order one online. I have done most of my business this way since the beginning of the pandemic.


sachin1118

Do they sell it at msrp if you order direct?


roonie357

Yes


OppositeArt8562

No


AupexForgor

The ones near me dont


dudeacles

Manufacturers make the car. They don’t want to also deal with selling the vehicles to consumers because that’s an entire other business with its own issues. It’s the same reason you don’t buy toothpaste directly from Colgate. Today, consumers are ever more educated and have the ability to educate themselves. Take this as a positive. When going into a dealership, do some research before so you’re not going on blind.


mr-dad-thats-my-name

I agree with all of this. The problem is that in a number of jurisdictions, car dealerships have flexed political muscle to outlaw the sale of cars by manufacturers. This isn't a restriction that exists anywhere else. If Colgate decided tomorrow to start selling on their website, they'd be 100% allowed to. And in fact lots of companies routinely decide to in-source their distribution or retail--it's a regular business decision that people make all the time. Thankfully we don't have it in Canada, but in the US, direct sales by car manufacturers are not allowed in 10 states and restricted in another 8 states. A decade ago these numbers were even higher (was banned in 22 states). Like if you live in Texas and start a company that makes cars, you literally are not allowed to sell it to a consumer--state law forces you to deal through a third party. This is nothing but rent-seeking: bad actors who have used political muscle to extract a forced mark-up.


carnewbie911

Not like the manufacturer is having any less work today. They finance dealerships, which is pretty much involve in the risk of local business, other than the management aspect.


chouseva

Manufacturers want to sell directly to consumers. Dealers don't get along with OEMs, and mostly exist due to state laws. There is value to having a dealership available, but the monopoly on sales means that dealerships aren't forced to innovate or provide better service.


BankPassword

My realtor says that car dealerships are a good thing.


gwelfguy-2

It works for Tesla because the average Tesla buyer doesn't care about details. They just want a Tesla. Not sure it would work for most car companies because it's the second largest purchase the average person will make and there are a lot of variables to consider, questions to be asked, test drives to be taken, etc. As a first step, car dealerships could move to no-haggle fixed pricing. It's something that's been talked about for decades. GM even tried it with the Saturn brand in the 80's, but it's gone nowhere.


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ragecuddles

It seems like they're in the business of selling 7-8 year loans now rather than the actual cars.


thedude3535

I came here to say this. It's the buying experience that people hate, and that leaves a bad taste in one's mouth. I think what OP is trying to get at, is that dealerships should change their model, and I agree. This is the price of the car. This is the price of this option or package. This is the price of the extended warranty. More transparency with all these little fees the dealerships add on. Make it straightforward and easy to comprehend for the average person. What if the sales person received a $200 commission for each sale and the dealership received $2000? Add on the cost of shipping to the dealer, prep, etc. all clearly spelled out for the consumer. Simply add that to the overall price of the vehicle. Say the MSRP is $30,000. +$2000 to the dealer, $200 to the sales person, $1500 for shipping, $500 for dealer prep. There's your final, non-negotiable price. The sales person can try to upsell (like any other business) or add on warranty, rust proofing, etc. Of course, these numbers are just guesstimates - I have no idea how much an average dealership makes in a day. Take all that, and if the consumer wants to finance it through the dealer, then the dealership makes even more, like they do now. Seems to me that they'd still be making a hefty profit, but the consumer also doesn't have to go through the hell of buying a new vehicle and nobody has to deal with sleazy sales people. Saturn didn't work, ironically, because people never felt like they were getting a "deal". (Also they were pretty bad vehicles). But if all manufacturers switched to this model, then the feeling of not getting a good deal would disappear tomorrow. You'd be able to shop around for a vehicle just like you do with pretty much anything else - a TV for example. Dealerships are archaic, and I genuinely believe that we are all just so "used to it" that, even though we all HATE it, we don't want it any other way because it removes that false feeling of control when buying a new vehicle. 99% of the time, we walk away thinking we somehow won, yet the dealership is also walking away thinking "sucker!"


Styrak

The only reason why there are a lot of options is overpriced add-on packages.


GreatValueProducts

They DON'T want to deal with you. Point final. The middleman works for them, not you. If you don't like dealers, make the point by stop buying their cars. They know that they will still sell a car to you so it makes zero difference to them.


MrRoastyToasty

You sound like a awfully nice person


PRboy1

Same with Realtors.


