[pz619]

Originally Posted by afadeev

Custom orders may be discouraged (not sure why), but as long as they are available, why aren't you using them?
I've never bought a single BMW off-the-lot. Ever. Always custom ordered my cars. Got exactly what I wanted at the price that I wanted 100% of the time.





That might be true IFF you only look at the selling part of the equation.
However, there is a far bigger customer-OEM relationship exposure during the service experience (in-warranty and out). That is where NOT having a dealer mediating your potential disputes with an automotive OEM become a huge problem for the vehicle owner.

As a Tesla owner, I can tell you from the first-hand experience what dealing directly with an OEM-owned service center looks like - you get randomly absolutely screwed!
Here are some of the examples:
1). Service appointments can only be scheduled online, and only 4+ weeks into the future. Annoying if you can park your Tesla and drive another vehicle, but highly problematic if you don't have spare cars.
2). Many concerns get dismissed as "within spec" or "not covered under warranty". Last time I had an issue with binding right-rear caliper, they declined in-warranty coverage and offered to "lubricate the caliper" for a you-pay service fee of $566. What the @#$%?!?
3). Different answers to "covered under warranty" claims from different service centers. Purely at the whim of local service managers or most recent HQ directions. So if you don't like the answer from service center A, you can book another +4 weeks appointment at center B.
4). Your chance of getting a loaner goes from 99% @BMW to about 5% @Tesla. The rest of the time you may (or may not) be offered Uber credits. In my case, Uber doesn't serve the area between Tesla Service Center and my house, so they are worthless.
5). 4-hour repair service estimate takes 5+ days to actually get done because HQ fired 1/2 the mechanics as part of some idiotic cost-cutting measure, and service centers are now permanently understaffed.
6). Other times things work out great, and Tesla might even send a mobile service "ranger" to get work done in your own driveway!
7). If you don't like anything, your ONLY recourse is the court system. There is no appeal, and usually no human to talk to.

If you want to see what OEM-owned service center experience looks like, feel free to peruse Tesla owner boards:
https://teslamotorsclub.com/tmc/forums/model-3.137/

Other than that, direct sales model is great!


a

Yep, service is fair. My comments are really limited to the sales aspect, which I didn't make clear. And yes, Tesla service does leave quite a bit to be desired. I just scheduled service minutes ago (your post reminded me to do it) to replace the air conditioned seat fan. Nearest service date? 18 days from now.

[Click_ID]

Originally Posted by xlover

you might have an arguement if franchise laws did not fiercely protect dealer territory and even dealer existence.

Show me a market where a legacy dealer has to compete with a corporate store down the street and if I think they both are doing a crappy job selling to the customer I can open my own between the two and try to put them out of business. That is the only real free market competition.

I always find it hilarious when dealers are gouging the customer they point to “free market” but in reality car buying is one of the most regulated government protected markets for the seller.

Franchise laws do protect dealers, no doubt. That’s why OEMs haven’t already gone full direct.

But those same laws are also the only reason you and I get any leverage as buyers. Dealers still have to compete with each other on price inside their territories. That’s what creates the discounts off MSRP.

Direct to consumer sales doesn’t create more competition, it kills it. You don’t get to “open your own store” or pit a corporate location against another. You get one checkout button on the manufacturer’s site at full MSRP, welcome to nirvana.

Dealers might be protected, but at least they fight for your business. OEMs never will.

[JTK44]

Originally Posted by Click_ID

Dealerships are not perfect. A lot of them suck, and nobody’s defending useless add-ons or games in the finance office.
But, they do bring value. Having working for a manufacturer they’re the only leverage buyers have against MSRP. (outside simply not buying/boycott) Competing quotes mean you can negotiate. You lose that when you can’t cross shop.

Direct sales doesn’t remove markup. It just shifts it to the manufacturer. Tesla, and rivian proved it, margins are higher because they keep what dealers used to take. Buyers don’t see the savings.

MSRP isn’t fake, Its the manufacturer’s target. The only reason you sometimes pay less is because dealers compete for your business. Remove them and MSRP becomes the ceiling. Manufacturers are not charities. Any savings goes in their pocket.

