The current dealership model creates and tolerates incentives for dealers to rip me off at sale time. It also injects a set of complexity into the model, where if I choose to buy a car of brand X, I then have to comparison shop for the exact same car at multiple dealerships.
I've bought two Teslas, and the nice thing about the process is that it doesn't matter where I pick up the car, I get the same price, and the exact same experience. Tesla also won't try to rip me off on buy-ups like tire protection and seat protection. (Then again, Tesla really needs price protection because they significantly dropped the price of the Model Y shortly after I bought it.)
One of the most annoying situations was a Subaru dealer that made me sit through a pitch for various upsells (that were rip offs) and then sign a form that I listened to them.
I really hope the Amazon car purchases explicitly prohibit upsells and other nonsense. Just bring me the car, give me the keys, and stay long enough to make sure that the car works. No BS upsells.
So much this. I'd much rather pay a shipping fee from the factory to my address than a dealer handling fee.
I honestly wish I could just order a Tacoma straight from Toyota, pay for it to be shipped to me, and avoid the dealership rigamarole altogether. I'm okay waiting my turn in line from the factory. I don't want to deal with artificial dealership "market adjustments." I don't understand why we haven't deregulated the car sales industry to allow (and even require?) manufacturers to directly sell to consumers, circumventing dealerships entirely. It would upend that industry and force them to prove they actually are a value-add service.
There was a program where you could fly to Germany and buy a BMW there, drive it for a few days and ship it home. Ended up being cheaper than buying it at a local dealership. Not sure if it is still available.
Dealerships are local jobs programs in some sense and they got State laws enacted to secure their positions. Tesla went up against them and won I guess.
My guess is the Amazon program will be similar to the Costco program.
Volvo and Porsche are the only makers left with these programs. Audi, Mercedes, and BMW have them on permanent hold last I looked (since the pandemic).
Lost them a sale from me, as that was a big point in their favor. Without it I ended up somewhere else.
Not only do dealerships provide local jobs but generally their owners tend to be well to do and donate prolifically to local elections, where dollars are normally otherwise scarce because of their lower participation rates.
Which is a terrible reason to keep predatory businesses around.
> but generally their owners tend to be well to do
You can always make a lot of money when you're ripping off the public
> and donate prolifically to local elections
"Bribes local politicians". Car dealerships seem like some kind of mob racket. They are a third party that managed to insert themselves in the middle of transactions that shouldn't involve them, they extract a ton of money from the public while providing no value, and then bribe lawmakers to make sure they can keep the rigged game going.
Many motor vehicles are large dangerous multi-ton vehicles using a dangerously volatile fuel source. There's a reason we require extensive licensing. We need to ensure that only appropriately trained users are sold these dangerous devices. At about 43000 fatalities per year, they are one of the top causes of deaths in the US. You can't just let everyone operate machinery like that.
This is setting aside the scope for direct to consumer sales exploiting uninformed customers. Remember: safety regulations are written in blood.
> We need to ensure that only appropriately trained users are sold these dangerous devices.
If someone without a license wants to buy a tacoma and look at it sitting in their driveway what's the problem exactly? It's not like they'll get a license plate without a driver's license and they won't get very far driving without plates.
Car dealerships are leeches that trive on obscure pricing schemes and partial information, the idea that we need them in the name of security is an extreme stretch.
Their line of argument is also completely negated by the secondary market where cash is king and cars change hands with few questions in the presence of cash.
Your statement seems like a total non sequitur. How does making sure purchasers are adequately licenced have anything to do with deregulating the dealership model?
Regulations are written in blood. Remember Chesterton's fence. If you cannot articulate the reason for why dealerships exist, you are not equipped to argue for their deregulation.
The current model increases safety. People have bought dangerous devices on Amazon before. And people have used these dangerous devices irresponsibly. We shouldn't encourage their proliferation.
There is no Chesterton's fence here, the history and current regulatory environment surrounding auto dealing is well known.
Dealerships exist in general because early 20th century people liked buying from specialized stores instead of department stores or mail ordering them. Dealerships exist today because of regulatory capture.
Dealerships in the US do not play any role in determining the ability of the purchaser to operate the vehicle. It is legal and possible to purchase a vehicle without a drivers license in all 50 US states.
I know exactly why dealerships exist, and I'd bet most here do as well. The argument is that the reasons they exist are outdated, and only continue because of lobbying.
> The current model increases safety
How, specifically? Would a Tesla be more safe if it were bought from a middleman dealership as opposed to directly from the manufacturer? Would Toyotas be less safe when purchased directly from Toyota?
Similarly, is there any evidence that a used car purchased from an independent seller is statistically less safe than one purchased from a dealership?