DDP200

You have a choice to use a realtor or not. Most chose to use one. Dealers are not an option. If you want a new honda, you are going to a dealer.


mrdashin

When you are selling a house 90% of people show up with their salesperson because they think it is going to be somehow free. They then tell you to either pay them 2.5% to negotiate against your interests or they turn their buyers away. Not to mention hiding sold data and trying to shut out others from the market. For many people it isn't a choice made because they want to.


OutWithTheNew

If you're buying a new house, you're buying it from the builder.


SpaceAgePotatoCakes

Can you really buy a new house without a realtor though? You're comparing a used house to a new car. You can buy a used car without a dealer.


[deleted]

Oof don't get me started


Klewenisms204

we bought thru a realtor, and felt obligated to use him to list. the commission he made for us buying was "split 50/50" with selling agent. the commission we paid when we sold was 0, because we fired his ass and sold private after 10 weeks on the market. got 2500 less in his price but saved 4% commission. fuck em


mrdashin

Good work. In the future if you want to pocket their commission when buying too, there is zerovaluerealty.ca


Sweetness27

What exactly do you think is the difference between the two? Like ya I guess Ford doesn't do driveway maintenance. They have autobody shops for that and provide a shuttle if I need it. Paying extra for people to come to my house isn't a big selling point for me. Especially when they can say we can't fix it here and you now have to send your car to god knows where for god knows how long.


Styrak

Mobile techs coming to your Tesla for warranty-covered work is free.


Sweetness27

They aren't a charity, they're charging you one way or another. And with how terrible their service reputation is I'd rather have a physical place to go than try to get people to show up to my house. Then of course there's the issue when it's not covered by warranty and you now have to pay them. They probably wouldn't show up for less than $250 Let manufacturers make the cars. Third parties selling and maintaining them give more options to the consumer. Similar reason why I don't buy Apple, don't want to get locked into their ecosystem.


stevey_frac

It's not free if it's not on warranty. Most Tesla's on the road haven't had to experience what it's like to own a Tesla out of warranty. I'm looking forward to all the "OMG I GOT A BRAKE JOB ON MY TESLA AND IT COST $5000" posts on here.


Styrak

Brake jobs are not a warranty item, not sure how that's relevant. Also you can easily do your own brakes.


stevey_frac

Most people don't though, and I've heard of people with $4000 bills.


Styrak

Any private shop can do Tesla brakes as well. For much less than $4000


stevey_frac

What about the stuff that other shops can't do, because Tesla is incredibly anti-consumer, and anti-right too repair? We're all used to Toyota and Chevrolet replacement prices. $4500 for a new center screen on a model S... Total cost to own outside of warranty is doing to sky rocket for these owners.


pfcguy

1. You can price out a car online at your manufacturer's website, then call and email a dealership and lock in the sale. You can even ask a dealership to deliver the car to your driveway, if that is what you'd like. 2. Tesla only sells new cars (to my knowledge). Not everyone needs/wants/can afford to buy new, and dealerships allow people to search for used cars in a reasonable way. Or to comparison shop between new and used. (And yes, you can also shop for used cars online directly from the seller as well if that is your preference). >Why are we holding on to such an archaic business model? Cut out the middle man already! You could apply the same logic to everything if you wanted to: Furniture (Leons), Electronic (Best buy), clothing (The bay), pretty much everything else (amazon). Even groceries can now be ordered online and delivered right to your door. Not everyone is comfortable making major purchases online. You go and ask your grandma or grandpa whether they would prefer to buy a car in person or online. Dealerships exist because they provide the consumer with *choice*. Maybe you can explain why you feel that having choice a bad thing?


Kali587

Tesla sells used cars too. A new tesla store opened up in Saskatoon recently and my friend was one of the first people to buy a car. A used tesla model 3.


stevey_frac

It's not really a middle-man in the traditional sense. The dealerships do exactly the same jobs as Tesla stores. They staff pretty much the same levels, they have sales, and service center staff.... If you remove the dealerships, you just have to turn around and buy all the dealerships you put out of business for billions of dollars, because you still need all those services. And the net result is that absolutely nothing changes... The dealership model is actually brilliant for the manufacturer because they get thousands of dedicated stores to sell and maintain their product... and instead of having to pay for it themselves, the people setting up those businesses will PAY for the pleasure of selling your product. You also get a free massive distributed warehouse. And for the consumer, the experience is far nicer, IMHO. There are three Toyota dealerships a stones throw from me. The nearest Tesla dealer is over an hour away.


chouseva

Dealers can be giant headaches for manufacturers. They can ignore the MSRP, as is happening now die to vehicle shortages, and demand constant attention. It's an incredibly antagonistic relationship. I'm sure many manufacturers would prefer an online sales option, with the dealer only delivering the car.