Dealers fight for survival, true. But the side effect is buyers keep leverage. With direct sales, you don’t. I’d rather deal with a sales manager who wants to move a car this month than a manufacturer who will never change its online price.
I like having the choice of where I do business.

Dealership=the devil you know

Couple of points:

If we were on a direct marketing each manufacturer would be competing against each other: BMW vs. Mercedes vs. Audi, etc.

I have never known any middleman, a dealer for example, to reduce the price. Those salesmen wearing $1500 suits, all those finance guys, etc. must be paid. Where do you think the money to pay them comes from?

Home Depot, Costco, and other stores have shown that removing the middleman reduces prices and saves the customer money!

Just my $.02[/LIST]

[-Ryan-]

Good riddance. I can't wait for the day where I can just order a car online and don't have to deal with car salesmen and their bs.

[Altamate]

Originally Posted by JTK44

Couple of points:

If we were on a direct marketing each manufacturer would be competing against each other: BMW vs. Mercedes vs. Audi, etc.

Home Depot, Costco, and other stores have shown that removing the middleman reduces prices and saves the customer money!

Just my $.02[/LIST]

I agree with you but,
You need to find a different example to make your point as Home Depot and Costco are just a different kind of middlemen.

[Higgs Boson]

Originally Posted by -Ryan-

Good riddance. I can't wait for the day where I can just order a car online and don't have to deal with car salesmen and their bs.

you already can. literally any brand is available to purchase at MSRP by just calling and telling whoever answers the phone which car you want. I bet they even bring the car and paperwork to your house. and yes, you can even do it "online."

[Higgs Boson]

Originally Posted by JTK44

Couple of points:

If we were on a direct marketing each manufacturer would be competing against each other: BMW vs. Mercedes vs. Audi, etc.

I have never known any middleman, a dealer for example, to reduce the price. Those salesmen wearing $1500 suits, all those finance guys, etc. must be paid. Where do you think the money to pay them comes from?

Home Depot, Costco, and other stores have shown that removing the middleman reduces prices and saves the customer money!

Just my $.02[/LIST]

Unless the manufacturer sells all their cars for invoice instead of MSRP, the only thing that will change is who is wearing the suit; factory reps instead of "salesmen." I can tell you who won't be wearing nicer clothes. You.

[M 3Rilla]

Originally Posted by F32Fleet

Interesting but these are small markets. US would be really interesting because they couldn't pull tricks with dealer "sales" or order to hit their numbers


Edit: Anyone know of BMW re-opened their corporate dealership in Manhattan NYC?

Iirc some 25 yrs ago it was the only corporate dealership in the US.

Not sure when, but they did indeed reopen. I purchased my 17 F80 from them; an impressive team in Manhattan, the standard bearers.

[JTK44]

Originally Posted by Altamate

I agree with you but,
You need to find a different example to make your point as Home Depot and Costco are just a different kind of middlemen.

Costco sells at 10% above cost. They make money on membership.

Home Depot buys in bulk and then sells.

[D_SheerDrivingPleasure]

There are already BMW Niederlassungen (corporate-branch dealerships) in 20 cities in Germany. I got a much better price on a new G80 build compared to the local independent franchise.

[D52M550]

Originally Posted by phader

Second that.

I never buy in my market. Easy transaction and huge savings every time. Flights are dirt cheap and have them pick you up from the airport. Driving it home is the fun part. You really get familiarized with the car and voila break in is done, on easy going freeway miles.

100%…That’s exactly what I do and it’s an awesome experience every time!

[Fugly M3]

Originally Posted by Alpine300zhp

I suggest broadening your reach and find an excellent client advisor outside of your area that you can buy from with ease and ship car to your house or make it a mini-vacation by buying at the store and drive it home. Jon Shafer in California would be an excellent place to start.

I can personally recommend Jon Shafer at Santa Maria BMW.

[eluded]

Originally Posted by JTK44

Costco sells at 10% above cost. They make money on membership.

Home Depot buys in bulk and then sells.

65% of their profit was from membership last quarter. Their markup cap is 14% and an extra point for Kirkland signature.