> If you cannot articulate the reason for why dealerships exist, you are not equipped to argue for their deregulation.
How about you focus on the argument, rather than an ad hominem? Or is that your only argument?
The dealership model and the States' protection of their business model has nothing to do with safety. These laws were intended to protect the business models of the franchise dealers from the rapidly-consolidating manufacturers. Dealers saw the consolidation happening, were scared that the automakers would strong-arm them, and lobbied their states to enact these protection laws.
The subtle evaluations of a dealership salesman cannot be emulated by an automated system. Humans are superior to machines for evaluating other humans. Beware unintended consequences of deregulating. Society needs more regulation (written in blood), not less, especially in these trying times where corporations, with their outsize power, are trying to get direct access to consumers to exploit them. Systems like dealerships are load-bearing in society, designed to reduce the pressure of direct impact of large corporations against individuals.
As recent studies have shown, automatic systems only encode our biases. Amazon has an extensive behavioral advertising and targeting business. Is it safe to let then extend this to something like this?
If your concern is that sales to unlicensed individuals would occur, it’s extremely easy to implement drivers license validation. How would that possibly encode biases during time of sale? They’re not going to change the price later just because you upload your license or whatever; if they did it would be transparent.
Dealerships don't do anything to enforce safety with car sales. If anything they do the opposite, given the pressure to upsell people on larger, faster, and more expensive cars.
Are you suggesting that direct-to-consumer sales would somehow result in unlicensed buyers from obtaining motor vehicles? Because it seems a trivial thing to verify that you have a valid drivers license before transferring ownership.
It also appears that you're legally allowed to purchase a vehicle without driver's license already, so this is a moot point: https://www.nasdaq.com/articles/can-you-buy-a-car-without-a-...
As to direct sales somehow uniquely exploiting customers: Have you ever tried to actually buy a card from a dealership?
We walked out of a dealership about 10 minutes before we planned to sign on a car because the sales manager started trying to pull all of this slimy crap on us. We had a trade in that we were clear had problems, listing the exact problems. He assured us he wanted the car, but the moment it came to value it - suddenly it had all sorts of different problems. I do a lot of work on my cars, so I knew it was all scare tactics and BS.
By contrast, my Tesla experience was the exact opposite. Schedule a test drive, walk into the store, get the car for 30 minutes, then run the numbers. When I told them I wasn't prepared to buy, I felt absolutely no pressure. In fact, the only pressure I felt the entire time was a statement that the federal tax credit is likely going to end and deliveries are mid-December. Even then, it was clear they were telling me for _my benefit_ (to not miss savings) rather than trying to get me to sign immediately.
Those will become "in-app" purchases before long. Tesla already has this with self-driving. Many car companies are charging to enable features with a software switch now, which are more what I mean by "in-app", i.e. they will move them from sale time to prompt you for seat warmers on a really cold day, then charge you monthly to keep it. It's the idea that I need to pay a subscription for a car feature that irks me
The BS is the stuff like windshield crack protection, undercoating, extended warranty, and tire protection. You can’t really upsell those when you leave the dealership.
Sure, you can do other kinds of upsells, but those tend to be less scummy and when you don’t have a salesman breathing down your neck pressuring you it’s going to be less effective.
The issue (for many) is things like negotiating, financing, trade-ins, and car availability.
Aside from the availability thing (especially the past couple of years), you can largely make the rest go away by no-haggle cash on the barrel and deal with your own trade-in. But most buyers don't actually want that.
When I bought a car the summer before last, it took a while to get the car delivered (and the dealer wasn't exactly candid that "in transit" actually meant "not actually built yet"). But I was paying cash and they actually offered a ridiculously good trade-in and a few upsells were mostly about saying no a bunch of times and ultimately getting the price of "factory options" added to my trade-in. It took a couple hours and a few phone calls while waiting for the car to be delivered, but honestly not a big deal for an expensive, rare purchase.
The last three vehicles I've bought, from three different Toyota dealerships, the options, color, etc. were negotiated completely over email, no phone calls or physical dealership visit. I always pay cash and I never trade in. At the end of the process, which wasn't excruciating, I asked for and received, in each case, a price fixed to the penny. In each case I quite brutally asserted, multiple times for each purchase, that if the price was even 1 penny more than the agreed on price stated in email, I was going to walk, even though I had to drive at least 100 miles in two cases. When I sat down at the dealer, I reasserted my guarantee that if the price was even 1 penny more, I was going to walk.