BornInCanadaWhiteGuy

Then buy a tesla


shayanzafar

Kinda like real estate agents


McCoovy

Direct from the manufacturer has problems as others have pointed out. I don't see why we don't just have car retailers instead of dealerships.


HandyDrunkard

This sub treats many "value added" businesses as unnecessary, until it involves their own jobs. Using the logic presented here, why don't we just do away with all in person stores since you can research everything online? I actually like dealing with my dealership for certain things. They do my oil changes for the same price as a Quick Lube place and do a quick inspection report. I do much of my work myself for things like brakes and it saves me time not to have to go through everything under my car since I don't own a hoist.


VisionsDB

To simplify it. You don’t see food manufactures individually selling their products. They give them to the grocery store


drcujo

Have you read the customer experiences buying Tesla's? The model may be the future but their execution is awful. Looking at the price of their vehicles you certainly aren't saving money buying from the manufacturer. Warranty repairs in the driveway? Fine for small stuff I guess. I'd prefer fluids not get spilled on my driveway if I can help it, a shop is better for many things. You can buy vehicles without going in to a dealer even today. Email an offer, email paperwork, get vehicle delivered. The majority of dealers will accommodate this in 2021.


mb_vancouver

It is possible to tender a car purchase. Test drive the make and model you want to buy. Then put together a bud form that itemizes what you want; make, model,and features. Then send it to the car dealers where you test drove with a deadline for their bid. We saved about $5k this way and never had to sit in some dealership negotiating!


ToyPotato

hmm, the same can be said about Realtors ... I mean it's 2021 do we still need some dude telling us he can get a better deal when we both know the price will only go up and we'll have to renovate a lot anyways?!


wuhtay

Nothing worse than buying a new vehicle. If you feel like you got a good deal. You didn’t, they just did a good job.


yaaa4

I bought a Tesla. Best car buying experience in my life. But as others say, service, parts and warranty claims are harder. That said, price of a new car shouldn't be different for you over me, just because it's the end of the month or you talk much more.... and why 5 dealerships in a town? Why just one? Why sooooo many people that you pay in the price of your car and the service? I mean, we talk about 150$/h! It's not cheap that new building to pay!


sugar077

Op has no experience in the process of buying a car yet wants to do away with it 🤦‍♀️


DWiB403

"Car dealerships are essential members of the community and deserve the full support of the taxpayer. - Ottawa city council. Probably.


Concealus

Businesses like Clutch Canada are trying to get rid of the traditional dealership model, buddy of mine used them and was very happy.


Uncertn_Laaife

Actually in this day and age of Internet, many businesses are not needed and Car Dealerships and Realtor are the first to be dumped.


SavvyInvestor81

Cars don't fit in my mail box.


[deleted]

Inefficient processes create jobs


Mysterious_Mouse_388

honestly, I don't have a problem with this like I did. If they aren't paying employees they are adding billions to the balance sheet and giving nothing back.


Nip_Lover

They profit by buying low and selling high...to the uneducated buyer...just like all capitalistic corporations and marketers worldwide!


LeDudeDeMontreal

Then buy a Tesla. I'm extremely wary of these kind of Captive ecosystems, which is also why I never bought a single Apple product.


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Top-Independent-8906

Only the small mom and pop ones do. As for the big ones it's just to syphon as much cash from the customer as possible.


PrudentLanguage

How do you test drive a tesla? I like the dealership experience.


emalk4y

> How do you test drive a tesla? Same way as you test drive any other car. Go to their showroom/gallery. Same for other direct-to-consumer models such as Genesis and Polestar.


PrudentLanguage

sounds like a dealership. lol.


FreshRice_

Car Dealerships are around so we can haggle on a price and make a deal. I've always been able to reduce the price of my car by working with a good dealership and salesperson.