[Phillies8008]

Originally Posted by afadeev

Custom orders may be discouraged (not sure why), but as long as they are available, why aren't you using them?
I've never bought a single BMW off-the-lot. Ever. Always custom ordered my cars. Got exactly what I wanted at the price that I wanted 100% of the time.





That might be true IFF you only look at the selling part of the equation.
However, there is a far bigger customer-OEM relationship exposure during the service experience (in-warranty and out). That is where NOT having a dealer mediating your potential disputes with an automotive OEM become a huge problem for the vehicle owner.

As a Tesla owner, I can tell you from the first-hand experience what dealing directly with an OEM-owned service center looks like - you get randomly absolutely screwed!
Here are some of the examples:
1). Service appointments can only be scheduled online, and only 4+ weeks into the future. Annoying if you can park your Tesla and drive another vehicle, but highly problematic if you don't have spare cars.
2). Many concerns get dismissed as "within spec" or "not covered under warranty". Last time I had an issue with binding right-rear caliper, they declined in-warranty coverage and offered to "lubricate the caliper" for a you-pay service fee of $566. What the @#$%?!?
3). Different answers to "covered under warranty" claims from different service centers. Purely at the whim of local service managers or most recent HQ directions. So if you don't like the answer from service center A, you can book another +4 weeks appointment at center B.
4). Your chance of getting a loaner goes from 99% @BMW to about 5% @Tesla. The rest of the time you may (or may not) be offered Uber credits. In my case, Uber doesn't serve the area between Tesla Service Center and my house, so they are worthless.
5). 4-hour repair service estimate takes 5+ days to actually get done because HQ fired 1/2 the mechanics as part of some idiotic cost-cutting measure, and service centers are now permanently understaffed.
6). Other times things work out great, and Tesla might even send a mobile service "ranger" to get work done in your own driveway!
7). If you don't like anything, your ONLY recourse is the court system. There is no appeal, and usually no human to talk to.

If you want to see what OEM-owned service center experience looks like, feel free to peruse Tesla owner boards:
https://teslamotorsclub.com/tmc/forums/model-3.137/

Other than that, direct sales model is great!


a

Just because Tesla is terrible doesn't mean that everyone is terrible. There's no reason that dealerships can't continue to exist as repair shops. There's not reason manufacturers can't setup regional repair centers, etc.

Tesla is pretty terrible all the way around. I'm certainly not using them for any kind of benchmark.

[JTK44]

Originally Posted by Phillies8008

Just because Tesla is terrible doesn't mean that everyone is terrible. There's no reason that dealerships can't continue to exist as repair shops. There's not reason manufacturers can't setup regional repair centers, etc.

Tesla is pretty terrible all the way around. I'm certainly not using them for any kind of benchmark.

Using Tesla as an example is just plain silly!

A better example would be the Ford MachE Mustang: those cars are sold at MSRP, no dickering. Either you buy from inventory or order online. All the dealer does, for a set fee, is prep the car.

As to competition: At first the MachE was being sold at a premium. That only lasted a few months. Ford then had to adjust the price, just like Tesla to meet market conditions.

Just my $.02.

[Phillies8008]

It's funny how I don't need dealerships for virtually anything else I buy in order to be "protected". The idea that dealerships protect the consumer from absolutely anything is, at best, laughable. They're predatory middlemen that add nothing but cost.

While you could argue that all retail stores are middlemen – and technically I suppose they are – there's a much stronger argument that they're bringing actual value to consumers. They aggregate products in one place so that I don't have to go to a thousand stores to get stuff, they handle warehousing and stocking, and they handle items that realistically can't be bought direct from the manufacturer – are you really doing to order straight from General Mills when you want a box of cereal? From whomever is the produce supplier in your area when you want apples?

Cars, however, are a different beast. They're already segregated by brand, so it's not like they're providing me with the convenience of one-stop shopping or anything like that. As other brands have shown, ordering directly from the manufacturer is possible and better.

If dealerships were smart, and weren't able to be lazy by buying politicians, buying a car would be as easy as it is with Carvana. Do everything online, don't play games, don't deal with some asshole F&I guy who's entire living is made by ripping you off, and have the car show up at your driveway. Seriously, buying from them was the absolute easiest and best car purchase experience I've ever had. Every dealership could do this, but won't because it denies them their chance to screw their customers.