We still had to sit through videos and the standard sales pitches for the undercoat, etc. Can I shout now? Lasting an hour. For the last Prius they said well this particular vehicle has an optional security registration or some such that is installed in the car. I said remove it. Maybe two minutes of harrumphing about how I am exposing myself and I got quite acidic actually. Well whatever they actually did the price I wrote a check for was exactly what we had agreed to over email.
Now I don't actually care if what you like to do in your non-work time is to sit through car dealership sales pitches for nonsensical stuff, but I don't. And I want the option not to have to burn my time for this. It really is a wonder how normalized for many people it is to feel how pleasant it can be to sit through add on advertising while doing some sort of necessary activity where at the conclusion I'm going to write a check for tens of thousands of dollars. They're so helpful! Rather than what it is, which is time theft, condescendingly done.
I'm not a fan of car dealerships but, in the category of things you pay $10s of K for in cash (other than maybe expensive travel bookings), car purchases are actually pretty low effort relative to most things so long as you don't need financing. Certainly don't deal with builders/contractors.
So it turns out in the last year I have sold a remodel problem house and bought another all the way across the country. We could drill down and ask why my sold house tilers were so awful. To the point I paid to have it all Boschhammered up and replaced with engineered wood. Delaying the move. How about not. Why would you point to the dysfunction of another unrelated industry as being worse to justify the stupidity of the original topic here?
Old house sold for cash, "new" house bought for cash.
Does anyone spending tens of thousands of dollars not value their time? I think they do!
Problematically, in some states you can deduct the price of a trade in from the taxes you pay on the new car. What this means in practice is that even if you sell private party, the net amount you get may end up being almost the same unless the dealership is truly robbing you on trade in value due to the deduction on new car tax.
> I really hope the Amazon car purchases explicitly prohibit upsells and other nonsense. Just bring me the car, give me the keys, and stay long enough to make sure that the car works. No BS upsells.
I tried going to four separate Hyundai dealers in my area about a year ago as my lease was ending. Every Elantra was marked up at least $5K and the dealers tacked on some other interior protection plan and other crap. I visited one of the dealers again recently and they are still doing the markups. Sorry, but I am not going to pay $33K for a car that should be $23K. It’s really sad I can not buy a car at MSRP…
It has pluses and minuses. Sales and service become a monopoly. It's like the Apple model. It can work well, but it's really bad is the company doesn't provide good service.
Well with cars it might be a decade before you get to exercise your market power. Also, since so much of the experience can be hyperlocal it can be hard to do the research that could steer you elsewhere.
Being pitched fabric protection or GAP insurance is no big deal. Just opt out and move along. I actually opted into fabric coverage on a lease because my kids were little and BOY was I happy I opted in after they destroyed the back seat with a ruptured bottle of hand lotion.
The process might be onerous but it's far from a "rip off" or some sort of scam. Every car I've bought dating back 20 years had very helpful sales and finance people willing to explain everything. In one case they even disclosed their profit margin in the case of the GAP insurance (6%).
Agreed. Pay cash! I bought an ATV and financed it and that was a mistake. I signed more documents than when I bought my house and I was only financing $6K! Took 1.5 hours despite arranging everything online before I arrived (or so I thought). The next year I bought one with cash, it took maybe 15 minutes.
In my experience, it's PDI that takes forever, because the techs are backed up. Typically I finance, and I don't spend any longer than 30 minutes signing forms and declining protection plan BS.
You search for Toyota Camry. Your search returns thousands of generic car accessories.
You filter by category: Automobiles. You still need to scroll through 15 pages of miscategorized vinyl wraps and seat covers, but eventually you see a few actual car listings.
One has lots of good reviews, but the reviews seem to be praising a completely different product, like a phone charger.
You shrug and click buy. Two days later, you receive a rebadged Geely Panda delivered from commingled inventory by a seller called JGLEWYU.
You fill out the return form and drop it off at the nearest Whole Foods parking lot.
The delivery driver takes a picture of a jiffy bag on your doorstep and Amazon accepts this as irrefutable proof that the Toyota Camry was delivered to your address
Well, unless they are bringing in ten thousand options with brands and models having names like OSDKIFRU, KDJFRIUER, CNUEIR, IOUYRRF, CSOIFR, LOIWUEB I have no reason to buy from Amazon.
They also need to nail the user experience of buying a Land Rover and receiving a LAND RONER. Having an extra middleman to the transaction in addition to the dealerships is a valuable first step though!
Hyundai is a top tier automaker. In the last decade they leapfrogged America manufacturers in build quality and are basically on par with Japanese manufacturers for quality. They caught a bad rap recently for the cheapness of their low end models and missing anti theft features but they were offering much more bang for your buck at the low end which is why they were popular
> Importantly, the end seller of the vehicle is still the dealer; Amazon’s platform will be the middleman between the customer and the dealership. It’s unclear whether the company is talking to other automakers about listing their vehicles on the site.