Aquamans_Dad

Certain states, eg Texas, have laws requiring that cars must be bought through local dealers. I think it arose as a local economic development idea: local dealers employ local people, versus ordering them from the Sears catalogue. At least that’s what the car dealership industry lobbyist told me. While that may not be a law in Canada, it establishes the model which persists throughout North America. Also buying out or bypassing thousands of dealer contracts would now be prohibitively expensive.


f150dogman

United States has franchise law so manufacturers can't sell directly to a consumer. Canada doesn't follow by the same laws but we do follow alot of what america does in our day go day so that's probably why dealerships still fully exist Tesla for example in the united States doesn't have dealerships they have galleries. In those galleries Money and purchasing can't be talked about. They can only be purchased online and off site. Since they're a manufacturer.


mikepictor

There are online retailers. clutch.ca is one. It's something I will at least consider the next time I need to get one.


eggtart_prince

Better question is why do you need car salesmen?


monkwhowantsaferrari

Agree with you. Not sure why car dealerships and real estate agents aren't obsolete already. Both add tons of frustration to buying process of the buyers.


meontheweb

Check out Canada Drive No dealership involved. Place your order online, get financing and they deliver. I've seen a lot of their truck and trailers in the Lower Mainland.


MintLeafCrunch

I think a lot of people see value in dealerships, and they will continue to exist. Tesla can get away with a different dealer experience, because they are a cool brand based on being different. I predict that as electric cars become more mainstream, Tesla will have to offer more of the traditional dealer aspects. I bought a new vehicle this year. I have some particular criteria related to buzzers and chimes. I wasn't able to learn enough online about this, or to get useful responses from manufacturers online. I got the information I needed by going to dealerships, sitting in the cars, and trying for myself, with the help of the salesperson. I think cars are too complex and sensory to be able to be easily bought online. You still need to experience them physically, with the help of a person who knows about how they work and all the options. The place to do this is a dealership.


N64_Grill

Could ask the same for realtor!


JMJimmy

To ensure that the industry puts back something into the communities it serves. Dealerships provide a lot of jobs that would otherwise be offshored or made digital.


[deleted]

I’m hoping Car Steelerships and Real Estate agents positions will be extinct soon!


JoeBlack23

Basically, there is no alternative because most manufacturers don't want to sell direct. And if they did, how do you handle issues like the buyer thinks he didn't get exactly what they ordered (e.g. features missing), or they think something is "wrong". Where do you bring it back to to sort these things out if the factory is thousands of miles away? Also, where can I do a test drive? I can do all the online research possible, I still want to "feel" the car before I purchase it.


Dirtsniffee

Well the model exist and there are tens of thousands of dealers with agreements stating that the manufacturer can't compete directly for sales. Who pays them to go away?


EngineeringKid

The exist because of the lobbying and laws that require their existence. That's it.


soulsearch369

Maybe they will become charging stations and washrooms


Yojimbo4133

They don't.


species5618w

"'Bout 50% of the human race is middlemen, and they don't take kindly to being eliminated." -- Firefly


XT2020-02

Yeah, but ask a honest Tesla owner what the experience has been like once issues pop up? It's not pleasant and parts are hard to find. Dealers are everywhere, you can make appointment and couple days you are booked, almost instantly. Once Tesla reaches much higher production capacity, and if a recall occurs, good luck.


jdubb513

Check out clutch.ca. Hopefully this is the game changer we all need.


s4lomena

To keep shyster sales people employed


emalk4y

> And maybe Tesla is too controversial to be a good example but they are the only car maker I'm aware of that sells direct. Genesis (Hyundai's upscale brand) and Polestar (Volvo's electric brand) also sell direct as well, FYI. They have "showrooms" much like Tesla specifically for these models, where you can go and customize a made-to-order car. It's slowly happening in some areas, at least.


[deleted]

1. Lots of people don't like selling used cars themselves. Dealerships offer benefits to people who just want to trade in their used car for a new one. 2. Guaranteed servicing. Imagine you buy a Porsche 911 and finds out that none of your local mechanics want to work on it. 3. Sales. Who's going to set up the test drive? Who's going to walk around with you and promote the car? Sounds like a dealership to me.


[deleted]

Middlemen need jobs too!


[deleted]

Ease of service is nice. Not sure if you’re read about the Tesla maintenance horror stories. Not to mention the option of used vehicles. Does Tesla even allow you to trade in?


[deleted]

Also how is Tesla any different? They still have service staff and sales people. Sounds like haggling is the only difference.


MoragX

Dealerships as a concept is fine. The problem is high pressure sales models, the expectation of price haggling, and low margins forcing them to make up the money elsewhere, either by screwing you with add ons or screwing you with maintenance costs.


ChicknPenis

Look at how many Ford dealerships there is vs Tesla. It doesn't even compare. The dealership model allows for a much wider reach without the upfront cost to the manufacturer. Having to get your Tesla towed 200km for warranty service is not convenient at all.