[ASAP]

Originally Posted by D_SheerDrivingPleasure

There are already BMW Niederlassungen (corporate-branch dealerships) in 20 cities in Germany. I got a much better price on a new G80 build compared to the local independent franchise.

In the US... you have family owned smaller dealerships and larger dealerships (often multiple) owned by corporations i.e. Sonic Auto that have nothing to do with the manufacturer... almost universally you will get a better deal at the family owned ones. Direct sale (i.e.) manufacturer owned isn't allowed in the USA due to lobbies and predatory dealer practices...

I agree that a direct sales model would be best as has been proven by Tesla however I don't see the laws changing anytime soon to allow that.

[ASAP]

Originally Posted by Click_ID

Franchise laws do protect dealers, no doubt. That’s why OEMs haven’t already gone full direct.

But those same laws are also the only reason you and I get any leverage as buyers. Dealers still have to compete with each other on price inside their territories. That’s what creates the discounts off MSRP.

Direct to consumer sales doesn’t create more competition, it kills it. You don’t get to “open your own store” or pit a corporate location against another. You get one checkout button on the manufacturer’s site at full MSRP, welcome to nirvana.

Dealers might be protected, but at least they fight for your business. OEMs never will.

This right here can also destroy resale value... if one group i.e. OEMs sell, then there is really only one price... its unfair to compare any of this to Tesla for 2 reasons -

1) Tesla is an ev manufacturer... where no one wants a used one and the older batteries.

2) Tesla is a poorly ran company that is solely focused on shareholder returns whilst leeching off the taxpayer. There are people out there that thought the Cybertruck was a vehicle for anything else other than hype lol.

[SoCali E36]

Why anyone would be in favor of paying MSRP and not being able to get a better deal is beyond me.

[Phillies8008]

Originally Posted by SoCali E36

Why anyone would be in favor of pay MSRP and not being able to get a better deal is beyond me.

Because MSRP is, essentially, a meaningless number. It's a marketing tactic to give dealers a number to start with, so when they knock money off of it you feel like you're getting a deal. There's no reason to believe that today's MSRPs are actually what BMW would be willing to sell the car for. It's just a number that's high enough to provide dealers with room for profit when they inevitably* undercut it.

I said this before, but it's like when a store raises the price of an item 20% this week so that they can sell it for 20% off next week. When you buy if for 20% "off", you feel like you've gotten a bargain. But all you've really done is pay the price they wanted in the first place. Same thing with MSRP: they really want MSRP - $x, so MSRP gives them room to reduce the price while still getting what they want and you feeling like you're some great negotiator.

The difference between dealerships and direct sales is that if you want to go in and just pay the dealer MSRP, they're more than happy to take the extra money, whereas the price is the price is the price with direct sales; you're not going to pay more than the number they really want for the car.

Now add it the slimy BS the dealer adds in – that most people get at least partially stuck with – and are you really doing better than you'd do just buying the car from BMW?

Why does buying a car have to be different than buying almost anything else? What makes it so special, other than "that's the way it is"?

*Yes, there are some circumstances where they won't budge off the MSRP, and in fact add to it. But this is even worse for the arguments in favor of dealers.

[Striker01]

If you cut out the dealer there will be a complete absence of any discount or deals.

I also don’t know how you will go about if you have an issue with your car.

You might have to play the role of that middle man that the dealer once acted as.

[Phillies8008]

Originally Posted by Striker01

If you cut out the dealer there will be a complete absence of any discount or deals.

I also don’t know how you will go about if you have an issue with your car.

You might have to play the role of that middle man that the dealer once acted as.

Why would you assume there'd be no discounts or deals? Do manufacturers never run specials? Do they never discount items that have too much inventory, or as a mechanism to goose sales? Why would cars not behave like every other good or service? Are people really under the impression that the only reason a car is ever discounted is because of dealerships?

Obviously manufacturers are going to have to address maintenance, whether that's them running regional service centers or current dealerships morphing into only service centers. I don't think anyone's saying that you'll just be on your own.

But again, this is all just fantasy, because it ain't happening in the US in our lifetimes. Lawmakers are going to remain bought by NADA.