Doesn't get rid of dealerships. Still interesting though.
Classic example of the 99.9% not being able to lobby enough to beat the 0.1% of scalpers.
Highest priority is to take down the ~5 US medical cartels. After that, I imagine only real estate matches anything that has anti-consumer and pro-business as US medical. Then.... after that, dealerships?
I was excited because that’s literally the killer feature. The dealer is the worst part because the bad ones tie up inventory and the good ones are always sold out and not getting enough allocated to account for their higher volume
What kind of assurances do you get from dealers? My experience with dealers makes me want to pay for the car, buy no optionals and never go back again.
I recently bought a used vehicle from a dealer. I immediately took the vehicle on a 3 hour car trip. The car broke down at near the end of the trip, surging engine, then died, then wouldn't restart. It restarted after a few minutes and I limped (under 60) the rest of the way to destination. The dealer had 2 drivers bring me a (free) loaner car for 5 days while they fixed my vehicle for free. I used to work at a few other car dealerships and at least at those places as well as the one I bought from, this is pretty standard operating procedure. Amazon going to do that?
I had a similar experience. Bad antilock manifold on a new model Nissan. Took three weeks for the part to appear. I suspect there was a design defect that Nissan had to figure out. Meanwhile I drove a dealer loaner for free. All warranty work, recall work and other repairs were handled correctly over a 12 year period.
Last year I bought a used truck sight unseen from a dealer on the other end of the continent. They handled all the shipping hassle competently, working with the shipper, bank, title stuff in both states and everything else. They were 100% forthright on everything about the vehicle, including live video inspection, proof of maintenance, etc. I got exactly what I expected.
I actually bought a Hyundai from a dealership 3 hours away and the salesman drove down to where I live (with his dad!) to deliver it.
That was nice, but the main assurance is that I know who sold me the car and there will be no passing of the buck on warranty service or anything else. Amazon has no place in the transaction - even if they offered some or other thing, I don't trust them trying to weasel into the deal. I'd probably wind up with an expensive Armor All subscription I need to cancel.
I hate dealerships in general - but - I've been lucky to have good sales people in the two car purchases I've made so far. The trick for me was to be very blunt and clear on what I'm trying to do. Usually I do the research about the car and what I want ahead of time. I've also researched what kinda pricing is normal. I'm also ready to sign the car if the price is right and I like it or walk out if I don't like.
My sense is that salespeople are primed by people who haven't done any research on what they want and doing all that on the spot at the dealership. They're also not exactly sure what they want and are susceptible to be convinced one way or the other. Even when they like a car, most people tend to be not sure and want to try another car or dealership. Hence the usual deal with pricing it higher, offering free accessories, offering a discount and all that jazz.
I’ve had great success, strongarming two Chevrolet dealerships into doing what they should’ve done anyways by threatening (and in one case, actually, following through) to write a letter to Chevrolet, explaining how a particular dealer was making them look very bad.
Hmm. A $1200 generator I bought on Amazon was a lemon; the control board somehow didn't work properly and it wouldn't start reliably. After a local rep attempted repairs the manufacturer told me to obtain a refund from Amazon and they would take the bad unit.
Amazon refunded every cent, sight unseen with one phone call, and placed no obligation on me to return the original unit; "dispose of it as you wish." Shortly after, the manufacturer said they were shipping me a replacement. Despite being told about the full refund the manufacturer didn't care and freighted me the replacement.
Perhaps I wasn't clear. The bad one went to the manufacturer and they replaced it. Amazon just refunded the purchase. I'm left with 1.0 working generators I didn't pay for.
Maybe it's all down to being Prime for I don't know how long. Amazon just said "here's your money, kthxbye."
Ah, that makes sense. I would bet Amazon was aware that the manufacturer would ask for it back if that’s the case. Presumably also the manufacturer footed the bill.
What's the point of this? How is Amazon going to make Amazon level impact/money here? It's just another online portal to buy a car. Feels like some VP had a pet project and ran with it.
I bet the dealers still get to upsell you on body undercoating or whatever before the sale is finalized. Is amazon going to handle loan approval? Or do they think that people will just up their Amazon Prime chase card limits to 40K and pay for it the same as box of paper clips?
Can it actually be used to buy a car, unlike dealer sites, which lie about inventory and are a heavy handed laborious way of just getting put on a waitlist and getting a salesman to call you?
That'd be a pretty direct improvement in the modern car market.
I don’t know what would change if the dealer is still involved - why wouldn’t they lie to Amazon? “Oops sorry we sold it before you got here, what about this model?”
Amazon is generally very pro-customer and low seller nonsense.
(Say what you want about Amazon's reputation towards sellers,) but they generally swiftly handle stereotypical seller BS when it comes from sellers for other kinds of items.
Not in my experience - reposting a comment here I made in the past:
"Be extremely careful and document everything - this happened to me with Amazon when I ordered a high end graphics card, and got an empty box. They said to send it back, but when they got it, forgot all about the part where I said the item was missing and claimed I didn’t complete the return.
Then they claimed to my credit card company I never requested a return.
Then they told the state AG that they had accepted my return when I filed a complaint (perjury!)
In the end, I lost 2500$ USD."
But as per Amazon fans it is very pro-customer. Everyone knows Amazon is data driven organization which does not make decisions based on intuition. So they do know customers like at least 75 pages of search results for a trivial kitchen gadget.
I've said before and will say again: I'll vote for any politician that kills the car dealership model in the US and lets me buy directly from the manufacturer.
How is this better than the Costco auto program, which has multiple participating brands?
Unlike Amazon and the dealers on the platform, Costco is a brand I trust to do right by me and go to bat for me if participating dealers try to play games.
Not everyone has a Costco membership or a Costco near them. There also doesn't seem to be any indication that there is a pre-arranged pricing arrangement for Amazon like Costco.
Amazon is simply letting Hyundai dealerships list car inventory on Amazon, Amazon isn't selling the cars.
Well people are fine paying 10 dollars on Amazon for a disposable widget which could be 5 dollar in physical store because convenience If customer is also ready to pay a couple of thousand extra for a car. I think dealer/amazon/customer will all be happy.
There are many products I brought from Amazon which are cheaper or better in store when I looked or bought another from store. E.g. exercise ball, plastic step stool, stationery, office supplies etc.
This seems like driveway.com
Kind of a cool concept, but falls apart when dealers get greedy and are involved. I "bought" a car on driveway.com, and then a few hours later I got an email and was told that the dealer already sold in "at the dealership". So basically they just list things there and if they can get a better price in house, they just cancel sales
This is a first step before Amazon secures dealership licenses in 48 states and puts brick and mortar operations out of business in yet another vertical.
I mean, it could be an ugly, convoluted solution to a problem. Car sales seems fairly broken these days - horror stories abound, not just about dealer markups in general, but time-wasting nonsense like dealers allowing folks to factory-order a car at an agreed-upon price and then changing their mind - demanding a markup at delivery time, or selling the ordered car to someone else who is willing to pay more.
Automakers have been trying to coerce dealers to cut it out with the markups, threatening to allocate fewer vehicles to dealers who play games, but at the end of the day if enough dealerships refuse to comply, automakers are going to do what they have to do to keep moving metal.
Idealists have been clamoring for changing dealership franchise laws en masse and allowing automakers to sell directly, but that seems unlikely in the near term.
So if Amazon becomes a mega-dealer and forms a tight bond with one or more automakers, essentially guaranteeing good behavior (up-front pricing, no deceptive fees, etc), then the automakers can tell the PITA legacy dealerships to take a walk, sell the cars online in a high-quality, nicely branded portal with consistent pricing, and everyone is happy (except for the legacy dealerships).
From the article, it seems that it's going to be the dealers who list the cars on Amazon.
This means all the hassles associated with going to dealerships, plus Amazon gets a cut and tells dealers how much to mark up cars for optimizing whatever they want to aim for.
Peak Amazon was likely when their retail catalog was reliable, before Azure matured, and before streaming content licenses got expensive and started fracturing.
They’re still squeezing out growth in total financial position but every move has looked really slippery and scattered for a while now.
Mostly the same for Alphabet, Meta, and others in that generation.
The current dealership model creates and tolerates incentives for dealers to rip me off at sale time. It also injects a set of complexity into the model, where if I choose to buy a car of brand X, I then have to comparison shop for the exact same car at multiple dealerships.
I've bought two Teslas, and the nice thing about the process is that it doesn't matter where I pick up the car, I get the same price, and the exact same experience. Tesla also won't try to rip me off on buy-ups like tire protection and seat protection. (Then again, Tesla really needs price protection because they significantly dropped the price of the Model Y shortly after I bought it.)
One of the most annoying situations was a Subaru dealer that made me sit through a pitch for various upsells (that were rip offs) and then sign a form that I listened to them.
I really hope the Amazon car purchases explicitly prohibit upsells and other nonsense. Just bring me the car, give me the keys, and stay long enough to make sure that the car works. No BS upsells.